Little Bets [Review]

Mar 06, 2013

Table of contents:

  1. Taking action
  2. Knowing what you can lose, rather than what you can gain
  3. Body of work
  4. The Growth Mind-set
  5. Failing quickly to learn fast
  6. The genius of play
  7. The benefits of restriction
  8. Questions are the new answers
  9. Learning a little from a lot
  10. Learning a lot from a little
  11. Small wins
  12. Conclusion

“Little Bets: How breakthrough ideas emerge from small discoveries” is a book of research and stories on how great innovation stems from experimenting and discovery through constant iteration. Whilst it often seems like great innovators are able to predict the future and become over night successes, it is more often the case that these people have actually been experimenting for a long time before finding their discovery.

Little Bets looks at the backgrounds of people from a range of industries to see how they have achieved their great innovations. From business to design and entertainment, a common process of constant experimenting of small ideas and initiatives is where the big discoveries usually lie.

In a world of unpredictability, it is almost impossible to make future projections of financial return or success of a new product when there is no existing evidence. Large incumbent companies are often the cause of their own failure because they neglect to experiment with new ideas. It is usually the case that it is the new startup who is willing to take a risk and try something new that leads the next wave of innovation. This problem is covered extensively in Clayton Christensen’s The Innovator’s Dilemma.

Little Bets looks at how we can change our education and culture to fuel experimental discovery and move away from the procedural methodology that lingers from the industrial revolution.

Taking action

One of the guiding principles of Little Bets is, it is always better to take action, even with incomplete information. This means some portion of the time you will be wrong, you will make the wrong decision and you will fail.

Failure is an important component of the Little Bets approach. When you are experimenting, the majority of your actions will be failures. But it is only through these failures that you will find what actually works.

Failure should only be a bad thing when it is combined with big bets. Big bets make large predictions and put great precedence on the outcome being true.

The taking action principle is important for innovation within the context of a company. When management and decision making is top-down, innovation is impossible because your employees are not free to experiment and make decisions on their own.

Knowing what you can lose, rather than what you can gain

Part of accepting failure as a part of the process of making little bets is to ensure you have the right outlook. It is impossible to predict the outcome of innovation and so you can’t possibly know what you have to gain from your work. Instead, you must know what you are losing each step of the way. When you can make small sacrifices and loses that then lead to an opportunity for innovation, you have achieved the required outlook.

Body of work

In order to make real discoveries that lead to innovation, you need to immerse yourself into the environment so you truly understand the nuances of what you are trying to achieve. The only way of doing this is to fully commit to creating a large body of work that makes you an expert in your field. Great innovations are not made by outsiders, they are made by people who have dedicated themselves to really understanding how something works and how a synthesis of ideas can lead to disproportional innovation.

The Growth Mind-set

Having the right Mind-set is critical to using the Small Bets approach. Humans basically embody either one of two mind-sets, fixed or growth.

A fixed mind-set is where you believe you are born with certain abilities, intelligence or talents. These types of people favour doing activities where they succeed first time. When someone with a fixed mind-set encounters a problem or activity where they fail, they will often give up and question their self-worth.

On the other hand, people with growth mind-sets believe that effort is more important than ability and that if you keep trying at something, you will eventually master it. People who embody the growth mind-set seek out difficult problems and activities where they fail at first.

Having the right mind-set is important to discovering big innovations or doing truly great work because the hard problems will cause you to fail at first. Mind-set is not set in stone, and so if you naturally feel like you have the characteristics of a fixed mind-set, you are able to alter it by exposing yourself to difficult problems and constantly trying to find solutions. The process of constant little failures until the final success is more important than the mind-set you developed over time.

Failing quickly to learn fast

The Little Bets mindset is not seeking failure, but rather, failing quickly in order to learn what works. This means producing lots of rough ideas as quickly as possible and then iterating on top of them to find the solution. Prototyping is an important process because it allows you to get your ideas out into the world so you can see what assumptions were right, and what areas need refining.

Perfectionism can be both healthy and unhealthy. Healthy perfectionism encourages you to produce work of a high quality and motivates you to continue to keep working until you find the solution or get the end result you were looking for. Unhealthy perfectionism is where you are looking for validation from the outside world, other people’s approval or you are scared to put your work out for critical consideration. Failing fast is an important trait of perfectionism because you need that desire to continue persevering through systematic failures and wondering down blind alleys to find really great work.

The genius of play

When working in a creative or an aspiring to be innovative environment, it is important to create a culture of playfulness. Playing is the act of generating new ideas one after the other and not critically judging each one. The flow of playing is where you get lost for hours in generating new ideas as one inevitable leads to the next.

Improvisation is where you are riffing on ideas that can often seem outlandish or completely outside the box. When musicians are asked to play set music and then to play an improvisation, research shows they use different parts of the brain. When playing set music, their brains are keeping them in line and making sure they make the right decisions. When improvising, that part of the brain is switched off and so they are allowed to make decisions as they go.

Playing and improvisation is an important part of creating innovative ideas because it generates things that are so completely different to the accepted norms. Children are much better at this activity because they have not suffered the education system that hammered the act of answering with only the right answers.

In order to create this environment in a company, senior members of staff must ask even the newest and least experienced employees for their opinions, listen to them and act of them. Senior staff must admit when they are wrong and allow younger members of staff to take the lead without specific instruction.

The benefits of restriction

When looking to solve big problems or take on big projects, it can be difficult to make a start because the perceived amount of work can seem daunting. When you start a project without restrictions it will often lead to an overall failure.

Creativity requires restriction in order to breed. You need to work within the box of restriction in order to create innovative ideas.

Breaking down bigger problems into much smaller problems and then tackling them systematically is a much better way of working. Traditionally software projects arose from a perceived problem. The features and requirements were drawn up, designed and then created. This is usually an arduous process that takes too long and can’t readjust for feedback. By the end of the process, the software is usually not right for solving the problem. Agile development is now the more accepted way to develop software. In Agile development, small cross functional teams are taxed to do work in 2 week sprints. At each stage the work is evaluated with real customers and then the course of the project is adjusted following feedback. This constant readjustment follows in the constant failures approach of Little Bets and allows teams to test and validate their assumptions before getting to the end of the project.

Questions are the new answers

In order to make discoveries, you need to completely immerse yourself into the field. It is impossible to make discoveries or find problems when you are stuck in an office or looking at a problem with a bird’s eye view. In order to understand a problem you have to go out and see it for yourself.

By immersing yourself into the problem you begin to ask questions and synthesising your views based on your questions and your prior experiences. Without this immersion, you are making assumptions about the problems that will likely be proved wrong once you actually encounter them.

In Steve Blank’s two books, The Four Steps to the Epiphany, and The Startup Owner’s Manual, “getting out of the building” is one of the strongest messages to new entrepreneurs. It’s not until you see your customer’s problems that you can begin to find solutions.

Learning a little from a lot

One of the key characteristics of someone who makes breakthrough discoveries is an uncanny ability to synthesis various ideas. The assumptions of an expert are based only on that expert’s previous experience and so in order to gain a wider perspective of knowledge and experience you need to expose yourself to chance opportunities and listening to the opinions and views of others.

Whilst it might seem like a waste of time talking to someone who does not posses a deep understanding of your topic, you will be able to see their position and their views on what is right or wrong, something that you would never be able to see for yourself.

The ability to immerse yourself into other people’s worlds and to embrace their views and opinions in order to assimilate your own is an important characteristic for a good leader. Bill Hewlett and David Packard of Hewlett-Packard were known to be always walking around the office, discussing what the engineers were working on and regularly having lunch with all types of people in the company to understand their perspective.

The outlook of accepting chance opportunities and encounters has also been found to be a characteristic of people who deem themselves to be lucky. When you are open to new experiences, meeting new people and taking a risk on the unknown, you naturally find that more good opportunities come your way. When much of the success of a person comes down to who they know and the relationships they form in life, being open to chance opportunities is a strong driving force in being “lucky”.

Learning a lot from a little

When a new idea is introduced to the world, it will always follow the same adoption path, no matter what type of idea, product or concept it is. As covered in Geoffrey A. Moore’s Crossing the Chasm, new ideas move from early adopters to the mass market and then to the late laggards. It is the experimentation stage of the early adopters that really enables an idea to be accepted by the mass market.

Early adopters are hardcore people who live and breath for your industry. They want the latest information, the newest ideas and they accept that products will not be fully formed. Early adopters seek out new ideas because they want to be part of the formation process of the exciting new thing. By seeking out early adopters, you can formulate your ideas with real market feedback. It is the insights of the early adopters that will enable you to build a product or form an idea that will be accepted by the mass market of people.

Small wins

A fundamental component of the Little Bets approach is seeking out small wins in order to lead the way for future progress. Taking an iterative approach means you start your journey without an all encompassing vision of where you will end up. In order to keep progressing, you need to make small pivots on the outcomes of your experiments.

Agile development is all about an iterative feedback loop of small experiments. If the customer feedback of an experiment is positive, a new course can be charted that will further explore that path. If the feedback is negative, the team has learnt important information on where they should focus their time.

Small wins are important because you need that constant validation that you are making progress. When creating innovative new products, you can’t look at the experiences of other people in your industry because their workflow and outlook will be fundamentally different. Small wins provide a feedback loop for staying on course and reassurance that you are going down the right path.

When taking the Little Bets approach, it’s important to ensure that you have checkpoints and small wins so you know you are on the right track.


Little Bets is a fascinating and inspiring book on making big discoveries. Through the experiences of other innovators across many different industries, it is clear that the Little Bets approach is the right way to create innovative work.

The Little Bets approach can be long and difficult, where each new day you feel like you have only taken a small step. But over time this progress compounds into an “overnight” discovery.

By covering great innovators like Pixar, Steve Jobs, Chris Rock and Muhammad Yunus amongst many others, you will learn how these people made their big discoveries, what approach they took and how they put themselves in a position to do really great work.

Buy Little Bets: How Breakthrough Ideas Emerge from Small Discoveries on Amazon (Affiliate link).

Philip Brown


© Yellow Flag Ltd 2024.