Sub-Ventures (Part I): Execution Risks

Lower your people count in a new venture and you’ll lower your execution risks.

Here’s the theory at its most basic.  The fewer people involved in the project, the lower the initial execution risk.  Yesterday was 09/09/09, so let’s use nines to discover execution risks.  If there is one founder of a sub-venture, and that founder operates at .9, or 90% efficacy, then the chance of that founder succeeding in the tasks set before him/her is 90%.  When we add another person at 90% efficacy, we lower the chances of success to 81%, or .9 times .9.  As we get more and more people involved, the chances of all tasks being completed goes down precipitously.

Is this proven in practice? I have no idea! Of course, there are chances of everyone operating at 100%…or even “giving it 110%” in some dreamland where coding software in the middle of the night changes the realities of mathematics.

The trick is to get the work done with the fewest number of people, and that’s where the magic of the internet comes into play.  It used to be that a huge team would have to work night and day to create an online venture that had a complete web site and content management system.  Now, there are open source tools such as Drupal, that are free and dependable for creating massively scalable social networks and sites without even having an engineer on staff.  If you want to go even easier than that, you could try Ning, where you just add the content and start driving the traffic.

For my next venture, Rebound Dating, I paid just $29 per month for the software I’m currently using, and I’ll upgrade soon to a package that is much more robust for just $1,000.  Building software like that 10 years ago would have cost at least $20,000.  And it works!

For other parts of the business, there are also very easy ways (no brainers really) for getting up and running.  Need traffic? Go to Google Adwords, set up an account, and you’ve got traffic flowing to your site within hours.  No creative staff or advertising agency needed.

Need to monetize that traffic? Google’s got your back on that one, too, with Google Adsense.  Other ad networks are available, and there are affiliate programs and other ways to monetize content, as well.  That eliminates the need for a sales staff who may or may not be able to convince advertisers to spend money on your site.

If a young company can have just one or two people doing all the work, then the chances of your idea coming to fruition is significantly higher than it used to be.   My formula is this: figure out what you’re best at and make sure you’re spending the most time on that activity.  Outsource the rest.  Now, there’s a good chance your outsourced tasks are going to actually work and cost you next to nothing.  That’s one of the advantages of the sub-venture model.  We’ll move on to the next one soon!