Small bets vs. Alex Hormozi

I’m currently reading $100M Offers by Alex Hormozi. It’s been a while since I’ve read a book that got me so excited and humming with ideas that literally kept me up way too late several nights in a row.

Then yesterday I joined the Small Bets community.

With both of these actively on my mind, I realized they actually oppose each other in their approaches to growing a business:

• Alex adamantly suggests that if you aren’t making at least $1MM a year in any one of your businesses, you need to pick one, and drop the others. Full stop. His opinion is that you can’t grow the way you need to without singular focus, at least on your first portfolio business.

• Small bets on the other hand, proposes that you put your eggs in lots of baskets - ideally the baskets that you predetermine are most likely to succeed.

There are a number of reasons why one approach isn’t right for everyone. and I don’t think a maker should look too deeply into this.

The first big differentiator is that Alex only wants to go big. Many makers just want to crack $5k MRR to cover their minimalist lifestyle. Then there’s Peter Thiel, who in Zero to One shows that he is really only interested in ideas that will literally change the world. If there’s any competition, he wants nothing to do with it, because it’s not ground-breaking enough.

We’ve all got different goals and ambitions, and we’re all coming from different places.

For many people, the small bets approach seems to be a middle-ground to satisfy their shiny-object syndrome. While I’d argue that this justification is a valid angle, it is also dangerous in that it can be an excuse to keep bouncing around. The small bets approach is most likely to be successful if done intentionally, as Jason Leow and I touch on in this Twitter thread.

For others, diversification through small bets is a form of security. As Tony Dinh mentions in today’s newsletter, he is nervous about his highest-income-generating product, Black Magic, being dependent on Twitter. Twitter could decide to make changes to the API that could negatively affect him, or Elon could destroy Twitter, or people could just decide to move away from in in favor of something else. There are a number of factors outside of his control.

Let’s remember that there’s no one-size-fits-all approach here. Just because you see someone succeeding with one approach doesn’t make it a good fit for you. Do what feels right to you, do it with intention, and drive forward with confidence. You got this.