But I believe that there are two fundamental long-term problems that result from the creation of this "market of ideas":
1. It discourages open and free ideazation, brainstorming and collaboration within a community, which are at the heart of innovation. In his book "Where Good Ideas Come From", Steven Johnson argues that good ideas thrive in environments which encourage openness and collaboration. Introducing a market where half-baked ideas can be monetized stifles such an environment. In the Silicon Valley, people freely and openly discuss their ideas in coffee houses and meetup gatherings. They do so for two reasons: to get feedback which helps them improve their ideas, and to recruit smart people to join them in turning these ideas to reality. You do not get funding because you have a good idea, you get funding because you have assembled a great team and are already executing your ideas and showing tangible results.
2. Many innovations today came out of ideas which seemed stupid at first. Tod Francis, a partner with Shasta Ventures, wrote in recent blog post that one key common trait among many of the innovative companies which have reached valuations over one billion dollar recently, is that their initial ideas were easy to dismiss. In other words, they were ideas which would not have had any chance of winning in "idea" competitions. It is a mistake to send a message to would-be-innovators that the only worthy ideas are the ones that pass through judging "experts" to give them validation.
One of my students recently participated in a regional competition. He was very excited to tell me that an "investor" approached him afterwards. "That's great!" I said. "Did he want to fund your company?". "No", He said. "He wanted to buy my idea. How much should I sell it for"? I guess this investor will soon learn the lesson that the value of an idea is almost zero if it does not come with a great team that is already committed to making it happen!