It’s been over 4 years since I was first introduced to Seth Godin. I’ve read most of his books, and I’ve been subscribed to his blog for some time. Even though I don’t always agree with what he has to say, I’m a big fan of how he’s able to get across big ideas with short messages.
I still have a hard time self-identifying as an entrepreneur, but I found these questions interesting. They’re the sort of questions where – at least for a new entrepreneur – having the answer right away isn’t nearly as important as knowing to ask the questions in the first place.
That said, it got me thinking about how I’d have answered these questions at different points in my career. I thought it’d be a fun exercise to answer them as “young me” and “now me” to do some compare and contrast.
Are you aware of your cash flow?
Young me was aware of the implications of cashflow, but didn’t think about it in terms of cashflow. It was much simpler than that. If young me had rent due in 7 days, and my next check wasn’t going to arrive for 8 days, I had a problem. What I realized quickly was that my goal needed to be never solving that problem.
Any time spent solving that problem was time I couldn’t spend solving the problems I thought were interesting.
Now me is able to think about cashflow in terms of efficiency, not just inputs and outputs. Now me has gotten pretty good at recognizing inefficient money, and trying to reduce that. Now me has gotten pretty good at finding new, more efficient & sustainable money.
The biggest thing that’s changed about my awareness of cashflow is that fast money is rarely the best money.
The thing about a fish in the stream is that it doesn’t care if the water is six inches deep or a foot deep. As long as it never (ever) goes to zero, it’s fine. What’s your zero point? What are you doing to ensure you get to keep swimming?
That’s the difference between me and a fish. I do care if my water is 6 inches deep or a foot deep. Headroom matters.
Young me knew that my “zero point” was living expenses. Young me knew that living expenses were variable, and I always had the option to find ways to “make it cheaper to be me”. Young me didn’t need as much headroom.
Now me’s “zero point” is higher than living expenses. I have contractors and team members I’m responsible to pay on time. We have services and bills that need to be paid. And we have growth in mind. Operating at or near the zero point means room for growth.
Running my companies in 6 inch deep water means there’s more stress than when the companies have a foot of water to swim in. More stress means less productivity. Less productivity means that the water level is probably going down before it goes back up.
Are you trying to build profit or equity? A business that builds a brand, a footprint, a standard and an audience might end up being worth millions (witness Tumblr, which has many millions of value but zero profitabilty). On the other hand, a business with no exit value at all might spin off plenty of profit (consider the local doctor’s office). It would be great if you could simultaneously maximize both the value of your company and the profit it produces (in the short run), but that’s unlikely.
Young me didn’t necessarily understand equity, but young me did understand that only maximizing profits had an impact on quality, and part of my goals was to maintain a high level of quality. “Make things better” has long been a part of my drive for starting a business. Maybe I knew more about equity than I’d give myself credit for then.
Young me’s relatoinship with profitability was one of scale. It didn’t take much to be profitable, but my motivation to “maximize” profits needed to be in a healthy balance with the value I provided or else I’d feel lost.
Now me thinks a lot about profit and equity, and their relationship with one another. The challenge with equity is in converting it. I believe strongly in investing heavily in building social capital early, but I also know that the path to converting social capitol to monetary capital (and ultimately, profitability) isn’t obvious. That doesn’t mean it’s impossible. My work has proven that you can do well ($$$) by doing good (deeds).
With Indy Hall, we built a business model that has a symbiotic relationship with the equity generating elements of our community model, rather than a parasitic relationship. That is to say, when the community is healthy and growing, so is profitability. And when profitability is growing, the community has more resources and headroom to grow and evolve as well.
Now me doesn’t think that equity vs profitability is an “or” statement – it’s an “and” statement. Without one, any value in the other is diminished.
What’s your role? Do you want to be a freelancer, an entrepreneur or a business owner? A business owner is the boss, but it’s a job, a place that is stable and profitable. An entrepreneur is an artist of sorts, throwing herself into impossible situations and seeking out problems that require heart and guts to solve. Both are fine, but choose.
Young me was happy being a freelancer. I valued independence, freedom, and choices. I valued as few dependencies as possible. I didn’t mind trading my time for money.
I think that young me’s first foundations of non-freelancer thinking came while inventing Indy Hall’s business model: it was the first time I began to decouple the resource (time or space) from the cost. It took me a long time to make the transition away from “time for money”. It’s a hard transition for anyone to make.
I remember one of my first conversations with Josh Kopelman in 2007 about Indy Hall – he asked me if our members were freelancers or entrepreneurs. I didn’t understand the question, and I think Josh knew that. As Indy Hall evolved, I became much more aware of the elements of the business we created.
Now me is no longer interested in trading my time for money. I want to trade value for money. I want to create things of high value for people who appreciate them enough to open their wallets with joy.
I’m also not so interested in being the owner. I’m much more interested in building things I can give away to other people to own, and love owning. I learned this lesson working with Geoff, perhaps one of the most important he’s taught me.
I suppose by this definition, now me identifies with the “art” of entrepreneurship as a sort of craftsmanship. I believe in taking the time to understand people and the markets they comprise, and what they value. Now me’s role is more of a problem solver than ever before, and every new challenge pushes my own personal and professional boundaries. It’s a weird kind of thrill-seeking that I’m pretty sure I’m not as in control of as I’d like to like to think I am.
Now me is cautious not to glorify entrepreneurship.That’s a mistake. Now me doesn’t seek thrilling situations for thrill’s sake, though I do understand the addiction. All the while, now me thinks that hubris is the most toxic element of entrepreneurship.
The willingness to look for the next “Dare to be Great Situation” doesn’t require arrogance or pride (hat tips to Lloyd Dobbler and Van Wilder). Now me’s need for adventure doesn’t exclude humility.
Are you trying to build a team? Some business owners want to minimize cost and hassle. Others are trying to forge a culture, to train and connect and lead.
Young me was interested in the connections that came with a team, but unable to grapple with the risks and overhead. I actually developed my first company as a pseudo ‘agency’ in the fact that the full time team was really only me, but every project included a voltron-like composite of players.
Young me knew that quality players and trusting relationships was an important part of how I wanted to get work done.
Now me still believes in quality players and trusting relationships as the key to getting work done. That mode of thinking is actually the core asset that we strive to create at Indy Hall. The path is a bit unusual since the business’s team is Geoff and I on one level, but also includes our membership on many other levels. The business we created that way is also a reflection of the tools that others need to run their businesses that way.
Like we managed to find a symbiotic relationship between equity and profitability, I’d say that now me wants to minimize the cost and hassle of forging a culture, training, connecting, and leading. Another “and” statement where young me (and many others) would have considered it an “or”.
Now me’s life goal is to work on amazing things with amazing people. Amazing things alone isn’t enough. Great people on lousy things isn’t enough. It needs to be both.
Which kind of risk is okay with you? There’s financial risk, emotional risk and brand risk (among others). Are you willing to put your chips on the table daily? How about your personal reputation?
Young me’s tolerance for risk could really be mistaken for (or interchanged with) some level of naivety. More than once in my life, the things I didn’t know ended up being some of my biggest assets.
Young me took things very personally. Young me found emotional risks far scarier than financial risks.
Now me is always curious when people comment or commend on my risk taking. Both young me and now me have never been interested in gambling. Young me’s worst case scenarios were never really that bad. Now me’s worst case scenarios…still are never really that bad.
Now me likes to design the risk out of the problems I’m solving. The risk doesn’t need to be 100% gone (it almost never is) but it is usually able to be mitigated.
Now me believes that trying things is different from risk taking. Trying can includes risks, but often we’re fearful of the risks that we’ve imagined possible, not the risks we’ve actually studied.
And finally, and most important, why? Why are you doing this at all?
Young me simply believed that I could do things better than the way they were being done. Young me had an unwillingness to settle for “good enough”.
Now me believes that we can all do better, and that the status quo is disrupted by doing better, together.
2 and a half years ago I was walking across downtown Austin Texas with a friend and she asked me, “Alex, what’s your end game?”.
I want to be able to do whatever I want, whenever I want. I want to know that whatever I’m doing is the right thing to be doing, and if it’s not, to be able to change it. And most importantly, I want to be able to do it with people who I care about.