Hi there, thanks for the feedback. I don't claim I'm right, this is just how I view opportunities. i DO think of every opportunity as a distribution of payouts with varying probabilities. Before going into the venture (and even after it... only once measurement), you can't actually _know_ what that probability distribution looks like.
That said, I don't really believe small is _safer_ -- I'm just saying small costs less and generally has smaller upsides and smaller return variance.
If you read to the end, you'll notice that I don't actually make a value judgement on which path is "safer" or "better" in any way. I think it's just a question of personal preference, influenced by your individual station in life.
I think this has more to do with outcome utility. I personally will probably never spend more than 1mm a year, so building a startup that has a significant tail above 1mm/year in recurring revenue would be great -- but the utility of that tail is very low to me, so its not worth sacrificing success probability.
And yep, just totally guessing what that return distribution looks like.
For me it's not that small is safer, its that there are a lot more resources to fall back on for small. I personally don't have the chops to build twitter scalability. But if I wanted to open a restaurant, there are tons of resources and many people have blazed that path for me, and I can look to them for advice. It's not "easier" it's just that the path to "success" is more well documented, and I consider that a valuable tool that increases the odds of "success".
I definitely agree that entering an established market with a product that is just going to take a bite out of it is easier due to the prescribed path.
And like i said, maybe it makes you some cash and allows you to build more stuff on top.
I'm coming from some experience in that I've built some small businesses that just didn't make enough and didn't have enough potential to be worth the stress.
That said, I don't really believe small is _safer_ -- I'm just saying small costs less and generally has smaller upsides and smaller return variance.
If you read to the end, you'll notice that I don't actually make a value judgement on which path is "safer" or "better" in any way. I think it's just a question of personal preference, influenced by your individual station in life.
I think this has more to do with outcome utility. I personally will probably never spend more than 1mm a year, so building a startup that has a significant tail above 1mm/year in recurring revenue would be great -- but the utility of that tail is very low to me, so its not worth sacrificing success probability.
And yep, just totally guessing what that return distribution looks like.
For me it's not that small is safer, its that there are a lot more resources to fall back on for small. I personally don't have the chops to build twitter scalability. But if I wanted to open a restaurant, there are tons of resources and many people have blazed that path for me, and I can look to them for advice. It's not "easier" it's just that the path to "success" is more well documented, and I consider that a valuable tool that increases the odds of "success".