“Go big or go home!” – Snowboarders everywhere
Snowboarders love to yell that. It inspires a peer pressure provoked confidence that pushes you to more aggressive runs. Runs’s that by the bottom will either seem like a great idea or a horrible one. Runs’s that promise one thing; you won’t be ambivalent.
When I first started learning about startups and entrepreneurship I brought a similar attitude. This is a very common perspective for those new to the space, and it’s easy to be pushed into such an attitude. The VC’s will talk to you about $50 million exits, Techcrunch will be full of multi-million dollar Series A’s, and you will dream of building the next Facebook. These will all pressure you to believe that Big is the only way. The secret is, it doesn’t have to be.
There is a trend in the startup community away from the giant “all-in” tens of millions of funding before a line of code, spending all your time in VC offices startups, to a recognition of more calculated approaches. The reality is that the snowboarders motto isn’t a universal truth in this realm. If your goal to either IPO for $100 million or go bust then your only option is to go Big, but if your goal is to build successful companies and to do well for yourself financially, there are other (Smaller) more strategic roads to that goal.
Now here is the bad news. This is a decision you, as the founder, has to make. There are methodologies you can follow like Rob Walling and Mike Taber’s Micopreneur, or Eric Reis’s Lean startup movement, but you have to make the decision to choose them. There is a misunderstanding that going Big is something that happens after you’ve started Small and been successful. There are cases where this happens, but more often to effectively go Small you must make decisions that will be inconsistent with a product ever becoming Big.
For example, the market your product goes after should be significantly different in a Small strategy. A cornerstone of the Micropreneur approach is to build targeted niche products for relatively small markets. Targetting these smaller markets allows you to solve real problems that probably haven’t been addressed and establish yourself in spaces that will likely not see much entry competition. These markets also don’t have a chance of capturing 500 million users or $1 billion in revenue, but they do have the potential to provide a reliable source of recurring income.
One of the biggest mistakes I made with my first startup was not to make this distinction. Our business plan showed awesome growth to huge revenue numbers, but our operations consisted of two guys in a small office crunching code and cold calling customers. To execute on that business plan we should have been spending (almost) all our time chasing that VC investment that could make it a reality. Our stated vision was inconsistent with the way we were executing on our business.
If you’re thinking of doing a startup this is a question you need to be asking even before choosing a product to build. You need to ask yourself what it is you want from your efforts, what your vision is. The question isn’t whether to Go Big or Go Home, but to Go Big or Go Small.