Five Weak Reasons Is Not Good
Joe Lonsdale: This is from Peter Thiel's 'nine lessons.' Usually there's one reason that dominates everything else. That's the nature of the world — it's the power law. In venture capital, one thing in a fund tends to be bigger than everything else. It's true inside companies too.
So if you think you have two or three or five reasons for doing something — what that means is you haven't figured out the actual reason. You have five weak reasons, which is not good. You want to find the one really strong thing you're driving towards. That's how startups work.
Five reasons for doing something means you haven't found the one reason. Five weak reasons is not good.
Revenue Streams, Growth Strategies, Decisions
Lonsdale: Eight revenue streams means you probably don't have one awesome revenue stream. Seven growth strategies means you haven't figured out which one's actually going to compound like crazy. It may change over time, but what's the one thing that's working now that you're pushing on?
This is a seductive trick — people try to do ten companies in an incubator because they don't want to bet on one. Same thing happens inside a company. No — figure out the way you're going to make money.
Eight revenue streams means you don't have one awesome one. Seven growth strategies means you haven't found the one.
Reed Hoffman's China Trip Rule
Lonsdale: Reed Hoffman uses the same philosophy. His chief of staff came with a list of pros and cons for a trip to China. Multiple pros, a couple cons. Reed said — that's a guaranteed way to make mediocre decisions. If we don't have one reason that alone is worth doing, then we should just say no.
If there isn't one reason that alone is worth the trip — say no. Blended pros and cons guarantee mediocrity.