February 3, 2011
I wrote recently on Maturity and the way I’ve been trying to view my life lately.
The place that I’ve found this thinking most interesting is in conceiving of my businesses (esp. THA). It’s easiest to try to solve most of our business problems in the frame of “what’s best for us right now?”. Especially in technology, which is so driven by quick-return venture capital (where we expect an exit in no longer than 3-5 years), this type of thinking is endemic. We live and die by the quarterly numbers. The most forward-thinking of us try to think 9-12 months out. Sometimes, our roadmaps extend a whopping 18-24 months. But that’s it.
And that’s a sure way to make decisions that are bad. My experience with venture capital driven businesses has been almost universally bad – the decisions that the VCs (or their hand-picked executive teams) made were almost universally oriented toward a quick exit, and, most often, in diametric opposition to what would have been done if the company had been managed with an eye toward building a long-term sustainable and profitable business. I’m not the only one with this experience - Inc published a great article about this a few years ago on Friendster that was eye-opening to me when I first read it.
Lately, I’ve been trying to conceive of our businesses in a more long-term way. I’ve been trying to think about it the way that (I imagine) we conceived of businesses 100 years ago – not as something with a quick exit, but as something that would have to feed our family for the rest of our lives. The questions I’ve been asking myself are oriented toward that sort of thinking:
- What would we be doing if our goal was to be most profitable 10 years from now?
- What is single thing that we can do as a business to make our customers’ lives better in 36 months?
- How can we best reinvest profits today to triple or quadruple them down the road?
The thing is, this wasn’t the type of business thinking that I’ve been taught how to do. Nor do I know anybody else who is. Every time I read the typical business book, they’re like reading diet books: GET RICH NOW WITH NO EFFORT AND NO ENERGY! And I love that kind of business book. But nowhere are they trying to teach you how to create something sustainable that adds real value over the long term.
If anybody out there reading this one has any advice on building a company that’s sustainable and profitable on a 50-year time scale, I’m all ears. Because, other than some of the old articles about how the Japanese created 100 year plans, I can’t really find anything that gives good advice on this one.