Little Bets - How Breakthrough Ideas Emerge from Small Discoveries

Little Bets - How Breakthrough Ideas Emerge from Small Discoveries

by Peter Sims

my Take

In my opinion this is a must read for stock market participants and / or entrepreneurs. This book also stresses upon  the fact that failures are inevitable and it is best if we learn from them. It also implies that we need to live with uncertainty.

Takeaways from the book

The routines of Chris Rock (one of the most popular comedian in the world) used in his world tours are outputs of his learning from thousands of small bets. These small bets are played out at a small comedy club near his house and most of them fail. As he performs these acts, he observes the crowd reaction and based on their reactions he develops his routine.

When Google was started , the aim was not grand and large as we see today. The founders were collaborators in Stanford digital library project, were trying to solve a very much smaller problem: how to prioritize library searches on-line.

Thomas Edison said "If I find ten thousand ways something won't work, I haven't failed. I am not discouraged, because every wrong attempt discarded is just one more step forward".

Little bets is based on the proposition that we can use a lot of little bets and certain creative methods to identify possibilities and build up to greater outcomes. We have discover, test and develop in a iterative manner.

Fundamental to this approach is that we need to:

• Experiment: Learn by doing. Fail quickly to learn fast. Prototype.
• Play: Have an atmosphere where creative ideas are not snuffed out or  prematurely judged.
• Immerse: Take time to get out into the world to gather fresh ideas and insights
• Define: Use insights gathered throughout the process to define specific problems and needs before solving them
• Reorient: Be flexible in pursuit of larger goals and make use of wins to pivot and chart the course to completion
• Iterate: Repeat, refine and test frequently

Big bets vs Small bets

Small bets enables us to focus on what we can afford to lose than make assumptions on how much we can expect to gain.

Failures are inevitable and instrumentals in the process of achieving goals. 

The Growth Mind-set

Michael Jordan did not start out as one of the greatest players in basketball. He exerted enormous effort to reach that level, and after attaining that level he worked even harder.In the first four NBA seasons Jordan's three-point range shooting was 18% and when he ended his 13 year career, the average was 33%.

Failing quickly to learn fast

In a world that prizes answers and solutions, protyping can be somewhat counterintuitive, placing the emphasis on doing to be able to think rather than thinking in order to do so. Discovery doesn't happen in a vaccum, which is why doing things, however imperfectly at first, opens us up creatively.

The Genius of Play

Creating an atmosphere that allows for playfulness and improvisation is one of the most effective ways to inspire the experimentation that leads to the best ideas and insights.

Problems are the new solutions

Creative people use constraints to limit their focus and isolate a set of problems that need to be solved

Questions are the new answers

One of the best ways to identify creative insights and develop ideas is to throw out the theory and experience things first-hand. We can't even know what questions to ask until we reach beyond what is already known through a true process of discovery: carefully exploring, observing, and listening to uncover what is hidden from the naked eye from the bottum up. In doing so, we must go deep, we must go wide, and we must stay focussed.

Learning a little from a lot

Innovators routinely networked with people who came from different backgrounds. It's a way to challenge one's assumptions and gain broader insight.

The Medici Effect, builds on major pillars of pscyhology research to demonstrate how diverse teams are more likely to be innovative.

Learning a lot from a little

Seeking out a small group of these active users with little bets is an astute way to tap into unique insights and desires.

The Roger S Curve

Diffusion is defined as the communication process by which a new idea or new product is accepted by the market, while the rate of diffusion is defined as the speed that the new idea spreads from one consumer to the next. Adoption, similar to diffusion, also deals with the psychological decision making processes of the individual, rather than those of an aggregate market.

Rogers showed that a diffusion process in a social system follows an S-Curve in which the adoption of a technology begins with slow change, is followed by rapid change and ends in slow change as the product matures or new technologies emerge

The people we essential want to learn and interact are the early adopters and the lead users

Small Wins

Small wins can either confirm that we're heading in the right direction or they can act as pivotpoints, telling us to change course.

Pixar was essentially a hardware company. The team executed some small animations and convinced the skeptical Steve Jobs through their small wins. Then Pixar transformed the animation / movie business.