Few companies have failed more than Google.
Over the years, they’ve killed more than 200 products, including Google+, Answers, Wave, Translator Kit, Bulletin, Cloud Messaging, URL Shortener, Allo, Realtime API, Portfolios, Offers and others that you haven’t heard of. Together, these apps represent billions of dollars spent and many hours invested.
With all these failures, how is Google still one of the most profitable companies in the world, with more than $161 billion in annual revenue and net income of more than $34.3 billion?
Because they consistently make big, bold bets.
Sure, many of the bets don’t pay off, but the ones that do produce enormous results. Google Ads. YouTube. G Suite. Android. Chrome. Pixel. Maps. Multi-billion dollar ideas that separate Google from its competitors.
In the book How Google Works, Eric Schmidt and Jonathan Rosenberg note:
Most people tend to think incrementally rather than transformationally or galactically… That’s why one of [Google founders] Eric and Larry’s challenges to engineers and product managers in Google product reviews was always “you aren’t thinking big enough”… Later replaced by the Larry Page directive to “think 10x.”
In my book Rethink Your Marketing, I explored more than 50 examples of companies and brands that unleashed growth. In EVERY case, they took big, bold, decisive action.
The reality is that intelligent, bold action leads to growth. Tinkering around the edges will only get you so far. If you want serious growth, you need to be bolder. You need to be decisive. At a certain point in your growth trajectory, you need to push the chips into the center of the table.
If you don’t have the backbone to do that, realize that you’re the one holding back your company, not the competition. Ouch!
Examples of Companies That Make Big, Bold Bets
We already talked a bit about Google, but we didn’t mention X, The Moonshot Factory, which is the division of Google that specifically works on finding radical new solutions for enormous problems. As the website states:
Our goal: 10x impact on the world’s most intractable problems, not just 10% improvement. We approach projects that have the aspiration and riskiness of research with the speed and ambition of a startup.
- Providing internet access to rural areas using balloons
- Using drones to deliver packages
- Transmitting internet data with beams of light
- Protecting the ocean through an underwater camera system and machine perception tools
Many of these projects may never come to fruition, but the ones that do have the potential to change the world. They also ensure that Alphabet (Google’s parent company) doesn’t stagnate and continues to grow aggressively.
Hilti, the high-end power tool manufacturer, gambled when they completely changed their revenue model to better suit the needs of their customers. They realized that contractors made money by using tools, not owning them. They began selling their customers use of equipment instead of the equipment itself. For a set monthly fee, the company would manage inventory, make repairs, supply automatic upgrades, etc. Workers on construction sites could then rely on “just in time” tools delivery instead of needing to make upfront, costly investments while risking that they may be missing certain equipment when they need it most.
The result? Many contractors who had previously purchased tools from a number of companies started consolidating their tool purchases and working predominantly with Hilti.
General Electric made a big bet when they focused on digital transformation of the 128 year-old industrial company. GE realized that digital, data-driven services offered the opportunity to transform operations with innovations in productivity, efficiency and scalability.
The initiative included the development of their Predix software. The goal? To make sense of the millions of data points generated by GE industrial equipment and machines.
The bet paid off in ways that they couldn’t have imagined when they first began development. Not only does the data help them better optimize the industrial assets they produce, but they realized that it could also help other companies connect, optimize and scale their digital industrial applications, as well. To that end, GE made a big bet yet again and turned Predix into a platform for third parties, one on which customers can even develop and deploy their own software applications.
According to GE, the industrial internet of things (IIoT) market is now estimated to be over $14 trillion of global GDP by 2030. Selling the platform to other companies has generated billions in new revenue for the company, and is sure to generate billions more.
Become an Innovation-Centered Organization
Explore strategies to drive new traffic, leads and growth. Let’s Talk!
Amazon is another example of a company that consistently takes big, bold, boundless bets in order to achieve meteoric growth. In 2003, at an executive retreat at Jeff Bezos’ house, the executive team realized that the company had gotten really good at running infrastructure services (databases, storage, etc.) and data centers. Three years later, Bezos and company took a big gamble by launching Amazon Web Services (AWS). Today, AWS drives around $35 billion in annual revenue for Amazon and powers a huge amount of the internet, with companies like Netflix, LinkedIn and Facebook using the service.
The list goes on and on. Look at any company that has experienced meteoric growth and you’ll find at least one big bet in their evolution as a business.
How to Decide on the Best Big Bets
Strategy is just as much about what to say “No” to as to say “Yes” to. So how can you decide which big bets are worth making? Here are a few strategies to consider.
Explore Outside Ideas
Cross-pollination of ideas is one of the most powerful forces in achieving innovation and breakthrough. Use lateral thinking to approach problems from new angles. Don’t rely on “best practices”, as those tend to generate copycat ideas and stale, mediocre results.
Shopify started out as an ecommerce company selling snowboarding equipment. Eventually, they realized they could be much more successful if they sold their proprietary ecommerce platform to other businesses. If they hadn’t been open to the idea of pivoting to an entirely new business model, they wouldn’t be the billion dollar company they are today.
Use a Decision Matrix
When evaluating big bets, it can be helpful to run them through a decision matrix. This matrix should include:
- Value to the Target Audience – No matter how easily, fast or cost-effectively you can implement your idea, how much of an actual impact will it have on clients?
- Speed to Implementation – How soon can you implement the idea? When do you expect to see results? Can you afford to wait this long?
- Cost – How much will this cost to implement? Do you have the financial resources to make this investment? And is it worth the investment?
- Difficulty Level – How hard will this be to implement? Which team members will need to be involved? How much time will it require and do you have the bandwidth to make it happen?
- Expected ROI – Ultimately, what sort of return do you expect the idea to generate? Does the return justify the cost and amount of effort required? Remember that it often takes just as much effort to work on initiatives with a limited potential for ROI as it does to work on ambitious ideas that are transformative, so don’t hesitate to think big.
Running potential big bets through this type of decision matrix can give you clarity on which opportunities to pursue and which ones aren’t worth the effort.
Another useful question to ask yourself is where the company will be in the case that you choose not to make the bet. It’s a question that should be asked and discussed openly. In the case that it’s obvious a competitor will swoop in to capture the opportunity and you’ll lose business or market share as a result, revisiting your decision matrix would be prudent.
Make Decisions Fast
Too many organizations discuss and debate ideas endlessly but never pull the trigger. People are too afraid to take responsibility and be held accountable for their decisions.
Be decisive. You shouldn’t expect 100% certainty with your decision, as that time will likely never come. Instead, aim for sufficient validation of the idea. Aim for enough audience feedback that you feel confident in moving forward.
Writing for McKinsey & Company, Aaron De Smet and Leigh Weiss state:
It’s often better to make a fast decision with 80 percent of the necessary information and analysis than wait until everything is available. We’ve seen companies wait so long to acquire a target that in the meantime, a competitor grabs the prize.
McKinsey found that digital leaders outperform their peers across a variety of factors, giving them a competitive edge, and with this in mind, launched a new business, Leap. The new entity teaches companies how to make big, bold bets by jump-starting new digital entities, fast. Already, Leap has helped to rapidly launch more than 200 new digital businesses. Now that’s thinking big AND fast.
The Importance of Going “All In”
Once you decide on a course of action, go all in.
Ensure that you have 100% executive buy-in and make the project a top priority. Communicate clearly about the direction that you’re headed and take clear action that demonstrates your commitment. It’s imperative that everyone sees the absolute resolve, dedication and perseverance displayed by upper management.
Without this level of commitment at the top, the probability of success decreases dramatically.
Will You Bet Big?
Ultimately, you have to decide whether you want transformational results or whether you’re content with small, incremental growth. If you want to 3X or 5X or 10X your results, you need to make big, bold bets.
What bets are you placing this year?
Transform Your Marketing
Explore strategies to drive greater results for your business. Let’s Talk!