Why diversifying is not always the right choice for entrepreneurs or investors...
Everywhere I look I seem to see the word "diversify".
In the world of business and finance it seems like a no brainer. You balance out your losses and wins to keep a steadier ship. The problem I have with it is that it often doesn't take into account who should be diversifying.
For example, if you have $1000 in the bank, you don't need to think about diversification. In fact, if you have less than $50,000 you shouldn't be looking at diversification. Why? Because at these levels, you're the only person who is managing your portfolio, whether it's your business, financial or otherwise.
Why does that matter? Simple! When you have a small amount of money to work with, focus is more important than diversification. Most successful entrepreneurs focus on one thing and doing it better than any one else. It might be selling lemonade. It might be making cosmetics. It might be building a space ship. You name it, most successful entrepreneurs were able to, at a given point in time, focus on what they needed to do.
If you diversify too early, your focus will be shifted on 2, 3, 4 or 10 places. As a single business owner, entrepreneur, investor, whatever, you only have so much time and brain power.
Many gurus and entrepreneurial "experts" often advertise that you need to be working around the clock to make things happen. You need to diversify. You need to be on the cutting edge. This is only partly true. Why then are there dreams built on Etsy, making leather belts, hats and even shoes? These are "old" ideas. How are they successful? They are just doing it better than anyone else!
If you're able to focus on one thing, your going to come up with better ideas. You're also going to be able to fail faster, which is essential to the entrepreneurial journey.
Remember, you don't need an original idea to win. You just need to be better than the next guy (or girl).