Editor’s note: Joe Procopio is the Chief Product Officer at Get Spiffy and the founder of teachingstartup.com. Joe has a long entrepreneurial history in the Triangle that includes Automated Insights, ExitEvent, and Intrepid Media. He writes a column about growing entrepreneurial companies exclusively for WRAL TechWire. The columns are published on Tuesdays.
RESEARCH TRIANGLE PARK – Let me ask you a question that needs an honest answer. Do you want to be rich? Because your answer might dictate what kind of startup you’re building.
I’ve been in startup for over 20 years, and about 15 years ago, I quit caring about money. Now, there are a lot of ways to misinterpret that declaration, so let me knock out a couple of those right away.
- I don’t have enough money to not have to worry about money.
- I’m not talking about taking a vow of poverty.
- I believe money is the only metric that counts in business, as I’ve often said in these posts.
But if you’re in business to chase money, you’re just increasing your odds of failure. By a lot. I’ve seen it happen time and time again, and every single entrepreneur in my peer group who has been through at least one successful exit will agree.
So how do you get to success in business without chasing money?
I know. It sounds like a Catch-22. There’s a lot to unpack here. But it starts with some necessary changes in mindset.
The Myth of Having Enough Money
I get as frustrated as you when I hear people with a ton of money start talking about the pleasure of simple things, or worse, when they start admonishing others for chasing money. But the inescapable truth is that at the most foundational level, they’re right.
All those cautionary tales about the downside of money are 100% absolutely on point. No one ever has enough money to not have to worry about money. Ever.
This is the first necessary change in mindset.
One of my friends who used to run a corporation he took from startup into the billions of dollars likes to tell the story about how he attended a retreat with a bunch of blindingly successful business folks when he had just entered that stratosphere. They all sat around the table one night and opened up about their personal challenges. To a person, all of them talked about what they could do with their lives if they only had just a little bit more money.
So how much is enough? It’s a question we’ve all asked ourselves. The problem is the answer is complex. It’s not zero, no matter what that one hippie friend tells you. It’s nowhere near what your financial advisor is going to tell you, no matter how many algorithms they’re using to fund your golden years. It depends on a hundred different factors, most of them ethical, all of them personal.
I would never try to answer that question for you. Just ask yourself if you want to be one of those bozos sitting around a cabin in the woods talking about how having millions and millions of dollars isn’t making you happy.
For me, it comes down to this: I want to have just the right amount of money to not make bad choices. And to be 100% transparent, I’m still not sure my philosophy is right.
It’s Personal, and It’s Business
Now let’s swing the pendulum the other way. I’m not Brother Teresa. I understand the value of money, probably more than most people, and I know what life is like when you don’t have it.
I’m not trying to tell you how to live your life or how much money you should accumulate. In fact, I’m the last person to do that. I like to take the personal out of business.
Which is really hard to do.
So the second change in mindset is to stop thinking about money as motivation, and start thinking about it as a scoring system. To do that, you still have to separate personal from business entirely.
Luckily, in this one instance, that’s much easier to do.
I don’t think I have to sway you too hard on the notion that if money is your primary personal motivator then you’re going to make bad choices in your personal life.
To illustrate that point: Another friend of mine left his job a year ago because the stress nearly killed him. He lucked into a much better job at nearly the same pay. Not long ago, his old employer asked him to come back at essentially double his old salary.
What good is the money if you’re not around to enjoy it?
I also believe I don’t need to sway you on the notion that money as a primary business motivator is going to lead you to make some horrible business choices. And I’m not just talking about the weight of your conscience, I mean making short-term decisions that will enhance the bottom line but are ultimately disastrous to the business.
We all need to be hungry to succeed. But if you or someone you hire or work with is someone whose “hunger” translates to cash, you’re going to get burned. Every single time.
Money as a Scoring System
I’ve said it a million times: Revenue is the only metric that matters in business. That’s not to say that other metrics don’t matter in and of themselves, but if you can’t balance the metric against revenue, the measurement is meaningless.
You can disagree. I’m totally cool with that. You can give your product away for free and I will be the first one to applaud you. But your business won’t survive.
Now, there’s a huge business difference between money as a motivator and money as a scoring system. I’ll explain that difference.
In business, my motivation is rooted in the growth and continued success of my company. This depends on the continued success of my customers, the continued success of my employees, and in a much smaller sense the continued success of my partners, suppliers, and even my community.
Revenue is the scorecard by which my customers give me a vote of confidence. Revenue against costs means my business is scalable. Revenue against salaries means my business is efficient. Salary against productivity means my people are working. Costs against quality means my partners and suppliers are the right ones. Profit against outreach means I’m doing what’s right for my community. All the equations are up to me and all of it is within my control.
Furthermore, all those people can have their own motivations and I can be agnostic to them. That means I won’t go crazy trying to make everyone happy at an individual level.
Do What You Love and _______ Will Follow
The final change to the mindset is to replace money as a motivator with something else.
On the business side, this is about creating a mission-driven company. Again, it’s using revenue as a scoring system to determine whether or not you’re hitting the goals that make your business worth running. It means the mission comes first, for every decision, and money is relegated to simple proof that the mission will succeed. Or not.
This is not a new concept. Amazon does this. Google does this. Apple does this. Is it harder to do once a company reaches a blinding level of success? Indescribably so.
But on a personal motivational level, it’s always easy. Always.
“Do what you love and the money will follow.”
Luckily, that saying is almost right, you just have to replace “money” with whatever it is you truly want out of life. And even better, it doesn’t have to be a single word, it can be a long, rambling sentence if that’s what you want.
Do you want to be rich? Define rich. And if you can take money completely out of the top spot, then you’ll get there. Guaranteed.
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