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Parallel Startups - Should You Put All of Your Eggs In One Basket?
By Rob | October 21, 2007
Startups fail at an alarmingly high rate. Not just tech startups, but new businesses of all kinds. The logical response to any risky strategy is to balance the risk through diversification… but does that apply to startups too? If your business is likely to fail, should you have 3 “small project” style businesses going on at a time in hopes that one of them will take off and succeed?
I think there is something to that. Incubating ideas can stimulate creativity and help minimize the risk associated with just doing one thing. But there is another side to the story. Not putting your “all” into an idea can be risky too. If a startup only has a 30% chance of survival even if it is the major focus of your life, how much does that decrease if it becomes a minor focus?
It’s easy to leave the cause when things get tough in a startup. That’s why Cortes burned the boats his team used to reach Yucatan. He didn’t want deserters, so he sent a message that there was only one path. By limiting yourself to one startup, and burning your own boats, you force yourself to pour everything you have into it. Of course, you also force yourself to make short term survival decisions instead of long-term decisions that lay a solid foundation.
In the end, I think it boils down to this - if you aren’t willing to put your eggs in one basket, you probably don’t like those eggs enough, which means you probably should look for something else.
Topics: Strategy |
