I often come across early stage ventures that are pursuing three or four different alternative products or strategies. When I inquire how they plan to win at several of these simultaneously, I get the same answers. We are pursuing multiple paths because we are not sure which one will be the winner. Or, Our investors are happy to have a portfolio of opportunities to reduce their risk. This causes me pause. On one hand, certainly in this early stage they are right, its difficult to pick a winner before their products are complete or the market has had a chance to vote. But, can they really afford to be pursuing multiple strategies?
Making tough decisions is always a difficult proposition. But not making them sets you up for much more certain failure. The word decide is made up of the Latin roots de- "off" + cædere "to cut"as in cut off other alternatives.
What entrepreneurs and investors who allow the pursuit of multiple alternatives do not understand is that without cutting off several of their multiple alternatives they are giving management permission to fail. That's right permission to FAIL!
Human nature is such that if you have a "fall back" position, an alternative if your pursuit fails, then you tend not to take success to its limits. Somewhere in the back of the homo sapiens' mind, we keep the glimmer of a trap door alternative to failure. Contrast that with the very powerful survival instinct that each of us carries. In the face of utter failure, we are able to call upon super-human capabilities to make the impossible occur.
If you study enough start-up ventures that had everything to lose by failing, you find a long list of very successful entrepreneurs who accomplished the impossible. Again, contrast that with many corporate ventures where the person leading the charge had a cushy job to fall back upon if their intrapreneurial venture failed. Is it any surprise that entrepreneurs create many more important ventures than corporations who have many times their resources are able to create from within these large entities with gracious safety nets?
Entrepreneurs who are pursuing multiple paths take note. Cut off your alternatives and your chance of success will increase! And investors who advise their early stage management teams to retain a portfolio of opportunities should instead capture their portfolio safety from multiple investments rather than diluting the focus of any individual management team!