“Success? I don’t know what that word means. I’m happy. But success, that goes back to what in somebody’s eyes success means. For me, success is inner peace. That’s a good day for me.” - Denzel Washington
Denzel Washington’s quote highlights that everybody defines success differently. The burning question to founders then becomes how do YOU define success. Are you starting your company to grow a sustainable business for the long term? Are you looking for the big flashy IPO? Or is your goal to have a sizable acquisition? All options are acceptable outcomes to strive for, however the manner is which each of these outcomes is achieved differs greatly. Factors such as company traction, organizational structure, and execution are all huge components of how success in any of these forms is achieved.
It’s important as an Entrepreneur and start-up founder, first and foremost, to define what success means to you. Attaining success, means understanding how you define success and then finding the right path to get there. I compare this to taking a road trip, you wouldn’t set out on a road trip without having a destination in mind and planning a general route and direction. Having a solid plan is a great start. Executing that plan is what separates successes from failures.
Once you understand how you define success, the decisions that you make as you build your company need to align to that outcome. I’ve seen many entrepreneurs stray from their initial definition of success. They become muddied as they are influenced by investors, advisors, and market factors. They become persuaded to change that definition based on varying interests surrounding the company. In most of the successful entrepreneurs I have worked with, a commonality I’ve seen is an unwavering view of success. This may have meant they had to adjust or pivot on their original idea to attain success, but how they viewed success never faltered. These founders also selected investors and advisors that were aligned in their idea for success and were supported by the experienced folks around them.
Failing to define what success means to you and or not sharing your vision of success can in fact jeopardize the outcome of the company. One of the early stage start-ups I worked with had a strong ARR, a great business model, a viable product, but no direction and alignment at the top. The two founders, ironically a husband and wife, had very different visions on what the company was worth and where the company should go. They both defined success differently but never communicated that to each other. They took money from investors that had yet another vision and hired on advisors that were also not aligned with what they wanted. I watched them walk away from 2 separate acquisition offers that were very lucrative and very fair. The investors and advisors both pushed for the sale but ultimately did not have controlling interest. The reasons for the founders decision to walk away were also very different.
One of the founders had a very inflated value of the company. She felt the company was worth far more than the offers presented were for and did not accept the valuation by the numbers. The other founder felt that he was the best person to grow the company and was unwilling to hand over control. He was willing to sell but with the condition that he still ran the company. The buyers in both cases were business people and valued the company correctly and wanted to fold the technology into a currently successful business that supplemented the offering of the company in question.
Needless to say, this ultimately led to the company failing. After 2 months of not being able to make payroll the company sold off it’s remaining assets and shut down. The investors recouped most of their money from the sale of assets, the founders ended up with next to nothing. The founders were not aligned with each other or their investors and in the end lost money rather than giving their business the opportunity to succeed without them. Sadly, this happens more than you hear about and it’s a simple mistake that can be avoided by ensuring that everyone is aligned and executing a plan to achieve the same goal.
