

Don’t Bet Big. Little Bets Are The Ones That Turn Into Billion-Dollar Ideas - edw519
http://techcrunch.com/2011/03/19/little-bets/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&utm_content=My+Yahoo

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Eliezer
The title could not possibly be more wrong. I don't usually presume to speak
for Peter Thiel, but pretty damned sure this is his viewpoint as well. Not
just Silicon Valley but _human civilization_ needs more people building real
companies that generate large amounts of new economic value and push the
borders of what we do with technology, because five-dollar iPhone apps and ad-
supported blogs are not going to sustain human progress or the growth of the
world economy.

There's something to be said for betting on many different people, but
_someone_ has to be willing to bet large amounts on the ones who get early
traction; and if you want a billion dollars you should be making those bets on
many people with big ideas, not little ones.

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hansy
I think the point of the article was that smaller innovations can eventually
lead to the greater pushes "that generate large amounts of new economic value"

Coming up with those "big ideas" is an extremely tough thing to do. Often,
people who get so enamored with the grand scheme of things engage in endless
strategy with no prototype and nothing to show the world.

I will agree with you that one should not write off the bigger picture, but
sometimes in order to get to the bigger picture you need to put the little
pieces in place first

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Jsarokin
I think just because it is an "extremely tough thing to do" doesn't mean that
people shouldn't do it. Sure, people who aren't capable of coming up with a
brilliant idea shouldn't do it, but those that are exceptional are better off
thinking about the next big idea than a small one.

I think its more of a blanket statement to save those who aren't "exceptional"
but are just good-very good. If you're good-very good, then yeah stick to the
smaller ideas instead of daydreaming about creating the next Microsoft, Apple,
Google. Its tough to say, but some people are just better than others. Some
people are great. The few that are "great", for the most part, are the ones
who will create the next huge thing.

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pbrumm
Were microsoft, apple, google thinking they had discovered the next ibm, or
yahoo when they were working on their idea?

Or were they just working their idea as best they could? creating a revenue
stream as quickly as possible and not worrying about trying to be bigger than
the previous biggest.

I don't think any of the recent companies, google, twitter, facebook, thought
that they had an idea that could create companies bigger than any previous
ones. they were nothing but an idea that had potential and something people
could understand and use in fun/new/helpful ways. And a team who could deliver
that idea.

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jbarciauskas
Obviously this is a post begging for counter-examples, but I'll refer to Joel
Spolsky's strategy letter "Ben and Jerry's versus Amazon" for a better
articulation of how there are many roads to a billion dollars:
<http://www.joelonsoftware.com/articles/fog0000000056.html> Some markets just
lend themselves to land-grabs.

~~~
nickpinkston
People love absolutes - usually...

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csel
I think the article hit the nail on an important element - Vision.

Yes, Larry and Sergey created something simple. But they had a vision what
they want to do with it and the potential of what they were working on. Same
thing with Zuckerberg. Yes, he created a simple networking site for Harvard
and but he also had a vision. Most of them were recorded in his diary, i.e
photo sharing etc.

If you create a small product without a vision, it will remain a small product
and may not go anywhere. But a small product with a great vision have the
potential to take you to the next level. Now a huge clunky product with an
enormous vision? That is a recipe for disappointment.

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newchimedes
While vision is important I do agree with the article how sometimes you
discover the vision by doing small things. Facebook I don't believe was any
more visionary when they first started. It first started as a knockoff of
hotornot (if memory serves me correct). But by doing that project he realized
and got on to the path that would lead to Facebook.

As much as I would like to wake up one day with THE billion dollar idea... I
don't think that's how it happens. I think for most people it's about doing
things and adjusting as you get more data to figure out what direction to go.
But if you don't start and worry instead about chasing after the huge problem
to solve...you might just end up waiting too long and passing on
opportunities.

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jdp23
"Larry Page and Sergey Brin didn’t begin with an ingenious idea."

Oh please. They began with an ingnenious idea and then had more ingenious
ideas.

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codeslush
I was kind of surprised the Groupon story wasn't mentioned in this article.

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dmarinoc
Or Quora ;)

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wazoox
This interesting blog post mentions this too (namely don't invest more than 2%
of your wealth at once):

[http://www.jamesaltucher.com/2010/11/what-do-you-do-after-
yo...](http://www.jamesaltucher.com/2010/11/what-do-you-do-after-you-make-a-
zillion-dollars/)

~~~
billswift
Any number like that 2% is pretty silly. Different people have different
needs, different current resources, and different comfort zones. The only
thing that can really be said about how much to invest is the old rule, "Don't
bet more than you can afford to lose", however much or little that may be.

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cperciva
You misunderstand what the 2% is about. The 2% is about Kelly criterion
optimal bets.

Yes, don't bet more than you can afford to lose -- but don't bet more than 2%
_on a single horse_.

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allantyoung
Buffett may be a huge anomaly but he probably never had close to 50 positions
in his stock portfolio at any one time.

Some of the best investors concentrate.

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cperciva
Buffett can get away with large investments because he picks conservative
stocks. Investing 20% of your portfolio in Coca-Cola Inc. is far less risky
than investing 20% of your portfolio in Google.

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buckwild
Interestingly, as an avid poker player and sports better, I only bet big on
sure things and bet small on the things I think won't pay out.

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fedd
damn, when asked for a vision for my small project, being convinced by their
websites claims that they search for a billion dollar opportunity, i describe
the mass adoption and the world conquering. i'm doomed to stay unfunded :(

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ignifero
Don't do this, don't do that, do this, do the other. I say have fun and cross
your fingers.

