Amazon started off selling books. It could have tried to increase it's valuation by becoming better at selling books and by selling more books in more geographies. But, Bezos asked himself what Amazon ought to be doing to increase it's valuation ten-fold and a hundred-fold and that resulting in diversifying to the everything store and not just a store of books.
You see a lot of startups that do this. They start off offering one product and once they start doing that successfully, figure out how to add more value and as a consequence, command a higher valuation when they raise money again.
It is the same with traditional small businesses as well. A restaurant that is doing well will invest in opening another restaurant in a different part of town or in a different city and then another and so on, each time investing first and deriving more value later.
Of course, this always carries the risk that the new investments don't work out as planned. Amazon could have crumpled under its own weight by trying to sell everything under the sun. A startup diversifying their product portfolio might end up being mediocre in all of them and failing to raise further money. A small business might start a second restaurant that might not do as well as the first one losing the owners some investment.
But, without taking on this risk, none of these have a chance of commanding a much higher valuation or higher profits at a later date. The need to invest in new efforts first and only then do they stand a chance of that paying off later.
Yet, when it comes to our personal habits and career choices, we take the opposite approach. We think the first book we write deserves to become a bestseller, the first blog post we write deserves to go viral. We think that we ought to be promoted before we take on more responsibility. After all, why do work that we don't get paid for, right?
Wrong.
The same logic that applies to startups and small businesses (and big companies too) applies to us as well. Only if we take the risk of taking on more responsibility and putting in more effort will we even stand a chance of being rewarded later on.
Sure, the effort we put in might not work out. We might end up doing more work than what we get paid for. We might end up publishing things that don't go viral.
But we won't win the lottery without buying a ticket.
If you were to open a restaurant that charges twice as much as any other restaurant, what value can you provide to justify that price tag? If you want to command a higher valuation for your startup, what value can you provide to justify that? If you want to be promoted at work, what responsibility can you take on today to justify that? If you want to publish a bestseller, what value can you provide to justify that?
It all starts with taking that first step towards creating more value for those around us. Very rarely the other way around.
You see a lot of startups that do this. They start off offering one product and once they start doing that successfully, figure out how to add more value and as a consequence, command a higher valuation when they raise money again.
It is the same with traditional small businesses as well. A restaurant that is doing well will invest in opening another restaurant in a different part of town or in a different city and then another and so on, each time investing first and deriving more value later.
Of course, this always carries the risk that the new investments don't work out as planned. Amazon could have crumpled under its own weight by trying to sell everything under the sun. A startup diversifying their product portfolio might end up being mediocre in all of them and failing to raise further money. A small business might start a second restaurant that might not do as well as the first one losing the owners some investment.
But, without taking on this risk, none of these have a chance of commanding a much higher valuation or higher profits at a later date. The need to invest in new efforts first and only then do they stand a chance of that paying off later.
Yet, when it comes to our personal habits and career choices, we take the opposite approach. We think the first book we write deserves to become a bestseller, the first blog post we write deserves to go viral. We think that we ought to be promoted before we take on more responsibility. After all, why do work that we don't get paid for, right?
Wrong.
The same logic that applies to startups and small businesses (and big companies too) applies to us as well. Only if we take the risk of taking on more responsibility and putting in more effort will we even stand a chance of being rewarded later on.
Sure, the effort we put in might not work out. We might end up doing more work than what we get paid for. We might end up publishing things that don't go viral.
But we won't win the lottery without buying a ticket.
If you were to open a restaurant that charges twice as much as any other restaurant, what value can you provide to justify that price tag? If you want to command a higher valuation for your startup, what value can you provide to justify that? If you want to be promoted at work, what responsibility can you take on today to justify that? If you want to publish a bestseller, what value can you provide to justify that?
It all starts with taking that first step towards creating more value for those around us. Very rarely the other way around.
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