July 13, 2015
Here on Tech.Co, we’ve looked into the many ways through which startups can achieve success. Sure, while the word “success” can be pretty subjective, at its most primitive understanding, it simply means: not dying. From being able to anticipate failure to an issue of mere timing, it seems that there are many factors that people consider to be top factors contributing to whether a company will succeed. For AngelList COO, Kevin Laws, startup success can often be determined by whether a company is focused more on its mission or on making money; to succeed, companies have to place more emphasis and belief on their mission.
Laws recently penned an article on Harvard Business Review wherein he goes into this idea that the most successful startups are the ones who prioritize their mission over the prospect of making money. By ultimately pursuing a greater mission (oftentimes the mission with which you initially had going into starting your company – mainly: to get this product/company to improve lives or impact society in some way), then financial success will inevitably follow. Writes Laws:
“If you believe in your mission, then it’s part of your moral imperative to attach a business model to it. There’s no faster way to achieve your lofty goals. But that’s the order for it: The business model exists to serve the mission, not the other way around.”
Citing Google and Facebook as examples, Laws explains how the two companies thought beyond selling out or getting major investments, and instead continued to build on their products and their missions until ultimately growing into the massive corporations they are today. Google, for instance, historically turned d0wn an acquisition offer of $1 billion by Yahoo; similarly, Facebook turned down several offers by both Yahoo and Google. Today Google and Facebook are worth $350 billion and $200 billion respectively.
If startup founders are simply in the startup business for the money, then there’s very little chance that the companies they launch and run are likely to succeed in the long run. According to Laws: “for founders who are in it just for the money, there are too many reasons and ways to quit before the company becomes a massive success.”
If a startup’s idea of “success” is tied to the amount of money it’s making or how much money it’s attracting from investors, then it puts itself in a shaky position where equilibrium can shatter at any moment. Consider: if a startup founder realizes after a few months that revenue is far from where it needs to be (or there’s no revenue at all), there’s a higher chance that the company will end operations. On the opposing end, a startup founder motivated by the company’s mission to perform a service or provide a product won’t crack as easily to these financial pressures.
While Laws posits a persuasive argument, that’s not to say that startups shouldn’t not think about money. Indeed, you need money to actually make sure that your company stays afloat; running out of cash is also one of the top reasons why startups fail (with no market need beating it for first place). In order for startups to succeed, they have to carefully navigate a world wherein they pursue a mission or goal that hopefully falls in line with market needs – it’s not about simply chasing a mission, but chasing a mission that works.
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