Over the months since Choose Energy’s acquisition by Red Ventures, I’ve spent a great deal of time thinking about what worked and what didn’t over the life of the company as we moved toward a successful exit. There’s no shortage of important lessons to be gleaned from my experience as part of that team, and I’m sure they’ll continue to emerge over the months and years to follow — I’m fortunate to have mentors and friends that continue to expand my perspective. But one particular lesson has jumped out at me over the last few weeks: the marginal difference between good and great (or the absolute best) is enormous.
As you’ve probably heard Nassim Nicholas Taleb and others discuss, the “80/20 rule” often has an extremely fat head. In other words, in many instances, it’s often a “50/1 rule,” or perhaps an even more extreme distribution. 50% of the total value is created by 1% of the people, decisions, companies, etc. So while the 85th percentile may be good, and the 95% percentile may be quite a bit better… the top 1% of ideas, talent, processes and decisions ultimately are often an order of magnitude better. At least.
It’s very easy to merely “satisfy” a business need. The best tools, talent, processes often seem to consume 10, 20 or even 30% more resources or time than something that on the surface looks like it’s almost as good. But, in my experience that’s commonly a trap. The world’s best companies or art are several orders of magnitude more valuable than those that are simply good, and that’s true of people and decisions as well. Look at the profits of the original iPhone vs. it’s contemporaries to get a sample of the difference between good and great.
Whether it’s hiring a VP of business development or deciding whether to have the tasting menu at that fancy restaurant rather than just ordering a la carte, the quality of outcome or experience derived by really swinging for the fences when possible seems to often outweigh incremental costs, whether financial or otherwise. As a principle, I think it can be applied quite broadly. It’s worth saying that more difficult / expensive / complicated / whatever isn’t always worth the time and effort. Resources are always limited, so you need allocate them in the best possible way. It is often noted that perfect is the enemy of good… and it can certainly be the enemy of done, depending on the context. I admit that this is an area where I continue to struggle — understanding when it’s ok to sign off because it’s done rather than perfect. But while accepting good enough is sometimes (maybe even usually) the right answer, I’ve also seen up close that finding the areas where a 10X difference will have the highest leverage for your company or personal goals, and then doing whatever it takes to get the absolute best in those areas, often has huge marginal return. You just have to know where to look.
This is all to say that my wife and I won’t be ordering any California rolls the next time we go out to a great sushi restaurant… we’ll go for the full omakase experience.