Focus or small bets. Which do you prefer?

Hi Indie Hackers 👋.

I just listened to Courtland's recent podcast with Evan Britton and thought it was great! Evan explains how deeply focusing on one thing (Famous Birthdays) helped him tremendously when building his business.

It seems like that advice is opposite to the "small bets" idea floating around if I'm understanding it correctly. I've seen other Indie Hackers who I look up to (like @dvassallo) discuss how small bets can help you find a winning idea faster, reduce risk, and build a portfolio of assets.

So which do you prefer? I've been thinking about starting an overall company to house a number of small bet ideas I have, but Evan's great advice has me curious if others have found more success focusing deeply on one idea at a time.

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    Small bets when you're trying to come up with an idea and validate.

    Focus after you've validated the idea and want to take it far.

    1. 1

      That makes sense @stevenkkim. Do you think it's worth waiting to start a company until you've nailed down which idea to take far? I've been leaning toward the path of starting a company before validation and naming it something generic just to take that friction away (and to pay for the validations/MVP with business funds). Kind of like Wildbit with their various products.

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        When you say "start a company" do you mean go through the official process of incorporation (i.e. c-corp or llc)?

        I personally wouldn't worry that stuff. At least for me, the up-front expenses for a project are minimal – usually just domain name and maybe some tools – every project I've ever done has easily fit on the free tiers for services like hosting, mailing lists etc. and not worth incorporating for those minor expenses.

        If startup expenses are major, then maybe it's worthwhile to incorporate to generate operating loss carry-forwards. Another option is to simply run your business as a sole proprietorship and I think you can deduct business losses against your other income (not a tax accountant so you may want to check that to confirm).

        I'm in California where the annual LLC tax is $800, so I wouldn't form an LLC unless my business was generating at least $1,000 ARR which in itself demonstrates a bit of traction.

        If you want to create an umbrella corp like Wildbit, I think that's fine, but to me, that would be an unnecessary distraction.

        Hope this helps and let me know if you have any other questions!

        1. 1

          Yea incorporating is exactly what I meant. Those are really great points. Sometimes I can be a perfectionist, and I think the idea of having anything “business related” be done under an incorporated name/business account sounded attractive but you’re totally right: that’s just distracting me from getting the ball rolling and getting ideas validated. Thanks Steven!

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            No problem, happy to help. I'm a perfectionist too, so I totally get where you're coming from.

            When I launched my first business, I was really excited about having an LLC to look official. Turns out, it's just a pain :( ... paying LLC taxes, drafting and submitting legal docs, other paperwork.

            I'm currently starting my second business (first one failed for various reasons) and I'm not going to go through that stuff until I know I have a real business on my hands. I just opened a separate business checking account (with debit and credit card) with Bank of America for revenue and expenses as a sole proprietor (took about 30 minutes on the phone) using my SSN as my identification number and home address as the business address. Don't even need a DBA. I'm pretty sure I can hook up Stripe using whatever business name I want. If/when I create an LLC, I'll have to create a new checking account and transfer the assets, but that's a minor hassle. Only expenses thus far are Google Domains and Google Workspace. I'm on the free tier for Firebase, Mailchimp, SendGrid, and pretty much everything else I'm using for now.

            Good luck!

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              Using a business checking account/credit card under your sole proprietorship seems like such a smart idea! Keeping income and expenses separated from your personal accounts just seems like it will make accounting and taxes so much easier in the long run. I'm totally going to go with that approach.

              I guess the other reason to eventually switch to LLC is for liability reasons and to protect your personal assets (which I don't believe a sole proprietorship can do even if you have that business checking account). But like you said earlier, at that point I imagine you're gaining traction and creating the LLC just makes sense anyways.

              Well good luck with your second business. If I can help you at all, definitely feel free to reach out. Like I mentioned, I'm much more experienced on the engineering/product/engineering management side of the house.

              Thanks again for the solid advice 🤘.

              1. 1

                No problem, happy to help. You're right about LLC for shielding liability ... technically you're "exposed" while you're a sole proprietor, but the risk is tiny when your business is starting up and for such a short duration (assuming your business isn't litigious or illegal). But eventually, LLC or some form of corporation is the right call.

                By the way, my wife is from Seattle, and we usually spend the summers there for vacation. Beautiful place!

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                  Oh nice! Yea it is beautiful here. It can sometimes be a struggle in the the winters though (like now) with all the gray and rain. Good call visiting in the summer time.

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    I guess is a character thing, personally, I'm not kind of guy that can build two things at a time: I'm passionate, and dedicated.

    There are people who can, that's also fine.
    My take, and quoting Delfos: "Know thy self."

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      Yea totally. It definitely seems like some people love to jump between ideas: like that one entrepreneur in SF who was printing fruit swag (along like 15 other companies all at once). Can't remember her name.

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        I heard the podcast too, she''s brilliant!

  3. 2

    if you chase two rabbits youll catch none.

    If you chase one rabbit, you may have gotten the smaller/less desirable one

    If you first chase both rabbits, compare them & focus in on the one you want, you'll win.

  4. 2

    I think small bets and focus are not mutually exclusive. In many ways, the bigger the 'bet', the less focused the 'bet' is.

  5. 2

    I'm having this dilemma, I'm trying to do small things without much dedication so I can drop it easily move on to next to see what works. This should provide me experience in the field as well. But doing this prevented me from marketing. I don't "believe" in those projects so it becomes a burden to write and talk about. I've started that way to improve my marketing skill and have more experience in the field so I'd overcome problems that may occur with my "main" idea. Yet it didn't worked for me. I believe thousands of people trying both methods so if we are talking about two names here I'd say that's sheer luck and there is not much to listen and take lessons.

    If someone suck it up and sell a regular pen as if the buyer becomes the next top selling author should go with the small bets. Otherwise should insist on one thing and become the master of it.

    quick correction in case of misunderstanding, by sheer luck I'm not saying their success came out of luck but the path they followed worked for them is the lucky part.

    1. 1

      Oh yea that sounds challenging. I've been similar in that I enjoy diving into the technical side and building right away, but I don't stop to market and get others excited about it. Then it's pretty easy to abandon (because nobody knows about it) so it's hard to stay the course. Looking to start marketing a lot earlier for my next ideas (partially to help keep me accountable).

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