This article is part of a series on strategies and hacks of self-made billionaire entrepreneurs. We divided it into eight parts: Charlie Munger, Warren Buffett, Ray Dalio, Jeff Bezos, Elizabeth Holmes, Steve Jobs, Reid Hoffman, and Elon Musk.
Billionaire Entrepreneur Strategy:
Elizabeth Holmes, the 31 year old founder of Theranos (valued at $9 billion) doesn't believe in backup plans. Speaking to a group of students at the Stanford Graduate School of Business, Holmes shared her philosophy, "I think that the minute that you have a backup plan, you've admitted that you're not going to succeed."
Conventional thinking says you should diversify when it comes to your career, business, and strategies within your business. The rationale is that if one option fails, you'll still have something to fall back on.
The problem with this approach is that it takes precious time and resources away from your best option. As a result, you decrease the odds that either one will work.
Holmes's approach is to spend extra time determining what to focus on and then put all of her energy into that one thing. The same philosophy is used by Warren Buffett who only makes 2-3 investments per year.
Another benefit of going all in on one career path is that you are building up your skills, network, and reputation in that field, so even if things don't go as you had planned, you can still use your 'career capital' to pursue your next big idea.
Finally, Katy Milkman, a professor at Wharton, has performed research that shows that backup plans come with another unexpected downside. She explains the downside in an episode of the Hidden Brain podcast, "Because you know that all your eggs aren't in this one basket, you may feel more confident and comfortable relaxing and letting up and not pushing as hard toward your primary goal since you know things will be OK, you can always go with your back up plan," says Milkman.
Billionaire Entrepreneur Hack:
By not having a backup plan, you can put all your energy into your primary plan.
But, in order for this to work, you need to have put in the extra effort to make sure you've prioritized correctly.
The "one thing" philosophy is a powerful approach that ensures you stay on track.
The heart of this approach is taking extra time to prioritize, so you always have clear view of the one most important thing you can do for the day, for the week, for the month, and for the year to push your vision forward.
Ryan Simonetti, co-founder of Convene, which has 150+ employees, applies the "one thing" philosophy by waking up every morning and asking himself, "What is the one thing I need to do today to help my company accomplish its singular vision such that by doing it everything else would be easier or unnecessary?"
In an Entrepreneur.com article, Simonetti shares, "When you compound this process over days, months and years, the impact is truly astounding. It is the 80/20 rule on steroids."
Professor Edward D. Hess has spent much of his career studying the outliers (both private and public companies) that achieved above average shareholder returns. What he shares in his book, Smart Growth, is that focus on a singular vision is one of the key themes of successful companies.
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