After moving his small Facebook team to Palo Alto in the summer of 2004, he turned much of his attention to building a file-share product called Wirehog. Facebook was going gangbusters, but Zuckerberg wasn’t sure it would last; this was his hedge.
“The Maturation of the Billionaire Boy-Man” by New York Magazine
Whenever I meet an entrepreneur that tells me about their side projects, I cringe. Experimentation is good, but hedging is a flawed startup strategy. If you want to go into the markets and hedge as an investment strategy, that is perfectly sensible. The juggling act of managing two or more products at the same time however is a recipe for disaster.
Product hedging never works. Great products are evolved and molded by people that are passionate and wholly invested in a singular idea. On the other hand, the product of hedged bets looks like Frankenstein. This is the provenance of big companies and corporate decision making which is all about compromises. That is why great innovation rarely comes from big companies.
You either believe in what you are doing or you do not. Instead of spreading your bets, double down on your thing and make is succeed come hell or high water. Leave the hedging to mega-corporations and money managers.
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