Time Scales

This post is not about starting and financing small businesses or what some call “lifestyle businesses”. It is about starting and growing venture-funded companies that must never become lifestyle businesses. I’ll ignore the issue of “doing what you love” as you’ll need that in either case.

Your time is “scalable”.

While you can’t be in two places at the same time, you can decide where to focus time and energy. Where you focus your effort can have a large (or small) impact, and so these choices are important. I’m not suggesting wringing your hands over how to structure every moment of your day. I’m sometimes guilty of this sort of obsessive optimization, but it misses the larger opportunity to stop and think about the trajectory of your current and future efforts.

When starting a company, solving a small problem often takes as much time and energy (often more) as solving a big problem. The only difference is your impact. It’s an important realization. Recently, I’ve met a number of entrepreneurs looking for venture financing to solve small problems. With great time and effort, luck, and perfect execution, their impact will still be small.

Having raised capital to solve both big and small problems, I believe that whatever one chooses to work on, it should be a big problem that is inspiring to attempt to solve. Most investors distill this “big idea” principle into the question, “how big is the market for X?”. While this is a fair question, it doesn’t motivate the right answer. Since in many cases a market doesn’t yet exist, the better question is, “what are the implications of X solving this problem?”. Market size and disruption are a big part of the answer, but there are many reasons why choosing a big problem in a big market is better than solving a small problem in a niche market.

1. Impact. Again, your time is scalable. Build things that have a meaningful and positive impact on the greatest number of people. In doing so you will undoubtedly focus on big problems in big markets.

2. Market size. Perhaps most important, targeting a large multi-faceted market allows you to approach the problem from a number of angles and pivot if necessary. While better explained in a different post, it is critical to understand how value is really created in your market (if it is an existing market), the magnitude of that value, and how to disrupt the creation of that value. Also, don’t rely on second-hand data when sizing your market.

3. Motivation. I’ve written about Larry Cheng’s concept of missionary and mercenary leaders, but to attract missionaries, you need inspiring problems that motivate great people to work through intractable challenges. Does the problem remain an inspiration through the emotional highs and lows of building a company?

4. Financial Return. By definition, solving big problems creates more value than solving small ones.

Even if you fail to fully realize the vision of your big idea, it will have been worth trying since the effort and luck needed to build a niche business would have been nearly identical. In other words, given identical time inputs, you have massively different outcomes. In expectation, your impact is greater by attempting to solve the intractable, by attempting big things. Time scales, so make it count.