Stage-Adaptive Portfolio of Bets
Concentrate scarce resources early and diversify only when growth becomes stable.
- Difficulty
- Advanced
- Time to result
- ~ongoing to results
- Steps
- 5
- Confidence
- 97%
Allocate growth resources according to company stage and current evidence rather than applying a fixed percentage rule. A stable later-stage business may sustain a diversified portfolio such as core, adjacent, and moonshot investments. An early- or mid-stage team usually lacks enough people to fund every bucket meaningfully. If a new growth mechanism begins working, concentrate scarce resources on incremental optimization and add backfill later to restore exploration. If no channel is working, concentrate on larger bets capable of igniting growth. Even after finding a dependable engine, retain some risky exploration as a hedge because channels can deteriorate suddenly or require deeper iterations before their potential becomes clear.
Origin
Brian Balfour challenged conventional portfolio-allocation rules during a Marketing Against The Grain discussion of marketing bets.
Core principles
- 01Diversified allocation is a luxury enabled by resources and stable growth.
- 02Early-stage teams often need to operate at one strategic extreme.
- 03Validated opportunities may justify concentrated incremental optimization.
- 04A lack of working channels may justify concentration on large new bets.
- 05Every stable channel still needs risky hedges against deterioration.
How to run it
- 1
Diagnose the current state
Determine whether the company has a stable growth engine, an emerging winner, or no meaningful signal.
Pro tip Use actual channel behavior rather than stage labels alone.
Watch out Do not call a weak, temporary result a stable engine.
- 2
Choose the appropriate extreme
Go deep on optimization when a channel is working, or on larger experiments when no engine exists.
Pro tip Make the concentration explicit so teams know what is temporarily deprioritized.
Watch out Thin diversification can leave every initiative underpowered.
- 3
Exploit validated momentum
When a bet validates, assign enough people and resources to develop its incremental layers.
Pro tip Document the signal that justified concentration.
Watch out Do not assume the first implementation captures the opportunity’s full value.
- 4
Build rebalancing capacity
Hire or reassign backfill as the company gains stability and resources.
Pro tip Restore exploration before the core channel becomes fragile.
Watch out Permanent concentration creates dependency risk.
- 5
Maintain a hedge
Keep testing risky alternatives because established channels can stop working or lose efficiency.
Pro tip Define trigger conditions for shifting resources when core performance changes.
Watch out Past success does not make a channel permanent.
In the wild
A small startup discovers that partner webinars consistently generate qualified customers. Rather than maintaining a cosmetic 70/20/10 allocation across ten initiatives, it focuses most of the team on improving the working mechanism and plans a later hire to restart exploration.
→ Scarce resources deepen a validated opportunity without pretending the portfolio is already mature.
Another startup has only minor gains from incremental conversion tests and no repeatable acquisition engine. It pauses low-impact optimization and funds two substantial distribution experiments with enough resources to produce credible evidence.
→ The company creates a chance of discovering a real growth engine.
Common mistakes
Copying a 70/20/10 rule
A small team may nominally diversify while giving no bet enough resources to succeed.
Optimizing without a fire
Incremental improvements cannot compound meaningfully when no underlying growth mechanism works.
Abandoning all exploration
A current winner can deteriorate unexpectedly, leaving the company without a replacement.
Is it for you?
Best for
Early- and mid-stage companies deciding between optimization and exploratory growth bets.
Not ideal for
Later-stage organizations with abundant resources and a mandate to maintain a deliberately diversified portfolio.
From the transcript
“the whole concept of a portfolio of bets is a bit of a luxury of later stage companies that are on a more stable growth…”
“you typically find yourself more in situations where you've got to be on one end of the extreme or the other.”
“you always have to have some risky things as a hedge because you never know when that core thing you depend on is going to…”
From the episode
Brian Balfour Reveals How To Build An A+ Marketing Team From Scratch (#183)
Brian Balfour