Insights from “Little Bets”

I’ve always been curious about how innovations are born. Initially, I thought that one had to be ingenious to come up with an idea that could make a huge impact. But as I dived into this topic, I discovered that success comes from constant and consistent experimentation and a mindset open to new approaches. Little Bets by Peter Sims is a great example of a book that clearly communicates the core principles behind the innovation process. The author stresses that most successful entrepreneurs don’t begin with great ideas — they discover them. And since there’s no single creative model that can have a guarantee of success, the fundamental approach is to experiment and learn by doing. In this article, I’ll share some of the key insights from the book that have helped me along the way.

Accept uncertainty

Many people are hesitant to engage in something with no guarantee of success. They want all the effort they apply to lead to specific, measurable, positive outcomes. But this is not how innovation works. What can be guaranteed is that many ideas will actually lead to a dead end. But some of them might potentially explode into a broad avenue of opportunities. And to get to these opportunities, it is critical to accept uncertainty and start experimenting. There’s no magic pill — just the iterative trial-and-error approach that can eventually lead to breakthroughs.

Companies need to tolerate failure and praise mistakes

The author stresses that a large number of companies today still have a low level of tolerance for failure and mistakes. Employees are only praised for getting the answers right. In such environments, experimentation cannot thrive, as employees are afraid to fail. Companies that want to be innovative and have at least a chance for a major breakthrough need to build a culture where making mistakes is cool, and this needs to be clearly translated by management. But of course, just failing is not the key — the key is systematically learning from failures. All team members need to closely monitor what is working and what isn’t and make good use of that information. Management, on the other hand, needs to clearly determine affordable losses. Since the “Little Bets” approach would inevitably result in a failure every now and then, there needs to be a clear answer to the question: “to what extent can the company afford to experiment, both to create opportunities for success and not to end up having a financial catastrophe on its plate?”

Be ready to walk away from ideas that seemed great

It can be hard to give up when you’ve already invested a lot of time and resources. But for those aspiring to become true innovators, it needs to become an essential part of what they do. To get on track for success, one needs to accept that failure and being imperfect are critical components here. The author also stresses that a willingness to fail is one of the core global values of the culture of Silicon Valley.

Develop growth mindset

Studies show that there are two main types of mindsets: fixed and growth. People with a fixed mindset consider everything predetermined and tend to gravitate toward outcomes that confirm their abilities. They also find it hard to maintain confidence, because any difficulty or people who are naturally better at the task at hand all pose threats. People with a growth mindset view failures as opportunities for growth. They tend to seek cases that extend their abilities. It’s important to highlight that the growth mindset is not about not caring about failure — it’s about teaching oneself to think differently and seeing failure as an opportunity for learning and growth. In order to develop their growth mindset muscle, people need to focus on doing versus planning.

Use prototypes to fail quickly

Another Silicon Valley principle that is highlighted in the book is pushing your ideas to the market fast in order to fail fast and learn from the experience. Many tend to think that, in order to facilitate the efficient launch of a new product, they need to come up with a perfect plan that would take into account every potential customer demand, problem, and factor. But the problem is that we don’t know what we don’t know. We have no idea how the market is going to react to our new product. We don’t know which features are going to be a hit and which would be completely irrelevant to our clients. And the only way to find out is to bring the prototype to the market in order to get the consumers’ reaction. It’s important to not be afraid to show your ideas when they’re still rough. Also, in such cases where your idea is still fresh, you wouldn’t be so emotionally invested and protective of them. The barrier to accepting feedback would be lower and you would have the right attitude, in order to say: “OK, now we know what the market needs and which improvements need to be made to our product”.

Nothing is too silly

Improvisation is an essential component of the innovation process. The author recommends following two principles when improvising:

• (1) accepting every offer and
• (2) making your partner look good.

The former is about not dragging your team members’ ideas through a critical lens. The recommendation is to use “yes, and…” language. For example, when one of your colleagues is suggesting an idea, you say “yes, and…” which is then followed by your idea or a suggested improvement of your colleague’s idea.

The latter principle is about maintaining positive energy that drives improvisation and reduces doubts. When you praise the ideas offered by others, you support people to build upon them and, as a result, often come up with brilliant solutions.

Break a large goal into smaller problems

It’s often the case that teams’ challenges seem so huge that it is not even clear where to start. People tend to delay starting to work on such problems, even though, after a while, the problem is still hanging in the backlog causing additional unnecessary stress. The solution here is to break the larger project or goal into smaller tasks, so the scope of work can be constrained. In this manner, it’s much easier to solve one key problem after another, rather than taking on the entire issue at once. When working on smaller problems, people are often more creative and effective. Also, when we break larger challenges into smaller ones, we see constraints with each of them that could potentially be an important starting point in problem-solving.

Be curious and learn from others

The research the author conducted indicates that innovators tend to observe details about other people’s behaviors. It is well known that many brilliant products and services were born not as standalone items but as a result of improving something that has already existed. Creative people discover opportunities for such improvements by being voracious questioners and proactively networking with people who come from different backgrounds. Learning from people with different perspectives enables them to challenge their assumptions and gain broader insights. Innovators also tend to gather insights from experts in their field, since they deal with specific challenges on a daily basis and know better than others where there may be room for improvement.

The new definition of “lucky”

The author highlights that people considered lucky by others tend to be open to opportunities and insights that come along spontaneously. They tend to pay more attention to what’s going around them and, as a result, whenever a window of opportunity opens, they react immediately. When someone gets a win, no matter big or small, people often say “he was just in the right place in the right time”. But for those who are responsible for building their own luck, this expression actually means being in the right state of mind.

Watch for small wins

Small wins can be defined as concrete complete implemented outcomes of moderate importance. They are small successes that grow from our ongoing development process and it’s important to watch out for them. They serve as indicators that you’re moving in the right direction, or they can be landmarks telling you that the course needs to be changed. The main challenge associated with them is that there’s no way to predict them — the only way is to experiment, develop prototypes, and throw them on the market. But there’s no better way to validate and adapt ideas than paying attention to small wins.

The list of insights from Little Best provided here is not exhaustive, and only covers some of the great ideas presented in the book. I strongly recommend reading the whole thing to anyone interested in improving the innovation process.