August 5th, 2020 | By: Wil Schroter
It's really hard to convince people that money isn't the most important metric of a startup's success. Especially if those people happen to be investors, in which case, it actually is the most important metric.
But what we're talking about, as always, is what's important to Founders, and by extension to the people that work within that startup.
The broken part of the startup narrative has become this — "If it's growing fast and making money, it's successful, no matter what other costs are incurred."
I'd like to just go crazy for a moment and offer a new narrative — "If it's making everyone's lives geometrically better, then it's successful, and hopefully that means it's making money."
I know, I know. What heresy! I must be some bark-eating, left-wing, neo-communist who thinks money is evil. Not at all. I'm capitalist AF. Ayn Rand is my spirit animal.
However, when we use money as the sole focal point, it makes it incredibly easy to compromise all of the other aspects of our lives and goals that we thought money would improve.
What we're missing is a central touchstone that reads — "Here is how our lives would be better, and this startup exists to enhance that. Some aspects may involve money, but if the pursuit of money comes at the greater cost of our health, happiness and sanity, we're actually moving in the wrong direction."
I've met very few startups or Founders who have even begun this conversation, much less committed to this path. But the real question is — why?
It actually helps if we start to dissect who is actually impacted by our success. What if we re-phrased the narrative to read "WHO is our company successful for?"
Is our startup successful for our employees? Probably not. Do they really care whether or not our gross margins are improving or we're lowering CAC? Or do they care that they haven't spent time with their kids in 6 months or taken time to enjoy, well, anything?
Is our startup successful for the Founders? Most often not. Most likely we're racked up in debt or buried in a cap table that we know we'll never see the right side of. Why does it feel like we answer to everyone else when the whole point was to answer to ourselves?
Is our startup successful for our health? Sure, we have unlimited snacks and unlimited vacation, but why is everyone getting so fat and looking so exhausted? Why are we releasing more cortisol than serotonin?
At some point, we really have to start asking ourselves — who is this all for? When we start to really take stock of what's happening, we start to realize that focusing on money is simply covering up how horribly we're abusing ourselves.
An incredible amount of our time and focus is around pursuing money because we fantasize about what it will buy us. (To be fair, for almost anyone who's ever made that money, it's almost always far less improvement than we think, but that's another post.)
But at some point, we also have to ask ourselves — "What does our pursuit of money COST us? If the cost of "making it" is our health, relationships, and important years we will never get back, what did that money buy us that makes up for that? Is that nicer house worth missing our kid's childhood or our 20s or 30s which by the way we only get once?
This isn't about taking money off the table entirely — it's about making it a factor, just not the only factor. Obviously we need to be viable as a business, but we're getting to the point where we've been to this "burn through the troops" movie so many times that at some point we have to stop signing up for it.
I'd encourage all of us to simply take a step back and say — "What's actually important to us as the people who work here, and what would this company need to achieve in order to improve our lives?" But don't stop there. More importantly, let's ask — "What are we unwilling to compromise in this pursuit?"
Real success if pursuing our goals without having to compromise our souls.
Let's Define Success By What We Don't Have To Do Anymore Why do we measure startup success by money? Is it the money we're truly talking about or the freedoms that money buys? If it's freedom, then how much of that freedom comes from money, and how much of it comes down to choice?
How Much Should I Be Working? (podcast) Wil and Ryan take a deep dive into the benefits of thinking quality and not quantity when it comes to your weekly punch card.
We Need a Strict Definition of Personal Success Every moment we spend pursuing an undefined goal is a complete waste of time — especially personal goals.
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.
Andy Dunn has spent the past ten years building Bonobos. He’s funded about 15 other ecommerce companies, advises even more, and serves on the board of three others. In this interview, he shares his thoughts on better fitting pants, 100M in capital, and why men should embrace a world run by women.