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. His columns are a regular part of WRAL TechWire’s Startup Monday package.
RESEARCH TRIANGLE PARK – Have you asked yourself why you started your company?
And don’t repeat the same stock answer that you’d give your investors, your board, your significant other or your friends.
Really think about it. Why are you doing this?
Is it the money? Maybe, but probably not, because there are better and easier ways to make money than building a company from the ground up. I’m guessing it’s almost definitely for other reasons, reasons that have more to do with who you are as a person and what you want out of life.
So why does everything in a startup revolve around money? Why are the three most important metrics in any business always revenue, profit, and margins?
The answer to all these questions is because a sustainable startup isn’t a successful startup. If your startup is surviving, it’s actually slowly dying.
Every entrepreneur has a mission
I hate corporate mission statements, and with good reason. It’s because well over 90 percent of the corporate mission statements I see are just word salad tossed into a marketing tool.
At some point, almost every business decides that their mission statement is some kind of homework assignment that they have to reshape to look like everyone else’s. It’s the same kind of groupthink that entrepreneurs push back against.
Every entrepreneur has a mission: to solve a problem, to invent something groundbreaking, to change the status quo, to make the world a better place, whatever it may be.
Thus, every startup is built off that entrepreneur’s mission, at least for a little while, and that mission should always take priority over business. Business goals will get your startup to short-term success. Mission goals will get your startup to long-term success.
When sustainable hits a ceiling
I learned that sustainability has its limits when I ran my own technical and product consulting firm for several years. We were better than everyone else — way better — and running the firm also happened to be a perfect way for me to live my mission: invent solutions, solve problems, change the status quo, all of it.
I got my firm to $1 million in annual revenue really quickly, and that’s when I realized I had hit my ceiling. Not in terms of money, but in terms of company growth, professional growth, and personal satisfaction.
My mission was on point — helping companies get from idea to reality. The business was the issue because the limitations that would be placed on me in order to grow the business were unavoidable. Building a consulting business was low-risk, low-reward, almost easy work after a while. I could continue to eke out a decent living, a lifestyle that I was more than happy with, but I would continue to suffer all the headaches that came with this small business, while the mission just sort of sat there, unprovoked.
I realized that as long as I was building a consulting firm, my mission would be about building that firm, and I’d be pushed further and further away from turning ideas into reality. That day, the day we topped $1 million with plenty of year left to go, that was the day I realized I was an entrepreneur stuck running a small business.
I see this over and over with small, young startups who get comfortable realizing revenues that they’d never come face-to-face with on a personal basis. Who wouldn’t want to generate a million dollars a year, every year, for the rest of their lives?
I’m totally serious, sign me up.
Except it’s not as sustainable as it seems.
When you’re not investing in the mission, you’re settling into the business
It’s the same myth that leads a lot of charities and non-profits to slowly sink into a money pit of bureaucracy and red tape. It’s not because the organization started thinking big, it’s because they stopped thinking big — they stopped investing in the mission and instead settled into growing the business.
You can be forgiven for sliding from mission into morass in the name of charity. You won’t be forgiven when you do it in the name of a startup. You’ll just get passed by, stagnate, and eventually close your doors.
So yeah, a million dollars is a lot of money — to you, to me, to everyone. But when you’re an entrepreneur, it’s just a marker and a metric for the mission. It doesn’t matter what that mission is, as long as it’s honest.
I looked at the million dollars on my consulting firm’s books, and figured I’d forecast doubling it the following year. Then I looked at what would be required of me to get there and said to myself: “This is not what I want to be doing.”
How the mission makes the money that fuels the mission
I learned this lesson when I wound down the consulting firm into a company that eventually became Teaching Startup. I did this by stripping away all of the traditional business elements — the consulting, the handholding, the invoicing, and all the hands-on stuff — and started distilling value that was directly related to the mission.
Once I did this, I was left with a model that retained a good chunk of the value the firm brought to the table for a tiny bit of the cost. That meant it was scalable. It wasn’t going to look anything like the business I had run for a couple years, and I had no idea how to sell it or even grow it, but I knew what I shouldn’t do: Turn it back into a small business.
Scale and growth are everything to an entrepreneur. It’s not even about the money, it’s about building. Builders are never satisfied with a single set of Legos, they want all the Legos so they can keep building and growing.
Legos, as any parent will tell you, cost a shedload of money. Employees, benefit plans, sales calls, laptops — those all cost a shedload of money too.
You can’t get to scale without risk, and you can’t mitigate risk with confidence if you’re not building for something other than revenue. If your mission is solving problems, then solve problems better than anyone else and the money will come. That equation never fails — it’s been time-tested.
Why entrepreneurs abandon the mission for the money
Once the money comes from the mission, it’s hard to keep that equation at a point of purity. As entrepreneurs, we get into a money rut, and we start leaning away from the risky mission and chasing the more comfortable “positive business outcome.” We do this because it’s only after we’ve had some success that the fear of failure becomes palpable.
Ironically, if you’re not constantly searching for the purity of the mission-to-money equation, you’ll get left behind when what you do becomes a small feature of what someone else does. This will happen no matter what your annual revenue tops out at.
When the mission is top priority, fear doesn’t factor into decisions. And when you’re focused on scale, you’re focused on freedom.
If you want money, work for the money. You’ll have a successful small business and a nice lifestyle. If you want freedom, you have to take on risk, and risk brings fear. So if you’re afraid: good, you’re in the game.
Now stay on mission so you can factor that fear out of your next decision.
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