December 12, 2017
Posted by: Monica Selby
You know what’s really sexy?
Big user numbers. Big engagement numbers. Big markets. Big press stories.
In theory, if you line these all up, you’ll soon be looking at big profits. And, we all know that when it comes to profits, size definitely matters.
The problem is that going big or going home is terrible advice. Here’s why:
Size is Relative
What is “big” exactly? It’s a relative term that relies on comparison.
Should you shoot to be the biggest company in the city? Your state?
Are you only successful if you’re the market leader?
Do you need to be the biggest company in the world??
The truth is that small and medium-sized companies are successful every day. They make a lot of money, provide employment, and make their founders wealthy, even if you never hear about them on Twitter.
Jason Lemkin recently advised founders to shoot for an order of magnitude bigger. Success is really about the math, and for the majority of entrepreneurs going big isn’t necessary to make the numbers add up.
Motivation (And Personality) Matter
Newsflash: entrepreneurship is hard enough. Building something from nothing is hard, no matter what your goal is.
Trying to be the next Facebook/Google/Uber, etc? That’s a level of sacrifice most founders just aren’t made to handle.
A lot of articles would now chastise you and make you feel like you’ll never be worthy or “part of it” if you aren’t cut out to be the CEO of a $20 billion company.
But, imagine a world in which we’re all Mark Zuckerberg or Travis Kalanick.
The truth is we all have different personalities, motivations, and responsibilities. And that’s okay! As the saying goes, “It takes all kinds of people to make the world go ‘round.” The same applies to business and entrepreneurship. It takes all kinds of companies to create a full economic ecosystem.
“Know thyself” is indispensable wisdom. When you understand your own true personality, motivations, and desires, it’s a lot easier to know what kind of business you should build--and it’s totally acceptable if it’s not change-the-world big.
Heroes Are Outliers
Along those lines, it’s imperative to remember that those mega companies we all admire are outliers.
Depending on who you ask, something like 75-99% of startups fail. Of the small percentage that “succeed,” almost all of them are acquired.
2013 saw the largest tech IPO class since 2000 with 188 companies going public. That’s 188 out of the thousands of companies started each year. And let’s be honest, the only one we really remember is Twitter.
On the flip side, there are thousands of entrepreneurs making great money pursuing their own ideas, even though they’ll never be featured on TechCrunch or close a $1.2 billion financing round.
What I’m Not Saying
I’m a big fan of innovative, change the world ideas. I fully believe we haven’t reached the edge of our ability to create new technology that will improve or enhance lives (and, yes, make money). So, if you have that kind of idea and drive, absolutely go big.
If you don’t, though, it’s time to stop drinking the go big Kool-Aid.