Your ambition dictates your scale
Here’s how to determine if you should “swing for the fences” or “play it safe”.
If you’re building a startup or have a keen interest in them, you can’t go a few days without reading about the “unicorns” that are transforming industries. “Uber valued at more than $50 billion” reads one article. “Airbnb valued at $10 billion” reads the next.
As the founder of a company, is building a “unicorn” (a company worth $1B or more) the right goal for you? And if you don’t want to build the next Uber or Airbnb, are you building a “lifestyle” business?
The media would have you believe it’s all or nothing. Black or white. You’re either aiming to knock it out of the park and make a billion dollars, or you want to build a small lifestyle business.
But success in business exists on a spectrum and is all relative.
For ever Uber there are 1,000 businesses you’ve never heard of making insane amounts of money. They don’t have PR firms. You won’t see their founders on magazine covers. And that’s just the way they like it.
The media would have you believe that “go big or go home” is the only way to build a successful company, especially if you’re in software or technology — we’re bombarded with stories of billion dollar companies every day.
But the clarifying question is this:
What does success mean for you?
If you start with the end in mind (or at least a rough idea of it), you can chart a course for your company that brings success on your terms.
You know what’s worse than failing? Spending years of your life building a company that’s successful based on other people’s definition of success and not your own. That’s the trap you can fall in to if you don’t define success up front and on your own terms.
The scary truth is that not every founder is cut out to build a billion-dollar business, not every idea has billion-dollar potential and not every team can stick it out long enough to capitalize on a billion-dollar opportunity.
There are really 6 things you need to consider when trying to determine what your definition of business success is.
- Market — how many people or businesses need your product and how many competitors do you have?
- Financial input — how much cash is required to start and grow your business over time?
- Financial outcome — do you want to replace your salary or sell your business for millions/billions of dollars?
- Lifestyle input — what level of personal sacrifice are you willing to make in order to grow your business?
- Lifestyle outcome — what do you want your life to be like when you achieve your definition of success?
- Risk tolerance — do you like to risk it all or are you more conservative?
Once you know what your definition of success is, you can then determine which trajectory your business needs to take — and the sacrafices you need to make — to get you there.
If you want to build the next Uber or Airbnb, you’d better be prepared to raise a heap of money, dedicate every single waking moment to your business for the next 5–7 years and be comfortable knowing your chance of success is about 1 in 1,000.
If that’s not appealing, then you might want to think about the alternate option — building a good, solid, (gasp) profitable business that grows slowly by reinvesting profits and continually improving your product.
Sure it might take a bit longer and you might never be featured on the cover of a magazine or be on any of those “Top 10” lists, but you’ll sacrifice less, enjoy the ride and have a better chance of achieving some sort of work/life balance after the first few years if that’s important to you.
Not every company can be (or should be) a unicorn. If you start with your own definition of success, then at least you know the risk-versus-reward ratio and can decide whether you’re willing to give it a shot or not.
Get my new book “SANE: How To Build Your Business Rapidly Without Going Insane” at http://www.dontgoinsane.com 📚