Want to be a big fish? 6 reasons why you should look for a SMALL pond.
Growth (Oxford Dictionary): the process of growing physically, mentally or emotionally.
Growth is (and should be) a key word in the vocabulary of the entrepreneur. A business that is growing is attractive to investors, brand directors and anyone who is enquiring about your business, forget ‘greed is good, GROWTH IS GOOD.
However, growth also attracts additional pressure coupled with increasingly high expectations and increased attention from the competition. Like everything in life, everything has it’s consequences…….
When I talk to start-ups about their aspirations, they (rightly so) talk about their growth plans, especially the path they plan to take to a huge exit/IPO. However, there are many ways to grow, some potentially sustainable and some not so sustainable. In my opinion, the plan that you decide to follow comes down to one key question – what size of pond (market) do you first want to swim in?
Basically, do you want to initially be a ‘big fish in a small pond (small market)’ or a ‘small fish in a big pond (big market)?’. A lot of start-ups want the latter, they want to jump straight in, they want to play in many ponds (usually big) and want to become THE ‘Big fish’ in the ‘biggest pond’ asap. Ambitious? Very. Realistic? Probably not.
At this point in a conversation, I recommend that the start-up should initially look to be a ‘big fish in a small pond’, forget about the big ponds for now. This doesn’t always go down well, but please find below ‘6’ reasons why a small pond is a good place to start:
Swimming in a small pond (market) allows you to:
- Crystal clear focus: In a small pond, you can be very clear who you’re target audience is and what problem you are trying to solve for them, especially if you are the first fish to offer such a service. In a big pond, most of the rules have already been set – you are just another fish (and a small one at that)
- Better decision-making: With this crystal clear focus, as further opportunities come your way, you will know immediately whether they are right for you or not. Yes, it is difficult to turn down work, but being focused from the start will enable you to make better decisions for the longer term success of your business
- Better spending: With more focus, you will spend your money wiser – your investments are more focused and will go deeper vs spending the same amount of money spread thinly over many projects (ponds) and potentially making no inroads at all?
- Faster expertise: You will gain ‘market leadership’ and become an expert in your market faster, people will come to you for your services, you are a big fish remember?
- More flexibility: You will be able to learn and pivot to greater effect, you can make more mistakes in a smaller pond without (hopefully) disastrous results. The competition is not so fierce (vs a big pond), so you will have more wriggle room (excuse the fish pun)
- Stronger springboard to another pond: Reference the original definition, through the ‘small pond first’ approach you will hopefully grow not only as a business, but also mentally and emotionally and subsequently, be in a much stronger position to chose the next pond (hopefully a bigger one) to jump to?
To be clear, I am not saying that start-ups shouldn’t think big and look to be a big player in a huge market, but I do believe there is a lot to be said for approaching this goal in a more pragmatic way. There was an old saying in my last company (ABInBev); you don’t want to end up being a ‘busy fool’. This is someone who is always frantically busy doing loads of things in loads of areas, but never really cutting through and making a difference. On reflection, maybe such people had chosen either too many ponds to swim in or they were ‘treading water’ and out of their depth in a big pond?