All or nothing is not a good strategy. It ignores probability.
You’ve heard the story about burning your boats, right? Legend has it that in 1519, after the Spanish conquistador Hernán Cortés arrived in the New World with 600 men, he ordered them to burn their ships. There was to be no turning back. They were totally committed to his perilous plan to plunder the riches of the Aztec empire.
Here’s the thing: Hernán was like the Google or Apple of today, with incredible resources at his disposal. And us? Well, we are not Hernán.
We are the people faced with a global health pandemic, with many of us suffering job losses, income insecurity and total economic uncertainty. Those who burned their boats before Covid would be in a very difficult situation. Governments around the world are also having to revert to Plan B or C or even D, as new information on the pandemic arrives.
I’ve undertaken many startups—more than 10. I’ve also been involved with many side projects. Most of them failed financially. Most of all new ventures do – it’s foolish to think you’d be any different. Out of the 10 startups, I’ve had two in which I had an exit and succeeded in selling the business. But I never burned my boats. I always had a boat hidden away under the bushes, near the shore for a quick and painless escape. Once I even joined another army (losing the financial battle in a particular startup, I went back to earning money in a corporate role). I always made sure I had some form of investment to fall back on – a mix of cash, shares and property. I continued to make passive investments even while I was bootstrapping my startups. It was for this reason alone that I could keep on rolling the dice, building another startup, another project and trying again. I’ve got friends and colleagues who went all in, lost, and now they have very little to fall back on. If COVID has taught us anything, Plan Bs are a damn good idea.
Sure, we all approach things in different ways, but for me, risky projects are an infinite game I want to keep playing, so I never burn my boats. Advice to go all in may come from people whose incentives differ to yours or who’ve been one of the fortunate few who succeeded and possibly succumbed to survivorship bias. The overwhelming odds for success in most startups, business ventures and technology projects are very low indeed. But we are so often enthralled by the stories about the rare winners to go all in pursuing success, but it’s a crap shoot not worth taking.
Here’s a better approach. Do what nature does. Be abundant, sow lots of seeds and know that most won’t ever germinate. Treat your new ventures like seeds – see what blossoms and nurture that.
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Keep Thinking,
Steve.