My environment is densely filled with entrepreneurs and high-tech engineers. When it comes to a discussion of money, 90% of them repeat the same mantra:
Money (profit) is the primary goal of a company
Guess what? I don’t think so.
I realized I keep hearing it so often, so I’ve decided to challenge the popular opinion.
Why every company needs more money
I am far from doing bussiness for the sake of getting more and more profits. It does not make me happy whatsoever. My paradigm is different and is simple enough to be compiled in three thoughts:
- Money is a company’s oxygen
- Money is to experiment and fail safely
- Money is for making people happier
Money is a company’s oxygen
Follow the metaphor:
- To live, you as a human being must breathe.
- To live, your company must earn money to cover its expenses.
It’s just simple like that. Therefore I call it oxygen. Imagine your company as a living organism, a live system. With a little lack of oxygen, its parts begin stagnating. A further decrease of the lack can easily catch you off guard. The critically low level of oxygen may lead to suffocation and subsequent death of the company.
So my idea of money as oxygen is nothing about rolling in dough. It is about keeping the business running well. And that is an entrepreneurial skill because the business is dynamic and poorly predictable. Most likely, you never know what’s going to happen next. It’s a VUCA world, as they say.
So track your business oximeter mindfully.
Money is to experiment and fail safely
I love a lean way to do business. It’s neat when you are frugal and tend to save the money. But really, what is it for?
Mistakes. Mistakes you and your colleagues make.
You might say:
Wow, dude, why should we make them?
Why should we think about paying for them?
Isn’t the money down the drain?
The way I see it, you want your company to develop, right? There is no development if you continue doing what you do. You have to try new things and run more experiments. I like the saying: if nothing changes, nothing changes.
Oftentimes, experiments lead to failures. It’s fine, no worries. Be OK about it. Fail and always learn from the next failure. It will give you the vital experience and knowledge to develop yourself or your company in a better direction.
Sometimes, it may even lead to a pivot when a company changes its business strategy. For instance, did you know that:
- YouTube was as a dating website before it turned into a video UGC-service
- Nintendo had its taxi and ramen noodle business in 60s
- Amazon was only selling books online in 90s (I believe you know this one)
Feel free to spend the money on experiments and learn from them. If you keep knocking, eventually you get there.
Money is for making people happier
What a folly! Everybody knows money doesn’t make people happy!
It doesn’t. With that said, I am confident it can help people become happier.
Now it’s the happier vs happy. Tremendous difference between these two.
Being in the moment and getting a little bit happier frequently is more than enough to enjoy living, as numerous studies show. Happier is about embracing the moments of life.
Help people become happier. By people, I mean both customers and colleagues. Briefly, I’ve got several ideas/examples for you on that.
How to make customers happier
- Focus on their needs and issues. Start with Why
- Produce unique products/services
- Arrange more meetings and conversations with customers
- Spend the money to overdeliver and not to overpromise
How to help teammates get happier
- Listen to them carefully to see how their work-life can be improved
- Pay for the technology and services they need
- Help teammates to take expensive courses they want
- Take advantage of an opportunity to pay higher salaries
- Set up a system of giving rewards. For example, Merit Money from Management 3.0.
Your team is your main asset. You know, when things go bad, it’s not the money that works for a team with tight bonds. At that point, everybody start thinking: I cannot let my colleagues down.
Be courageous. Don’t wait for a suitable to become happier. Choose a moment and make it suitable for it.
I want to wrap up with this thought: money is a by-product of solving a problem more effectively than others.
It is a reward at first sight. Many of us are used to perceiving money this way. But if you dig a little bit deeper, it is a fuel that you reinvest in the energy of people, support the working system and allow running more company experiments.