When I was in business school, one of the most common things I would hear people say was that they wanted to do something new—like start a company or take an unconventional career path—but that they needed “a great idea” first. That always surprised me a bit, especially at an entrepreneurial hub like Stanford, since most successful entrepreneurs don’t begin with brilliant ideas—they discover them.
Ironically, this would include the biggest business idea to come out of Stanford in decades. Google didn’t begin as a brilliant vision, but as a project to improve library searches, followed by a series of small discoveries that unlocked a revolutionary business model.
Meanwhile, Pixar started as a hardware company that never found a market, and got into digitally animated movies by making a number of small bets on short films. Twitter began as a side project within Odeo, a podcasting company that was going nowhere. After asking employees for suggestions about what the company should do, Odeo founder Evan Williams gave Jack Dorsey, then an engineer, two weeks to develop a prototype for his short messaging idea. People inside Odeo loved using it and Twitter was soon born.
The truth is, most entrepreneurs launch their companies without an brilliant idea and proceed to discover one, or if they do start with what they think is a superb idea, they quickly discover that it’s flawed and then rapidly adapt.
Of course, everyone wants to make big bets. That’s a Silicon Valley maxim. Go big. Be bold. But brilliant ideas are over-rated and people routinely bet big on ideas that aren’t solving the right problems, including Google Wave and WebVan. Pixar storytellers must make thousands of little bets to develop a movie script, Hewlett Packard cofounder Bill Hewlett found that HP needed to make 100 small bets on products to identify six that could be breakthroughs.
Just as Twitter went from a small bet to a big one, small bets are affordable and achievable ways to learn about problems and opportunities, while big bets are for capitalizing upon them.