There is so much choice everywhere we look today.
For consumers or producers alike, choice is a double-edged sword.
When we go to the supermarkets, the bread isle, in particular, is full of different brands and companies creating the exact same, homogenous good.
When we go to the drinks isles, there are so many different brands of fizzy drinks and soft drinks.
There's Coca-Cola, Pepsi (which I thought were the same brand until a few years ago), Dr Pepper, 7Up and so many more.
When we want to go out with friends or family, it's hard to make a choice between what we want to eat or where we even want to eat out.
We may even sit there for half an hour thinking through all the possible choices we have until we make the same decision that we make every other time we're out.
These are only the start of the choices we face as consumers.
Within the realm of the producers and entrepreneurs, the choices only get wilder.
When we first decide to venture into the world of business, we're immediately faced with overwhelming choice.
It's like choosing what baby we want.
Each business has its ups, downs, each business takes a certain amount of time to get up and running.
Do we go with the boring old dropshipping store as our first business?
Do we want to start a tech company?
Are we looking to serve clients through an agency?
Luckily for you, I've made a list of great side-hustles anyone can and should try out!
We may even get shiny object syndrome and start jumping from business to business.
This curse was something I had to face for a while until I settled down with one business - Hawk, which is set to release very soon.
Once we make this decision, we're immediately bombarded with many more decisions.
The logo design.
The business name.
How we're going to build it.
How we're going to get customers or clients.
Business is almost like a series of choices - those who successfully make the smart choices, are successful whilst those who make the wrong choices, or worse, don't make choices, fail.
I've previously spoken at length about why most startups, 90% specifically, fail.
Going back to that article, I would argue that most of the failures there are a result of poor choices.
Not to spoil the article, but one of the reasons, building something with no demand, would be a poor choice made by the founders.
They could have done better market and audience research before building the product.
By now we're probably starting to get a glimpse into why choice is actually a bad thing.
But in this article, I wanted to dig a little further into the problems with too much choice for entrepreneurs.
The problem with too little choice
Before discussing the inherent issue with too much choice, I first wanted to dig into the reasons why too little choice may also be an issue for entrepreneurs.
Firstly, let's say we only have 2 sorts of businesses we can start - a tech company or an agency for example.
All of a sudden, everyone is doing the exact same thing.
The reason I chose these two businesses is because of the sheer competition already in these two fields alone.
Not long ago, I was making a new LinkedIn account and discovered that there are almost 10 million people in the world who are in the marketing and advertising space.
On top of this, I was speaking to a startup founder a few days ago.
He had told me that in the tech industry, there are over 500,000 tech companies sharing a somewhat large market.
When an entrepreneur has too little choice, there will be almost no way to differentiate themselves from the competition.
They'll find themselves starting a business and competing with clones of that business they're running.
I've mentioned the importance of business competition before in this article here.
In general, we're told that a successful startup should be at least 10X better than all the market alternatives.
I believe that this is unnecessary, all that's needed is a unique or somewhat small difference that is beneficial to customers, clients, and users.
Realistically, there will be a lot of opportunities wherever we look for the 10X improvements.
However, finding them will be a lot harder than it was when Jeff Bezos decided to sell books online in 1994.
So now we've covered a reason or two why lack of choice is bad - surely it's good if we're able to have lots of choices, right?
The simple answer is no. And here's why.
The problem with too much choice
For an entrepreneur, too much choice is one of the last things we would want.
Let's go back all the way to my first business venture.
Starting the e-commerce dropshipping store, I had too much choice of products to choose from.
All we need to do is go through Alibaba and we'll find millions or even tens of millions of products that we can choose to sell.
Luckily for me, I chose a product quickly, but only because I didn't want to go through all the time and effort to find the right product.
Looking back now, I chose a really good product to sell - I just didn't execute well enough.
After finding our product, we have a choice between hundreds or even thousands of different suppliers pushing out the same exact product.
There is no differentiation between the way the product looks, the material of it, the quality, colours and so on.
They're all just carbon copies of each other, where the price is the only differentiating factor between the bunch.
Even when I was learning the forex markets, there was so much choice which could be overwhelming for people who are new to the markets.
To start off, there are so many different pairs (two currencies we can interchange/trade) to trade that it can be a nightmare to find one to stick to.
If we trade one pair which starts to score us a series of losses, we may immediately decide to switch to another pair, blaming the previous one for our losses.
This only makes it worse because a new pair also means new patterns and trends that are more prominent with that pair alone.
On top of the amount of tradable pairs available, there are also heaps of tools we can use to our 'advantage,' eventually making our charts look like this:
So how do we combat too much choice?
Till next time,