Mission, Inc.

Startups with the biggest missions often create the biggest businesses. As Marc Andreessen (@pmarca) wrote in his post, the big winners in technology are mission-driven companies.

I thought more about why that’s the case. Of the four investment tenants at GSV (People, Product, Potential, Predictability), People is the most important. Having a great team determines the outcome between winning and losing.

Having an important mission is the best way to attract a great team when the normal incentive structure breaks down, as it inevitably does during the lifetime of every startup.

If there is one thing I learned in four years studying Economics, it’s that people respond to incentives. Incentives can come in many forms including money, benefits, work atmosphere, etc.

During some if not most part of a startup’s life, the company won’t be able to match other established companies in providing incentives EXCEPT for the company’s mission. Your startup won’t be able to pay more than Google, the chiefs at Facebook will be better, ABC company can give out more stock options than you can, etc. And that’s when things are still going well.

Inevitably, in every startup, there comes a period where some things don’t work the way you want it to. There comes a time when your startup hits what Ben Horowitz (@bhorowitz) calls The Struggle. The Struggle is when too many things aren’t going your way. When The Struggle comes, the standard incentives (pay, perks) fades away, but if the mission is intact, it gives you a fighting chance to make it.

Having a strong mission is one of the few longer term incentives when all the short term incentives fail.

Entrepreneurship: jumping out of a plane and building the parachute on the way down.

One of our startups in the GSV portfolio has not lost a single senior engineer to competitors in the past four years and they have certainly gone through their share of The Struggle. That’s a monumental achievement in a hyper-competitive Silicon Valley. They’ve done this primarily through their strong sense of mission and working together on a differentiated product with a team that shares extreme enthusiasm to make an impact on an industry and the world.

Having a strong mission and working on an important problem is the protective / competitive moat. When all other incentives fail as they inevitably do at some point in the life of every startup, a strong mission keeps the team energized and ultimately helps a startup grow and win.

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I would love to hear from you @gsvpioneers.