I've written before about making small bets, but I want to dive into that a little more today.
Many of my business ideas so far have been really big.
They've been things that I could easily picture scaling to my ultimate goal of total passive income without changing or pivoting at all. I thought it made sense to avoid starting things that wouldn't get me to where I wanted to go.
Well, I've been thinking about that a lot lately, and I'm coming to the conclusion that this approach is very naive. A more sophisticated approach is to start small (or perhaps a better word is certain), and scale up once I have something working.
The subject of this post was inspired by a post from Pat Walls of StarterStory.com titled "Your business idea is embarrassing, and that's a good thing."
In the article, he writes about why small business ideas are great by pointing out how many of the businesses that are big today started out as very small ideas, executed well, that achieved initial traction and then scaled from there.
Everything grows from a simple idea.
Something else I'm reading right now is Rework, on Daniel Vassallo's advice. It contains a couple of different sections (the book is uniquely organized into unrelated, concisely stated insights rather than long chapters) that are very relevant.
The first section is this:
Learning from mistakes is overrated.
What do you really learn from mistakes? You might learn what not to do again, but how valuable is that? You still don't know what you should do next.
If failure isn't valuable, then failing at something really big is much more expensive than I've been thinking. At least if you fail at something small, you haven't lost a big investment.
I've always justified these bigger ideas by saying that even if I don't succeed, at least I'll learn a lot from my failure that will inform my next idea.
This justification is backed up by the classic Silicon Valley startup-mentality quote "Fail fast", at least in my mind. An alternate interpretation of this quote might be "ship early and ship often, even at risk of failure," but it's not my primary reading.
My mindset here was first challenged by a chance encounter with a software salesman from out West who'd moved back to Boston to launch a startup in the construction and renovation space. He was interviewing me for a CTO role, and when I suggested "fail fast" as a good modus operandi, he got ticked and shot it down angrily.
"'Fail, fail, fail,' is wrong! It's 'win, win, win big'!"
I didn't have enough context to understand it at the time, but he was right.
The other quote from Rework is this:
Planning is guessing.
Unless you're a fortune-teller, long-term business planning is a fantasy. There are just too many factors that are out of your hands.
Writing a plan makes you feel in control of things you can't actually control.
Plans are inconsistent with improvisation.
Working without a plan may seem scary. But blindly following a plan that has no relationship with reality is even scarier.
What does this idea that planning is bad have to do with "start small"?
Every big idea I've had has been backed up by a big plan to scale to exactly where I want to go. But I know so little about each idea here in the present that it's really all just guesswork based on a little research.
If I accept that I can't "plan" my way to massive success, that leaves me free for improvisation – in other words, for dealing with reality as it comes.
It also means I must necessarily start small.
With all that said, it doesn't mean that I should start with ideas that must always remain small. It wouldn't make sense for me to try to build out fully passive income from a business that won't scale (running a small cafe, for example).
It just means that I shouldn't try to build something too big from the very beginning, because those plans probably don't have much in common with reality, I'll get nothing from them if I fail, and even more, failure is very expensive.
That final thought reminds me of a relevant tweet from Daniel Vassallo (who's been really on point lately!):
I think the only other caveat to this entire thread of thought is that while it's important to start small, it's also important to move on from a business if at any point you discover it's not going to lead you to where you want to be.
Starting small comes with the disadvantage that it's tempting to stay small. If that's still enough for you to achieve your dreams, great! But don't get trapped in a neverending sidequest while the main quest goes untouched.