Serious Biz Question: Big Fish / Little Fish?

[ThrobX]

Tough question to answer, because there are so many more variables. In general, I'd rather be a small fish in a big pond, for three reasons:

A] greater growth potential;

B] smaller operations have an easier time quickly shifting gears and exploiting new opportunities that present themselves; and

C] small fish tend to have a larger number of big fish who can buy them out (if you're a "build and flip" kind of person).

But it really depends on how big the "pond" is, how many other small fish and big fish there are, etc. If you're a big fish in a very small pond, it's easy to dominate today, but where can you go tomorrow? You may have low growth potential, as well as few who could buy you out. Once you eat all the small fish, you have no more food and you starve a slow death. If I were in a small pond, maybe I'd want to be a medium fish.

I guess maybe the best business for a big fish in a small pond is to sell fish food, so you eat at wholesale and sustain all the small fish?

[Dravyk]

Originally Posted by ThrobX

C] small fish tend to have a larger number of big fish who can buy them out (if you're a "build and flip" kind of person).

But it really depends on how big the "pond" is, how many other small fish and big fish there are, etc. If you're a big fish in a very small pond, it's easy to dominate today, but where can you go tomorrow? You may have low growth potential, as well as few who could buy you out. Once you eat all the small fish, you have no more food and you starve a slow death. If I were in a small pond, maybe I'd want to be a medium fish.

I guess maybe the best business for a big fish in a small pond is to sell fish food, so you eat at wholesale and sustain all the small fish?

You're right that there are a lot of variables and that the question was purposely phrased to be simple (because how could you do a poll with a hundred variables?)

That said ... I'm for the big fish in the small pond for a variety of reasons.

To this: "small fish tend to have a larger number of big fish who can buy them out" and this: "Once you eat all the small fish, you have no more food and you starve a slow death." I say no. A big fish can be bought out from a bigger fish in a bigger pond.

Also to this: "Once you eat all the small fish, you have no more food and you starve a slow death." I'd have to reply. No, you don't starve a slow death, o contraire; you now have a monopoly!

[ThrobX]

Originally Posted by Dravyk

To this: "small fish tend to have a larger number of big fish who can buy them out" and this: "Once you eat all the small fish, you have no more food and you starve a slow death." I say no. A big fish can be bought out from a bigger fish in a bigger pond.

Ah, so we're jumping ponds now, eh? That's the bigger hidden secret.

Originally Posted by Dravyk

Also to this: "Once you eat all the small fish, you have no more food and you starve a slow death." I'd have to reply. No, you don't starve a slow death, o contraire; you now have a monopoly!

Point well taken, I didn't phrase it right. I was trying to make a point about limited growth. Monopolies can be cool... unless the pond wasn't that big to begin with. It all depends on the niche, yet another variable like I mentioned.