Tuesday, March 23, 2010

Goals and Expectations of a Startup



I came across a tweet from Clare Lancaster of Women in Business the other day and it got me thinking about a conversation Mike and I have had a few times recently.

What are our personal goals for what we want to achieve in life and more specifically, what are our entrepreneurial goals? Being born in 1981 supposedly I sit on the border of Gen X and Gen Y, but there's no doubt I'm your typical Gen Yer. I'm 28 years old and on my 4th career change, and I've had pretty high expectations of what I want to achieve. But are those expectations realistic? If I'm honest I think a good part of the reason I'm on my 4th career change is that in each of my 3 previous jobs I felt I didn't have the opportunity to progress as quickly as I would have liked, and in the end I came to the conclusion that the only way I would progress at the rate I wanted was to start my own business.

Lately I've been asking myself why I wasn't satisfied working for my 3 previous employers, particularly the best employer in the world, Google. I think it's because a lot of the media I consume talks about all the successful businesses and people out there, and it creates an expectation that I want to and can be one of those people. I read TechCrunch every day which is always talking about successful start ups and profiling successful people, same with Springwise. Over the past 5 years I must have read about 100 books on successful businesses and business people, and I'm pretty sure not a single book on an unsuccessful business. If I look to the people who inspire me, in addition to a lot of the people I meet and interact with day to day, the Google founders Larry Page and Sergey Brin, and the Facebook founder Mark Zuckerberg are the stand outs. They've built amazing businesses and done it in a way that I admire. So with everything I read and the people I aspire to be like, it makes sense that my expectations of what I want to achieve are very high.

But are those goals realistic?

There seems to be all sorts of statistics on it, but something like 9 out of 10 startups fail. Arguably I'm on about my 4th or 5th, and Shoes of Prey is going well, so hopefully we can avoid the fail part this time, but of the 1 in 10 how many are super successful? If I define success as being on the scale of a Google or a Facebook those are the two fastest growing businesses ever, so I'm setting my expectations extraordinarily high if I want to achieve what they've achieved. And women's shoes isn't going to get me there. Reading about Larry, Sergey and Mark one of the key themes of both Google and Facebook is that the founders had absolutely no idea the business would turn out the way they did and they openly admit that luck played a massive part in their success. In the last 90's Larry and Sergey tried to sell Google to the existing search engines but couldn't find a buyer! Mark thought Facebook would be a great way for students at Harvard to connect with each other, he never expected that more than 300 million people would want to use it. There's no doubt these guys are brilliant, but there are a lot of brilliant people out there and these guys had the added benefit of luck along the lines of winning the lotto squared, so given I'm not as smart as them and am unlikely to get that sort of luck I should keep that in mind when I set my expectations and goals of what I want to achieve.

The next question I've been asking myself is, let's say Shoes of Prey or another business I start over the coming years has a ton of luck, goes well and is super successful and I don't have to worry about money after the age of 35, what on earth do I do for the rest of my life? Sure Jodie and I will want to have children and it would be great to not have to worry about money and so spend lots of time with them, but if I want to live to a good old age the best thing to do is not to retire, so ideally I'll be working into my 80's which leaves me a hell of a lot of time. Giving something back through charity work would be satisfying, or perhaps I'd find something new and different like politics interesting... but I'm pretty darn happy doing what I'm doing now, and part of the fun is the challenge of trying to make money... so if I didn't have to worry about money paradoxically perhaps I wouldn't actually enjoy life as much?! I caught up with a mentor/friend recently who's in this exact position. His business IPO'd a few years back and BRW puts his net worth at around $80 million. And while he wouldn't hand all that back for the world, he's now trying to figure out what to do with the rest of his life.

So, if achieving a crazy, lofty, unlikely goal isn't necessarily going to make me happy, and the very likely scenario that I don't achieve it is going to leave me feeling down because I didn't achieve my goals, why on earth should I have such high goals?

Well, one reason is that having high goals is what helps people achieve great things. As Michaelangelo put it:

The greatest danger for most of us is not that our aim is too high & we miss it. But that it is too low & we reach it -Michaelangelo

So it's with all of this in mind that I've decided to scale my goals. Realistically, $800,000 or so would buy Jodie and I a nice house somewhere in a beautiful location and close to family, like Byron Bay. And an income of $200,000 a year total for both Jodie and I would be enough to live a good, happy family life. And I want to be earning that from my own business as opposed to working for someone else, as I love the flexibility that one's own business provides. So that's my base goal, I know if I achieve that I can live a happy life. That said, being in a position where I'm either earning millions a year or have sold out of a startup for 10's of millions would be totally awesome, so that's still a goal and hopefully I end up somewhere in between those two. As for time frames, I plan to live and work until at least 80, so I don't need to achieve my goals this year. Jodie and I will want to have children sometime over the next few years so it would be nice to reach the base goal within 5, but it's not the end of the world if we don't. As for the lofty goal, it would be fantastic to achieve that within 10-20 years time so I could find something new and different to do, and that's going to motivate me to work hard on Shoes of Prey, but if I don't ever reach that point I'll still be happy.

It's obviously a difficult balance to strike between setting goals that keep you motivated, without leaving you in a position of feeling unfulfilled if you don't achieve a goal that realistically is unlikely to happen.

How do you go about setting your goals?

9 comments:

  1. I like how you talk about the lifestyle you'd like to lead and then work back to a dollar figure. I think a lot of people become overly focused on wanting to be worth or have an income of $x when really what's important to them is the ability to lead a particular lifestyle.

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  2. This is an exceptional post Fox. No doubt your drive, common sense and constant evaluation/tweaking of your goals will get to where you want to be sooner than expected.

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  3. Michael - being a similar position (to the point of leaving a steady job and doing something different) , I can totally relate to some of those feelings. A fantastic post!! One thing that has hit home has been the importance of health , which is something I have been focusing on post banking. Irrespective of the amount of money you make/have in assets it's no good if you are losing control of the thing that keeps you alive....bit philosophical but thought I would share:)

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  4. Nice one! What do you do when you've hit the dollar figure of what you want? Sit back, and do things you've always wanted to do. Write a book, radio jockey, open a guitar shop. Anything's game!
    Most importantly, don't ever do anything that you don't enjoy, either while getting that dollar figure, or after. It's not worth it :)

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  5. Thanks Foxy - you have just inspired me on a Tuesday evening! I have come to similar conclusions about happiness and the goal to become financially independent. I like the way you have come up with a realistic goal to take you most of the way to being happy. I think its the challenge and the reward from achievement that makes the good times so good! You don't get a bigger challenge than starting your own business!

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  6. James - cheers, agreed.

    Kat - thanks, much appreciated. :)

    Chris - couldn't agree more about your health point, no amount of money in the world is worth damaging your health. I've actually postponed the final year of my MBA because trying to cram that in with a startup was going to be way too stressful = bad for my health.

    Hajira - you're right, so many things to do once financial goals are met! And agreed on not ever doing anything you don't enjoy... it's turned into a cliche but you literally only live once, might as well enjoy it. :)

    Jasper - thanks Jasper, glad to hear you've been having similar thoughts.

    Thanks guys.

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  7. For me, I have interned at three places, one of which was a start up which failed within the first six months of business. It's disheartening, but I think failure can be the biggest learning experience. It makes you grow. I am graduating from college this May, and I am afraid of failure, sure. I am afraid I won't be able to make it in "the real world." But it's encouraging to see your shoes doing so well.

    By the way, I have showed your web site to several friends and we really like the idea of designing our own shoes. When I graduate, I might buy a pair as a present to myself. :) Keep up the good work and the awesome blog!!!

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  8. Thanks Michael for sharing this great info. I could not agree with you more about having the passion to be an entrepreneur, have your own company and have the freedom and still be very successful. I am completing my Internet Marketing Master Degree and I have a true passion for women heels. I am working on my plan to bring my dream to life and I do believe with passion, faith, and hard work, all things are possible. Congrats for you and Jodie for the success with Shoes of Prey!

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  9. Thanks so much Nicole. All the best with www.shoefetishboutique.com and stay in touch. :)

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