To succeed at innovation, you need to be making a lot of little bets. What are little bets? According to Peter Sims in his excellent book called Little Bets, they are:

A small, affordable action that anyone can take to discover and develop ideas.

Here is a more complete explanation in an interview with Andrew Keen:

When I was in Silicon Valley a couple of weeks ago, there was a huge buzz going around about the book, and I was fortunate enough to hear Peter talk about it at a TEDxBayArea event. Interestingly, two different people who had read the book used almost identical words to describe it – they both said something like: “If you’ve been reading the research there isn’t anything new here, but he pulls it together really well.”

That doesn’t sound like the highest of praise, but it actually illustrates one of the main points of the book perfectly: that ground-breaking ideas don’t always look ground-breaking when they launch, instead, they tend to build up out of a series of experiments. Sims has done a great job of connecting up a bunch of ideas that were already out there in a novel way, and building an important new idea out of them. This is the essence of innovation.

He includes a great quote from Steve Jobs that explains the importance of connecting up ideas:

Creativity is just connecting things. When you ask creative people how the did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had an synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people… Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem.

There are several key actions that you can take based on reading this book that will make more innovative, including:

• Focus on what you can afford to lose, rather than what you might gain: This is similar to my suggestion that you do as much as you can get away with. The critical point of little bets is that they are little – so if they don’t work, you don’t lose too much. Don’t try to figure out the net present value of a potential idea based on growth projections in which no one can ever have any confidence. Just find a way to test your idea as quickly and cheaply as possible. This is central to any little bets approach.
• Build as much diversity into your personal network as possible: the best way to make these creative, novel connections between ideas is to have a diversity of experience, and to encounter a diversity of ideas. One great way to accomplish both is to consciously build links with people that don’t think in the same way that you do. Tom Peters sums this up perfectly: Hang out with the freaks. Peters has been making this recommendation for a long time – find the people that are outsiders, that don’t fit, and spend time talking to them. It’s the easiest way to start making novel connections between ideas.
• Don’t expect to have a great big idea come to you in perfect form: the reason that Sims marshalls all of the evidence that he has is to show us that big ideas don’t spring fully-formed from peoples’ minds. Instead, they build over time. As Linus Pauling said, the best way to have a great idea is to have a lot of ideas. The belief that we have to have a great idea in order to start something is a myth, and one of the main ones that Sims is trying to dispel. If you won’t start until you have a great idea, you won’t start. Instead, it is better to execute an idea, any idea, figure out what works, and build from there (he expands on this idea in an excellent interview with Nilofer Merchant).

It’s no coincidence that John and I have used the word “experiment” in 103 different posts on this blog. We keep talking about it because it works, and anyone can do it. To innovate, you need to figure out how much you can get away with (how much can you afford to lose?), figure out how to test an idea within the scope that provides you, learn from your experiment, and build on it.

That’s a little bet.

That’s innovation.

If you want to learn more about the book, here is Sims’ talk as part of the Authors @Google series: