The 365 Best Business Books Of All-Time: Little Bets

There are two basic types of innovators: conceptual and experimental.

Conceptual innovators tend to pursue bold new ideas and often achieve their greatest breakthroughs early in life. Like Mozart, for instance.

More common are experimental innovators. These creators use iterative, trial-and-error approaches to gradually build up to breakthroughs. Experimental innovators are persistent and willing to accept failure and setbacks as they work toward their goals.

Thomas Edison famously said, “If I find ten thousand ways something won’t work, I haven’t failed. I am not discouraged, because every wrong attempt discarded is just one more step forward.”

Edison was an experimental innovator, and you can be to with the help of the principles from the book Little Bets (watch, listen to or read the full summary here).

My Key Takeaway/Principle

Make sure your failed experiments produce affordable losses.

The predominant approach to management that evolved during the industrial era, known as scientific management, broke jobs down into specific, sequential tasks, which could then be allocated appropriate times for completion to optimize efficiency.

It was these methods that allowed Henry Ford to streamline automobile production, first revolutionizing manufacturing and then the service business. But the emphasis on linear systems, control, relentless efficiency and eradicating failure leaves little room for creative discovery and trial and error.

Unfortunately, most of what we would like to be able to predict is unpredictable and uncertainty is becoming ever more common with the accelerating pace of technological change. Thus, a key flaw with the top-down, central planning approach is how it limits our ability to be flexible and discover new ways of doing things.

No-one can take their eye off core business or responsibilities, but everyone can spend a portion of their time and energy using little bets to discover, test, and improve new ideas. In trying out new things, successful entrepreneurs tend to identify what they are willing to lose, rather than calculating what they expect to gain.

Using Little Bets aligns to the affordable loss principle. It lets us incrementally build on success as we progress with an idea. Of course the subject of affordable losses highlights a key issue with the little bets approach — it inevitably involves failure.

Successful innovators tend to view failure as both inevitable and instrumental in pursuing their goals and approach these with a growth mind-set.

Questions to ask yourself

• When I’m designing an experiment, how can I ensure that I can afford to fail?
• How can I de-risk other portions of my business using this same concept?

What else is covered in this book?

You’ll learn the one mindset that an innovator can use to generate creative options more freely, why “smallifying” can help you generate better options, and how “plussing” and “playing” can help increase group communications.

This year (2018) I’m reading and summarizing the top 365 business books of all-time. You can get the full list of books, and links to my reviews of each book, by clicking here.

Happy learning!