One big bet, or many small ones?
Focus makes companies. Spreading out keeps them alive.
Strategy
Focus
Put everything into one thing.
Saying no to good ideas so one great idea gets all your time and money. Every yes is paid for with something else.
- Right when
- When you’re building something. A small team spread across five ideas does five things badly.
- For example
- A new bakery that sells cakes, pizza, noodles and juice competes with everyone on the street. The one that only makes great cakes becomes the place for cakes.
- Wrong when
- When your one thing depends on a single customer, supplier or trend that can vanish overnight.
Money
Diversification
Never bet it all on one thing.
Don’t put all your eggs in one basket. Spread money across things that don’t fall together, so one bad bet can’t sink you.
- Right when
- When you’re protecting something: savings, a steady business, a supply chain. Spread out, and no single failure takes everything.
- For example
- A supplier sells 80% of its output to one big client. If that client walks, most of the business goes with it. With ten clients, losing one hurts, but the business survives.
- Wrong when
- When spreading out leaves no single bet big enough to matter.
What decides it
Are you trying to build something, or protect it?
Focus is how things get built: all your time and money behind one bet. Diversification is how things survive: no single bet can sink you. Most businesses need focus early and spreading out later.
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