The Five-Reason Trap
Joe Lonsdale learned this from Peter Thiel and it changed how he makes every decision. If you need five reasons to do something, you have no real reason at all.
Five weak reasons feel like a strong case. They're not. They're a cover story for the fact that you haven't found the one reason that matters.
Five reasons means you have five weak reasons. You want one really strong thing.
Power Laws Run Everything
In venture capital, one investment returns more than the rest combined. Inside companies, one product line crushes the others. One growth channel dominates.
This is the power law. And it applies everywhere. Two equal revenue streams don't exist. Two equal growth strategies don't exist. One thing always wins.
When something's successful, one reason dominates everything else. That's the nature of the world.
Eight Revenue Streams Means You Have None
Lonsdale sees founders pitch eight revenue streams. Seven growth strategies. Five monetization plans. He knows what this means. They haven't found the one that works.
Find the channel that compounds. The revenue stream that scales. Push on that one thing until it breaks or makes you rich.
Eight revenue streams means you probably don't have one awesome revenue stream.
The Reid Hoffman Test
Reid Hoffman uses the same philosophy. His chief of staff once brought a long list of pros and cons for a China trip. Multiple pros. A few cons. Hoffman rejected it.
His rule: if no single reason alone justifies the decision, say no. Long blended lists are a guaranteed path to mediocre choices.
If we don't have one reason that alone is worth doing, then we should just say no.