The one mistake founders make when setting a business strategy.
Pursue a business that will meet your ambitions, and the sacrifices it entails along the way.
This post marks the next phase of our three month series. We’re looking at putting choices into action; your vision, business model and target market.
Check out my earlier posts
a) how to build a business around your personality,
b) unlocking founder-product fit,
c) finding the time and money to start your business and
d) self-financing your startup.)
If entrepreneurship is a journey then think of this series as a metaphor for that journey.
Part one being akin to finding your hiking kit and putting your boots on (maybe having a few wobbles about whether or not you’re ready to go) and part two is now the journey itself. You’re looking down at your compass to figure out which direction to take and making key decisions about the journey itself. Part three from November — end of the year is on how to survive and thrive the course of the journey.
Image credit Natalia Chorna.
So buckle up and enjoy the ride.
If you are not subscribed yet what are you waiting for? Sign up for the journey on my Substack.
Today we talk clarifying your ‘why’ for your business, the actions you will and won’t take as a result of your personal and business goals and the challenges inherent in being the person who both sets the vision and executes on it at the same time.
Your personal goals precede the goals you set for your business
Business is personal.
At least, it is when you’ve poured a hell of a lot of yourself and your money into making it work.
So whilst we can read business books until our eyes bleed, ultimately there is no one-size-fits all advice. What’s right for you will be wrong for me and vice versa. All companies journey through different stages of development, though they often follow a rough pattern. To make your journey as fulfilling as possible, the stages that your business goes through should be mapped to reflect your personal life goals.
Many entrepreneurs have a strong bias for action; they simply want to get on with the business-building already. But, being heads-down in spreadsheets or on sales calls often means avoiding deep reflection of personal goals and how the business is a vehicle to achieve them.
The article “The Questions Every Entrepreneur Must Answer” from Harvard Business Review published in 1996 speaks to some of these key themes. Themes I’ve covered recently in more depth such as finding your product-founder fit and building the right business based on your strengths.
The author Amar Bhide is a professor in business and economics and he argues that it is only when entrepreneurs can say what they want personally from their businesses, can they make key decisions about how to build it. He says they must answer key questions: What kind of enterprise do I need to build? What risks and sacrifices does such an enterprise demand? Can I accept those risks and sacrifices?
Let’s say a business becomes too big, that may prevent the founder from enjoying their life or remaining personally involved in all aspects of the work — and if it is the love of the craft itself you want to do (more than the business operations) that would leave you unhappy.
He says:
“If they stop and think about it, most entrepreneurs can identify goals that are more specific. For example, they may want an outlet for artistic talent, a chance to experiment with new technology, a flexible lifestyle, the rush that comes from rapid growth, or the immortality of building an institution that embodies their deeply held values. Financially, some entrepreneurs are looking for quick profits, some want to generate a satisfactory cash flow, and others seek capital gains from building and selling a company.”
Bhide describes various trade-offs involved in running different kinds of businesses. For example, businesses that are significantly larger than the founder’s skills and contacts itself entail many risky long-term bets and continued investment. Whilst on the other hand, whilst a lifestyle business might represent a quicker route to profit, the business owner will struggle to step away or sell a business that is tied to their output.
Despite the article being over 20 years old, the concepts are still just as relevant today. In fact there are some stark warnings such as comments made about the CEO of Blockbuster preferring the nuts and bolts of business than working on long-term strategy!! (Note: Blockbuster could have bought Netflix in 2000 for $50 million).
So make sure that you know your WHY for this business of yours. What impact will it have on your life overall?
I share this exercise below with coaching clients to help them to figure out their career drivers and motivations; an axis upon which decisions and trade offs get made.
Most people have between 2–3 top drivers that are important. What are yours?
If you really want a life that brings you freedom, to travel, to not be tied to one employer or way of life, then having a purely digital business with minimal employees may suit you. Lifestyle entrepreneurs, bloggers, creators and indie hackers who create digital information products are a prime example of this.
Some recent work with a client, let’s call him Sam, started with him objectively analysing his life. He found himself feeling unfulfilled in his business.
The coaching began with Sam exploring alternatives that would grant him more freedom and he explored the solopreneur type of routes including content businesses and podcasting.
Except there was a problem.
Sam was a natural leader, and people trusted him to lead and care for them. He also loves solving big complex problems, running a range of business processes and has big financial goals for his future and family.
After reviewing his drivers above (his were security, leadership and service) the solo independent creator lifestyle seem less appealing. Sam didn’t want to sit on a laptop all day and constantly find new content. He wanted to run big businesses, sell them, and make waves in the industry.
The lack of fulfilment he felt wasn’t based on needing to change his entire lifestyle, but that he stopped learning and growing. He needed a new venture.
In just three months of coaching Sam hired a General Manager for his existing business so that he could move onto a new venture. He’s been successful in a franchise take over of a bigger business with big opportunities.
Once you have the answers to your personal goals you can create a solid strategy for your business that aligns and ensues you achieve what makes you feel successful on your terms, and not someone else’s.
Don’t get caught up in the hype of what others are pursuing until you’ve found what would make you actually feel fulfilled in the day to day. Build your business mission around your personal mission.
Your business’ mission will be as successful as the strategy you pursue
Once you have personal goals you can create a plan to achieve it, with goals and a plan to match it.
Strategy is a fancy word for your plan.
To quote Bhide again,
“The strategy must embody the entrepreneur’s vision of where the company is going instead of where it is”. The strategy is what provides a framework for decision making and policies. He says “A strategy that is so broadly stated that it permits a company to do anything is tantamount to no strategy at all.”
So what is strategy, again?
Strategy is as much about what you don’t do as what you do.
For example:
Costco is renowned for its low prices. The trade offs it makes as a result are clear: inconvenient locations, minimal emphasis on store aesthetic and customer service.
Masterclass is a premium learning platform with less choice, higher quality education offers, than Udemy.
Tesla have focused on making electric cars stand for performance, rather than economy, so they are willing to trade off low prices for superior parts and branding.
When you call the shots you get to design a business strategy around your goals. That’s because as much as a strategy dictates where your company ends up it also dictates what actions you take day to day.
Recently I’ve been offered opportunities that would allow my business to grow. But the growth would involve more complexity and not necessarily in ways that align to my goals for the business. I know I need to focus on the opportunities and choices for my business that get me closer to my ‘dream life’, and say no to those which detract.
I take on less work so that I have time to write, for example, because unlike some coaches, I do want to build a content led business.
If you are building a personal services business that you want to be the face of and retain control and high end results for your clients, then seeking scale would not make sense. For this type of entrepreneur, ‘growth’ is charging higher prices and seeking better projects, more so than adding bums to seats and taking on whatever business you can.
With clear goals, comes complete focus. You protect and channel your time and energy, honing your efforts on the most important tasks and avoiding procrastination.
An entrepreneur can tackle only one or two opportunities and problems at a time and so having clear goals that align to your strategy is absolutely essential for delivering outcomes, that you will enjoy delivering.
Once you know what you have to do you must find the discipline to do it
One of the greatest challenges of entrepreneurship is that you have to toggle between being the captain of the ship who sets the vision, and being a cleaner in the engine room.
Have you ever worked for a company and had the boss walks into the room, all gleeful and excited about winning a big new piece of business?
You smile through gritted teeth. On one level you are excited for the business, but on another level you’re resentful. The boss gets to share in the winnings of the sale and you are the one who has to deliver the result. Your life just got a lot busier.
Being a founder is both.
We both get to enjoy the winnings but then do the leg work to deliver upon it.
Occasionally we resent our boss (us) for making us so busy and miserable.
Not only is there a tension between achieving business growth and maintaining a work/life balance, but founders must also contend with the discipline required to meet their own goals.
You may have a clear vision for your business that aligns to your personal goals that excite you. But to make it a reality, you have to actually do the work.
Once a strategy is set you must become a dutiful employee and execute upon it.
Sounds obvious but it’s a very real dilemma that we are faced with. We want the goal but we are human and we struggle with feeling lazy, ill or demotivated from time to time.
Deciding to do the thing and doing the thing are not the same thing.
I’m faced with this every quarter to review my next quarter goals and reflect on the ones from the quarter before. I have often achieved about 40% of these goals. Whilst that may well be more than had I not set the goal at all, I cannot help feel some level of disappointment.
Was I too ambitious?
Too lazy?
Is my strategy wrong?
The buck stops with you and these questions may drive you crazy if you let them. Rather than ruminating, what always stands to be true, is maintaining the discipline and focus to driving the results you want.
If your plan is ambitious you have to make sacrifices to achieve it.
If you’re a solo founder or working in a small team you must both set the vision as well as do the grunt work to achieve it otherwise you are in dreamland. Execution is king in startup world but its often the bit we enjoy the least.
Remember those lifestyle bloggers travelling around the world? Amongst the glamour they have to show up and write every. single. day. That’s not always fun.
Founders will have to conduct performance management reviews on the employee that is themselves. Are you showing up, on time, consistently, to do the work?
A great way to tell if you’re focused on the right things is a calendar audit: where is your time actually going? Are your goals placed at the front and centre of your working week?
The Founder’s Guide to Discipline: Lessons from Front’s Mathilde Collin talks about her success as CEO of Front (Series C business, 100+ employees) can be traced back to her strict levels of discipline in running the business.
We often hear about the trope of the visionary founder leading a company to success, so in contrast to the founders who spend a lot of time looking at the future vision, Collin is held up as an example of how a founder’s discipline can be the most determinative aspect of the company’s success.
She says:
“At a high-level, discipline is focusing on just a handful of things, which is incredibly challenging because you’ve got so much to do and you’re pulled in so many directions — everything seems important. But discipline comes down to focusing on the right thing, which means you need to be crystal clear on what success looks like and how to measure it”
Discipline for Collin has entailed never missing an internal and investor memo in four years, diarising everything and analysing where her time is going to check it reflects current business goals, and raising investment in record breaking time thanks to strategic relationship building.
Her EA has mapped her time allocation out and she is transparent about sharing it with her team (and the entire internet):
So if discipline is about focusing on the right thing, you must know what the right thing to do is by knowing what success looks like for your business.
No one wants to run a successful business on paper that they hate in reality. So make it successful for you, and your personal goals.
See how it comes back around?
👀 Does this post seem familiar?
Here’ are some previous articles from The Ask to support you in defining and executing on your mission
- Do you need a personal mission statement for your career? (July 2020)
- How to set goals you’ll actually achieve (Jan 2021)
- How to connect your vision to reality in your business (June 2021)
Enjoy this article? Agree or disagree? Let me know your thoughts in the comments!
