“I started a side business,” a friend told me over a glass of wine a few weeks ago. “And it’s sort of crazy: this thing is taking off like a rocket.”
I’ve talked with and been in entrepreneur communities long enough that I’ve seen lots of similar trajectories. Most new businesses fail and of the ones that survive, the majority have a long trajectory to thriving. But a few just burst out of the gate with the entrepreneur holding the reins as best they can.
When you don’t understand why some businesses are break out successes, you ascribe it to luck. But really it’s market demand coupled with a few good decisions (which can be luck or skill or both).
The thing is: no one knows which business will tap into that gold vein of market demand. That’s why venture capital exists and functions like it does.
But knowing that most things don’t work, but a few things work exceptionally well can change how you approach taking risks.
I heard James Altucher talk on a podcast several years ago about a project he was working on. The interviewer asked him how he ended up working on that specific project and he said that he started twenty projects and then watched how people responded to them. Only one generated significant enthusiasm from the market and he killed the others to focus on it.
Not every endeavor has equal chances of success. Not every project will generate the same return. It pays to know when it’s time to focus and when it’s time to try different things.