“People overvalue optionality. It’s one thing I learned in chess. You just need to have one good option, instead of going for Option A or B or C or D.” - Peter Thiel
There’s a peculiar tradeoff we all must constantly make between keeping our options open and focusing very hard on one thing. From our earliest days in school we are told to make decisions that don’t close any doors, and this sentiment generally sticks with people for a long time.
America’s education system promotes liberal arts degrees for a huge part of the population, keeping us like generic stem cells until we are 22. Our international counterparts tend to begin differentiating at 18 when they graduate high school. Professionally, the country’s top students seem to have an insatiable demand for banking and consulting jobs, which are valuable in large part because of the opportunities they lead to (industry, private equity, business school).
The urge to not close any doors and keep one’s options open for as long as possible - to diversify - is understandable. If you give yourself lots of chances to succeed, you’ll be more likely to succeed, right?
At first blush this makes sense, but I think there is good reason to avoid taking this approach.
First is the superstar effect, which says there are huge gains to be had as you approach the top of a field. In a highly differentiated world, it’s more valuable to have deep expertise in one or two areas than general proficiency in five or six.
Second is the counterintuitive truth that the best way to open lots of doors is to do one thing really well. The most successful people in the world have such strong operating leverage that they are able to get meaningfully involved in any endeavor they choose. They almost all got there by being extremely focused and good at one thing.
Naturally, the way I most often think about this tradeoff is with startups. When building a company, founders have a choice about how to handle the tradeoff between focus and optionality. Normally, the best startups look for one very good option and then find ways to make that happen. It’s surprising how often I hear founders say they aren’t sure what their business will look like yet, but they have lots of great options so something will probably work out.
Remember that on some level you can only do one thing at a time; it’s better to get offers from your first choice job or school than your second through fifth choices. It’s also normally better to be in the 99th percentile in one thing than the 90th percentile in two or the 80th percentile in three.
If there are free options you can layer into your life without losing focus you should take them; I’m not saying you should intentionally pigeonhole yourself. Instead, I’m trying to be a tugging force toward focus since I think people typically overvalue optionality and end up on the wrong side of the optimal balance.