Small Markets Can't Feed Hungry Giants: How Size Warps Strategy
When a multinational electronics company entered the market for personal digital assistants (PDAs), its board demanded the venture hit nine-figure annual sales within three years. Expectations set by the success and size of the main business seemed natural. After all, only substantial new markets could keep stock prices and internal promotions on track.
But the PDA market was nascent, fragmented, and highly uncertain. No one, including industry analysts, could predict exactly what consumers wanted or how fast the category would grow. The company's R&D lab invested millions, but when actual sales trickled in—far below grand forecasts—the initiative was labeled a flop. Both resources and morale dwindled.
Meanwhile, several small startups, unburdened by outsized goals, slowly refined their prototypes, celebrated minor wins, and adjusted course. These tiny operations survived on modest sales—often just a few thousand units—and, crucially, gathered first-hand feedback. Over time, a few broke through when the market finally matured. The big company, having already abandoned the category, watched from the sidelines as disruptors grabbed the rewards.
Lessons in behavioral economics and business history reveal how “scale blindness” can make organizations discount high-potential opportunities simply because their short-term impact feels too small. Sometimes, the best way to grow is by planting a lot of seeds, not expecting any single one to deliver a full harvest overnight.
Take a hard look at your growth expectations—are they realistic for entirely new ideas, or are you comparing every opportunity to your organization's biggest wins? Don't be quick to kill off projects just because their early numbers don't dazzle. If you have a hunch about something with promise, carve out space for a small, focused team to try it on appropriate terms, instead of holding them to mature-business standards. Let them celebrate real learning and early adopters, not just big numbers. Sometimes, truly big things start small—if they're allowed the chance. Make this a regular check-in during planning cycles.
What You'll Achieve
You’ll shift to a mindset that values learning and patient scaling, leading to more experimental projects and a richer ecosystem of potential long-term growth. By managing expectations, you'll avoid discarding tomorrow’s winners just because they’re small today.
Refocus Growth Expectations for Small Bets
Quantify annual growth targets for your business/unit.
Write down the amount of new revenue or output required next year to meet goals. Notice if targets have ballooned with scale.
Identify projects too small to 'move the needle.'
List ideas that have been dismissed because their initial market or revenue seems trivial. Challenge the logic—how did similar products or markets start out historically?
Spin-off a small, dedicated team for a new idea.
Instead of loading the project with big-company expectations, assign it to a group with goals that match the new market's real size. Judge success by learning and growth, not raw dollars.
Reflection Questions
- Are my growth or performance targets crowding out promising new projects?
- How could I shelter or repackage a small idea so it gets a proper trial?
- Are we forgetting that giants grow from tiny beginnings?
- How can we set realistic goals for ideas in their infancy?
Personalization Tips
- A school district waits for a new teaching method to prove itself in giant city systems instead of piloting it in a single classroom.
- A tech giant ignores software plugins because none alone can justify a major division's profit requirement.
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