Little Bets by Peter Sims

University of Chicago economist David Galenson spent years studying groundbreaking creators, delving deeply into their personal histories and work methods. He divided innovators into two basic types, and called them conceptual and experimental. Conceptual innovators, such as Mozart, tend to pursue bold new ideas and often achieve their greatest breakthroughs early in life. On the other hand, experimental innovators use iterative, trial-and-error approaches to gradually build up to breakthroughs.

In ‘Little Bets’, Peter Sims strongly recommends the latter as the most practical route to success…

Fundamental to the little bets approach is that we:

  1. Experiment: Learn by doing. Fail quickly to learn fast. Develop experiments and prototypes to gather insights, identify problems, and build up to creative ideas, like Beethoven did in order to discover new musical styles and forms.
  2. Play: A playful, improvisational, and humorous atmosphere quiets our inhibitions when ideas are incubating or newly hatched, and prevents creative ideas from being snuffed out or prematurely judged.
  3. Immerse: Take time to get out into the world to gather fresh ideas and insights, in order to understand deeper human motivations and desires, and absorb how things work from the ground up.
  4. Define: Use insights gathered throughout the process to define specific problems and needs before solving them, just as the Google founders did when they realized that their library search algorithm could address a much larger problem.
  5. Reorient: Be flexible in pursuit of larger goals and aspirations, making good use of small wins to make necessary pivots and chart the course to completion.
  6. Iterate: Repeat, refine, and test frequently armed with better insights, information, and assumptions as time goes on, as Chris Rock (American Comedian) does to perfect his act.

The little bets approach is about using negativity to positive effect. If your plans fall apart, refine them; if you don’t know where best to begin, just begin somewhere. Every decision is a risk; take a chance and see what happens. Experimental innovators must be persistent and willing to accept failure and setbacks as they work toward their goals.

We grew up on ‘Think first and act later’ and ‘Look before you leap’. Sims argues that it can be more rational to act first and think later, more efficient to fail and find out what doesn’t work. Because, ingenious ideas almost never spring into people’s minds fully formed; they emerge through a rigorous experimental discovery process. In fact, most successful entrepreneurs don’t begin with brilliant ideas; they discover them.

The entrepreneurial way of operating was also the subject of some fascinating research by Saras Sarasvathy, a professor at the Darden Graduate School of Business at the University of Virginia. In one of her studies, titled “What Makes Entrepreneurs Entrepreneurial,” she argues that the approach enables us to focus on what we can afford to lose rather than make assumptions about how much we can expect to gain. The affordable loss principle! Successful experimental innovators tend to view failure as both inevitable and instrumental in pursuing their goals.

What stops us from being experimental? Great emphasis gets placed in our education system on teaching facts, such as historical information or scientific tables, then testing us in order to measure how much we’ve retained about that body of knowledge. Memorization and learning to follow established procedures are the key methods for success. Even when we are taught problem solving, such as solving math problems, the focus is generally either on using established methods or logical inference or deduction, both highly procedural in the way they require us to think. There is much less emphasis on developing our creative thinking abilities, our abilities to let our minds run imaginatively and to discover things on our own. We are given very little opportunity, for example, to perform our own, original experiments, and there is also little or no margin for failure or mistakes. We are graded primarily on getting answers right. In essence, we’re taught to be linear thinkers – to follow pre-established procedures and plans – in a nonlinear world. If only the world were predictable!

To be sure, experimental innovation should not entirely replace linear thinking in our regular work processes. Engaging in discovery and making little bets is a way to complement more linear, procedural thinking.