One Thing: Diversification

Weekly Reflections for Lasting Success

When I was younger, I thought focus was everything—zeroing in on one opportunity, one idea, or one investment. And while focus is important, I’ve learned that putting all your eggs in one basket is a risky way to play the game. Whether in business, investing, or life, diversification isn’t just a safeguard—it’s a strategy for growth, resilience, and long-term success.

My early lessons in diversification shaped how I’ve approached building TAB. Writing nearly ￡600m of loans, I’ve realised that writing many more, smaller loans means that no one loan can cause a huge problem or loss. Having a more diverse portfolio of loans is harder to source and maintain, but it undoubtedly carries less risk to the business as well as our funders. As well as allowing investors to diversify in loans—something my previous business did very well—with TAB, I wanted to go further. I wanted investors to have the ability to invest in direct property ownership deals too, meaning more diversification for them and more products for TAB. This experience has taught me that diversification is not just about spreading risk but also about creating stability and opportunity in unexpected ways.

Diversification is about more than spreading risk; it’s about opening up opportunities. You hedge against downturns in one area while giving yourself exposure to new ones. Think of it like a portfolio of skills, connections, or investments—each piece working together to balance the whole.

The Power of Diversification in Real Estate

Traditionally, diversification in real estate has been limited. You buy one property, then another, and maybe a third if you’re lucky enough to scale. But these investments tend to be concentrated in a single location, property type, or strategy. The barriers to diversifying—upfront costs, management headaches, and market access—are immense.

This gap is exactly why I created TAB Property. Through fractional ownership, investors can now spread their money across different property types, regions, and markets without the usual headaches of direct ownership. Unlike traditional real estate investments, which often require significant capital and direct involvement, TAB Property simplifies the process, offering a more accessible and hands-off way to diversify effectively. No upfront or abortive costs. No tenant worries. No rising debt costs.

With TAB Property, you can invest ￡10k in 10 different properties—a level of diversification that simply hasn’t existed before. By spreading your investments across diverse options, such as residential and commercial properties, or locations like London and Birmingham, you mitigate risk. When one asset performs well and another unexpectedly doesn’t, your entire portfolio doesn’t suffer.

The same principle works for loans in general: putting all your eggs in one basket may provide a greater return if all goes well. However, if that one deal suffers, the loss can be substantial. Balancing funds across multiple transactions ensures a steady flow of income, less disruption if something goes wrong, and typically a smoother—though not always lower—return.

The same idea applies to share portfolios. Even if you love one stock or sector, it often makes sense to invest in a host of companies rather than just backing one firm. For example, if you love AI and want to ride the market, you could look at several firms in the space rather than just one. Most people have a portfolio of stocks and shares rather than relying on a single investment. While I’m not giving advice, this is something I’ve observed and learned over time.

Beyond Real Estate: Diversification in Personal Life

Diversification isn’t just about investments; it’s a mindset. In personal life, diversification can unlock opportunities and create resilience in unexpected ways:

• Skills Development: Learning complementary skills like coding for a marketing professional or public speaking for a technical expert can unlock new career paths. This helps adapt to market changes, boosts employability, and builds confidence.
• Income Streams: Starting a side hustle or freelance work alongside a primary job reduces dependency on a single income and provides a creative outlet.
• Investments: Spreading funds across equities, bonds, real estate, and alternative assets like crypto or collectibles protects against economic downturns in any single sector.
• Hobbies and Passions: Balancing physically engaging activities like sports with creative pursuits like painting or writing encourages mental and physical well-being while broadening social networks.

Diversification in Business: Revolutionary Examples

Businesses that embraced diversification often saw revolutionary effects:

• Amazon: Started as an online bookstore but diversified into electronics, cloud computing (AWS), and entertainment (Prime Video). AWS became its most profitable division, transforming it into a tech powerhouse.
• Tesla: Expanded from electric cars to energy solutions like solar panels and battery storage, positioning itself as a leader in renewable energy innovation.
• Disney: Acquired Marvel, Lucasfilm, and Pixar, expanding its dominance in entertainment and unlocking revenue through franchises and streaming services.
• Netflix: Transitioned from DVD rentals to streaming and later into original content production, disrupting traditional TV networks and creating a new industry standard.
• Apple: Diversified from hardware (iPhones and Macs) into services like iCloud, Apple Music, and Apple Pay, which now provide significant revenue stability beyond product cycles.

When Diversification Isn’t Necessary

Sometimes, focus is better than diversification, especially when:

• A company or individual has clear market leadership or unique expertise.
• The risks of stretching resources outweigh potential gains.
• The existing product or skill has substantial room for growth.

Example: Coca-Cola has diversified into various beverage brands but maintains its core focus on soft drinks, preserving its strong brand identity.

Important Disclaimer

This newsletter is based on my personal experiences and reflections. It is not financial advice. Always seek professional guidance for your investments.

Takeaways for You

• What are the adjacent skills, products, or markets that can build resilience and growth?
• How can I balance focus and diversification for long-term success?

At TAB, we believe diversification is no longer just a nice-to-have—it’s essential. Whether you’re just starting out or managing a portfolio, it’s time to think differently about how you spread your bets and hedge your risks.

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