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Why Diversification Results In Mediocrity
The secret is that taking risks provides optionality as well, via learning and differentiation. If you go to an ivy league school or elite consulting firm, however, you're merely one of many. Even something as prestigious as a Harvard degree makes you only one of 315,000. If you start a company, you can truly become one of a kind—you'll be one of a... See more
Erik Torenberg • Reconsidering Career Optionality
A second flaw we regularly observe is all-or-nothing behavior among large companies, in striking contrast to the VC principle of diversification with many small bets.
Ilya Strebulaev • The Venture Mindset: How to Make Smarter Bets and Achieve Extraordinary Growth
Index investors will minimize regrets differently than stock-pickers, focusing most on curbing unnecessary activity and expanding their knowledge base. They tend not to dwell too much on intrinsic value, although I think they would have fewer regrets if they did. Fiduciary misconduct and financial failure are, for them, bolts from the blue. In cont
... See moreJoel Tillinghast • Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing (Columbia Business School Publishing)
Larry Ansin, former CEO of the highly successful Joan Fabrics Corporation of Lowell, Massachusetts, told us about his decision to focus: If you’re diversified into five businesses,26 as we once were, the businesses that only make up 3% of your sales are going to take 20% of your time, energy, and attention. It’s just not worth it. Focus. Do what yo
... See moreJim Collins • Beyond Entrepreneurship 2.0
If you focus on diversification instead of single-minded pursuit of the very few companies that can become overwhelmingly valuable, you’ll miss those rare companies in the first place.