It’s important to be in the right kind of environment, and around the right kind of people. You want to be around people who have a good feel for the future, will entertain improbable plans, are optimistic, are smart in a creative way, and have a very high idea flux. These sorts of people tend to think without the constraints most people have, not have a lot of filters, and not care too much what other people think.
The best ideas are fragile; most people don’t even start talking about them at all because they sound silly. Perhaps most of all, you want to be around people who don’t make you feel stupid for mentioning a bad idea, and who certainly never feel stupid for doing so themselves.
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I worry that many will take away the wrong lesson, i.e. that every idea has potential, no idea is stupid. Many companies are trying to inculcate this into their cultures thinking they can replicate SV's success by being more open. I think most will quickly find this to be an untenable way to live, because it's only half the picture.
I think the real take-away is more nuanced. Open unconstrained environments tend to produce the very best ideas (not just good ideas), and it's important not to kill new ideas too early. That said, all those ideas eventually need to be tested against the crucible of reality. Generate lots of ideas, but be ready to ruthlessly edit and kill those that don't work in reality. As pg said, innovation is two-step process -- and those 2 steps (generate, then edit) are discrete, not to be mixed. High infant mortality during ideation means good ideas get killed. But loose or no filtering at all means you're throwing good money after bad.
My improv teacher tells me that to produce great work, we have to work out of abundance (lots of ideas), and also work out of failure (fail a lot). Abundance in itself is not enough, nor is failure on its own.
Social networks were not in the "how original" category in 2005. Facebook was started in 2004 and was still restricted to college students when Loopt launched. Loopt was quite different (mainly about location rather than friend graph.) It was an idea worth trying.
