Weekly Thoughts

A green hay field in Yarmouth, Maine.

Small Pond Syndrome

The Advantages of Being A Big Fish

It’s easy to throw shade at somebody who is a big fish in a small pond. We take issue with that since we learned early on there are many advantages to being a big fish in a small pond. We played national-level field hockey, something (relatively) easier to achieve in Canada than more popular sports like soccer or ice hockey. Apart from being a great experience, we parlayed that into educational opportunities via college sports. We got a lot of medals from cross-country ski races and ultra-marathons. It’s easy to get hardware when not many people show up to the races. It also looks great on a resume. This isn’t to diminish our accomplishments; we showed up and put in the work. But we could have worked just as hard to be a middling soccer player or a sub-par downhill ski racer. Looking back at it, a lot of our opportunities came from leveraging small pond successes.

We were reminded of this theme in a recent My First Million podcast, where host Shaan Puri discussed a high school experience playing basketball:

“In the Houston pond, I was nowhere near athletic enough to be [varsity]. But luckily….my dad gets a job in Beijing and we moved to China in the 10th grade. We go to China [and] the first day I start playing basketball, and these kids don’t get protein over there; everybody is scrawny; I’m blowing by everybody. The varsity coach walks over and he’s like ‘hey, what is your name?’. I end up being Captain of the varsity team, I got a girlfriend… my life changed for the better. Everything got better because I caught SPS. I got small pond syndrome..”

From a business perspective, the big corporate life probably never suited us because we hate bureaucracy. Plus, we also see ample opportunity in small ponds. In fact, one of our guiding business mental models is that of a bait and tackle shop — a quintessential small pond opportunity. While many of our peers are pursuing big-name venture capital or corporate pursuits and scoff at the size of our businesses, the whole point of Chenmark is to accumulate big fish in small ponds: third-tier metro area landscaping; niche tourism operators; specialty horticulture or food manufacturing. These businesses can achieve above-average returns not in spite of but because of their size. And while there may not be boundless growth opportunities in these businesses, our model allows for reinvestment of capital into new (small) ponds.

Apart from financial returns, it’s fun and incredibly rewarding to be the big fish in a small pond. We can have a true impact on our businesses and in our communities. Who wants to spend their time completing with a million super smart MBAs who have billions of dollars of funding? No thank you. As My First Million Co-Host Sam Parr said, “The Captain of a football team in rural Alabama with a hundred students, they live the life. Screw the big city, live that life…” Agreed.

Have a great week,

Your Chenmark Team

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