Smart entrepreneurs spend a lot of time thinking about product market fit. Turning strangers into customers is pretty much everything, after all.

That’s why entrepreneurs put a ton of energy into crafting the marketing narratives that will persuade people to buy their thing. 

They study these arts and sciences to do so: 

  • Product Design.
  • Marketing. 
  • Sales.
  • Persuasion. 

Founders are wise to learn about—and ruminate upon—this stuff. If you want to win in business you need to be obsessed with getting these things right. 

There’s one other thing entrepreneurs need to consider though. There’s one thing missing from that list. And most entrepreneurs never think about it at all. But when they do, it revolutionizes their product’s ability to sell itself. Like magic.   

Do you ever wonder why some products seem to magnetically attract customers, fly off the shelves and generate fanatic word-of-mouth? 

And vice versa: Have you ever wondered what it is about an otherwise great product idea that just happens to weirdly not sell very well? 

When a useful, problem-solving product always needs to be aggressively pitched, never “sells itself” but instead requires aggressive tricks and hacks to convince people to buy… it’s missing this final piece of the product-market-fit equation:  

The target market’s psychological bias for action. 

Here’s how bias-for-action works: 

If you’re a scrappy founder who has an idea for a clever solution to an “itch” you’ve felt… then of course you’re going to go out and do your research. 

Before you build, you need to discover that other people share your itch. 

But merely finding others who’ve felt the itch… is not enough. 

Your target market needs to—in addition to feeling the problem—also have a strong psychological bias for taking action to solve the problem. 

That sentence might read like I’m saying the same thing two different ways. I’m not. The distinction is subtle. And it changes everything. 

Behavioral inertia is a thing. 

It’s a big thing.

Behavioral inertia basically means that—for the most part—people do what they’ve always done. 

Human beings are creatures of habit. 

We like new stuff. And we like innovation. But we are seldom powerfully motivated to do radically unusual things in our lives. Most people don’t like to try radically different solutions to their problems. 

We like the familiar. 

This is why American adults eat about 1000x more mac and cheese than they do sea urchin. And yet, most people really enjoy trying new foods. 

If you ask a person if they like to try exotic new flavors, they’ll say yes. But if you watch what they eat in any given week, it’ll almost entirely be the same old stuff. 

This is because our psychological bias for action—when it comes to trying new foods—is pretty low. 

What shall we have for dinner tonight? 

Want to try that Bhutanese place? 

… Nah, let’s just get pizza! 

Behavioral inertia basically means that even when we know we should change—or try something new—we just keep on doing what we’ve always done. Because it’s easier. 

Behavioral inertia is between you and your customer purchasing your thing. And it has to be overcome. 

It’s not enough that you’re certain that your target market has the problem. 

It’s not enough that you have a solution that works to solve it, either.  

The question that matters is:

How motivated are they to take action to solve the problem? 

If they have the itch, how driven are they to do the work of scratching?

Because scratching an itch is work. Even when you have a really cool, shiny new scratcher.  

No matter how easy your solution is, it requires your customer to overcome behavioral inertia in order to use it. 

It requires them to find it, purchase it and try it out. 

Trying anything new takes effort. It’s inconvenient. It’s often easier to procrastinate. To keep feeling the itch and not do anything about it.

I see this all the time in software startups. Well meaning product designers create elegant solutions to problems that millions of people have, but they forget about the customer’s lack of bias for action. 

I recently heard a pitch for a startup that made live relationship therapy available instantly, via an app. A classic “Uber-but-for-couples-counsellors” strategy. 

The idea is if you just made it really easy for people to hit a button and solve a problem they very clearly suffered from—in this case fighting with one’s spouse—then they’ll use it like crazy. 

Itch = scratched. Pain = resolved. 

Customers will throw money at the solution, right? And then they’ll tell all their friends. 

The problem is, most people’s psychological bias for action when they’re fighting with their significant other… is pretty low. 

And asking people to add a whole new mental “category” for spending money into their lives—that of buying one-click relationship coaching—requires the customer to overcome enormous behavioral inertia.

It’s so much easier to do nothing, just like you always have. 

This is why inventing brand new solutions to problems that have never before been solved… is actually really, really difficult. 

It’s difficult to sell, because of inertia. 

Cryotherapy is a thing. You might have heard of it. 

If you haven’t, here’s the gist: You can go blast yourself with freezing cold liquid nitrogen and it makes you feel great (afterward) and does good things for your health. 

Cryotherapy isn’t sweeping the world by storm though, because most people’s bias for action—when it comes to seeking out liquid nitrogen jet baths—is unsurprisingly low. 

Most consumers don’t have a mental allocation of their paycheck that goes to freezing themselves. 

If you’re a cryotherapy entrepreneur, you might be able to get people to try it once. But sustainable use (that drives a high customer Life Time Value) is going to be tough.

Why? 

Because of the behavioral inertia where everyone’s life is totally okay if they almost never freeze themselves. 

Products that skyrocket to success do so because they appeal to people with a strong bias for action. They solve a problem where the customer is also deeply motivated to go out and spend their money. 

They’re in the market for a solution. They’re hunting. 

Car dealerships exist because it is worth it for them to exist. 

It’s worth it to be right there, right on the busiest street in town… so that when people need a car, they know exactly where to find you. 

“Early adopters” are people who have a strong bias for action that is caused by wanting to be first. They’re people who take so much pride in being at the front of the new wave of tech (or whatever) that they spend a ton of time and energy educating themselves, seeking out the latest and greatest. 

For example, they know exactly how much RAM the latest smartphone has. 

And it’s the motivation to find stuff like that out that also gives them a strong bias for action. 

Shut up and take my money 

Entrepreneurs who find themselves exasperated at potential customers who are hemming, hawing and hesitating, despite: 

  • Being perfectly in the target demographic
  • Suffering from precisely the problem the product was built to solve 
  • Being financially able to pay for the product 

… Are entrepreneurs who’ve failed to find customers with the psychological bias for action. 

If you want customers who: 

  1. Throw money at you. 
  2. Who tell all their friends. 
  3. And who happily justify your price to themselves… 

Then you need to build and design products for people who are actively hunting for solutions. 

You need to design your product for people who’ve already overcome their behavioral inertia and who are ready to try new stuff out. 

You’ll find these people at the front end of the product adoption bell curve. You’ll find them checking out your competitors. They’ll be talking online to other fanatics who are just like them. 

You see the problem with “Uber, but for coaching”?

Or “AirBNB for exotic sports cars”. 

Or for yet another productivity/to-do list/project-management app being advertised via Youtube pre-roll commercials? 

Or whatever. It doesn’t matter. 

All ideas of this kind will only appeal to a tiny segment of people who are already obsessed. 

They’re the people laying awake at night thinking to themselves “Why isn’t there a way I can borrow a rich person’s Ferrari’s when they’re not using it??!”. 

What these kinds of ideas will not do is convince the people who kinda would like to drive an exotic car… to do so. 

The activation energy is too high. 

You gotta sign up, you gotta pay money, then you gotta go drive it.

These slickly designed project management tools will never convince fundamentally disorganized people who run their lives via post-it notes… to get their shit together. 

The activation energy is enormous! 

The first thing you have to do, when you download that new productivity app is import a bunch of your data and get to work color coding your categories. 

(Unless of course, you’re smart enough to outsource your productivity planning to a pro!) 

With the sports car or the software… It’s easier to just stay home. 

Put on Netflix. 

Do what you always do, instead. 

The most important question any entrepreneur can ask themselves is: Who am I building this for? 

And, how motivated are they to go out and throw money, time and energy at solving this problem for themselves? 

If they’re doing so—if they’re already trying and it’s costing them money, time and energy—and if you have a better way… you’re going to win. They’re going to want to try your thing. 

I remember the first time I logged into Facebook. I was at an age where socializing—being “inside” the right circles—was pretty much the most important thing. I was already spending a ton of time and energy connecting. So the activation energy required to get set up on Facebook was worth it. It was so worth it that it felt like fun. 

As an entrepreneur, you never want to try to persuade people to try something totally new, that solves a problem they’ve been happily living with. Or tolerating. 

Find and build solutions for problems people are itching to lose, not just problems that merely itch. 

Get in the habit of asking yourself this one simple question:  

How strong is the target market’s psychological bias for action? 

You need to know. 

If you’re an entrepreneur, you’ve experienced that pivotal “I need some productivity hacks” moment. 

It happens in every entrepreneur career when an exciting new idea, glowing with uninformed optimism… morphs into an oh-shit-this-is-tough venture. 

In those moments, entrepreneurs double down on productivity and focus. They start making lists, tracking their time in 20 minute increments and just generally doing whatever they can to become laser focused. 

The focus and productivity business and every seasonal fad it manufactures—did someone say “bullet journals”???—is big business. Huge business. 

Every year, entrepreneurs (and civilians) spend millions on everything from productivity self help books to nootropic supplements. Software is the biggest category by far, and new slickly designed apps are constantly coming to market—all promising you’ll become a better you. 

Here’s something I believe that no one else does: 

Software alone will never make anyone more productive 

The human brain is divided.

Scientists are learning that the neocortex—the part of our brain that scientists are using when they research, and that you’re using when you try to be more productive—is really just the mind’s “wrangler”. That there are other, deeper parts to our psyche that make up who we are. 

And it turns out, our limbic system—sometimes known as our “Mammalian Brain”—has a lot to do with our motivation. 

Focus is a front-brain process. It’s something the most grown up, conscious part of you makes you do. 

The drive though… the desire to sit down and focus… that comes from this more ancient part of our brain. 

The mammalian brain cares more about human connection than anything else.  

The brain we share with our primate ancestors was built for team work. It’s dedicated to noticing—and caring about—subtle social clues. It’s deeply concerned with whether or not the other monkeys like us. 

(It evolved this way because being liked—and cooperating—with the other monkeys was a tremendous advantage that let us get lots of food and have lots of babies.) 

The mammalian brain is why software—no matter how smart the AI assistant—will never motivate you to focus 

I have strong opinions about all of this of course. I’m the founder of Commit Action, a “focus and productivity” service for entrepreneurs.

Commit Action started when I began toying with the idea of taking what I believe to be the most important part of coaching and therapy—the human connection and accountability—and splitting it out from all the other advice, strategy and tactics. I envisaged a sort of “clean” form of productivity coaching. 

We struck gold at Commit Action when we realized that what’s broken about to-do lists isn’t the to-do list… it’s that most people build them by themselves. 

Human beings outsource their sanity. 

It takes a village—or at least a single dedicated thought-partner—to organize a human mind. 

Commit Action works because instead of building your to-do list yourself each week from a place of isolation and a vacuum of accountability… you have it built by a human being whose sole job is managing your focus. 

This switches mammalian brain on. Motivation and focus flow. 

We realized the same thing that was broken about to-do lists, was also broken when it came to calendars. 

My digital calendar system works great. 

I live and die by it. It’s a digital bible of exactly where I will be and who I will be talking to. I adhere to what it dictates.100%. 

Except for appointments I make with myself. 

Because I don’t make appointments with myself. What I do is fill my calendar up with stuff where I’m accountable to other humans to show up. And I just try to fit in all my actual work between that stuff. 

Any time I make a date with just myself—to work on something exponential and game changer—it’s not an appointment. It’s just a loose intention to “get to that this week”. 

And if I put little sessions on my calendar like “Write a blog post” from 9am-10am? 

… Without the human accountability of a real meeting, I’ll blow that “appointment” off for something as low leverage as an email or Slack conversation. 

Everything changes when you add human connection to your most important appointments 

My business moves forward exponentially when I take a certain type of action. 

At Commit Action, we call it “Growth Driving Activity” or GDA. It differs from business to business, but it has the same psychological formula: GDA requires courage more than effort.   It drives exponential business growth (1+1=10). And it’s the easiest thing in the world to procrastinate. 

Executing on GDA should be a scheduled, committed appointment we make with ourselves each and every week. Even if it’s only for an hour or two. 

Adding accountability to our commitments to our self radically increases our motivation to execute. 

I’m excited to announce—today—the release of the biggest evolution in our service offering at Commit Action since the company was founded. 

Now, in addition to building out professionally clarified to-do lists for our customers… our Executive Effectiveness Aides will also create a new calendar for our customers. 

The Commit Action Calendar is designed explicitly and specifically to sit on top of a busy entrepreneurs appointment calendars. 

Future of Productivity

I personally have three calendars (for three different companies I’m involved intimately with) and a calendar I share with my wife. Every appointment in each of these is a commitment to show up somewhere (or on the phone) with another human. 

The Commit Action Calendar is the calendar for the appointments you need to make with yourself.

The calendar we’ve built represents a commitment you make to yourself to execute on your boldest plans. 

The tech we use allows this calendar to effortlessly subscribe over the top of any other digital calendar system you use. The idea is to see exactly how your appointments-to-yourself line up with—or get crowded out—by your appointments with others. 

This isn’t a replacement for your current appointment system. It’s the addition of a new, most important layer on TOP of your system… that represents a commitment to treat showing up for your own projects with the same focus and dedication you do for coffee meetings. 

Think of The Commit Action calendar as a layer in your week-to-week plans that carves out the time you’ve always meant to carve out… to work on the stuff you’ve always intended to. 

Our philosophy at Commit Action is that the future of ultra-optimized focus and productivity is human. 

Your “Appointments with yourself”are now a commitment your mammalian brain has made to yourself and your Commit Action Aide on your team.

We believe that having a dedicated team member (our Executive Effectiveness Aide) in your corner—someone whose sole job is keeping you in the zone—is a vastly superior approach to entrepreneurial productivity.

Outsourcing your focus and productivity this way taps the mammalian brain for maximum success. 

We believe that when you outsource the battle of organizing and clarifying tasks—and now, when you outsource the battle of making an hour by hour plan for the week—preserves your willpower and powerfully frees you up… to actually do the work that matters.

The Commit Action Calendar is a done-for-you solution. All you have to do is show up. Your Executive Effectiveness Aide will build it out for you—concierge style. You’ll be free to do what you always knew you were meant to do best: Execute on big vision. 

We’re really excited about this new direction and have already seen promising results. While other companies are building our AI chat bots designed to coach you on productivity, we’re more determined that ever to support the world’s top entrepreneurs with our thesis: 

That pairing dedicated productivity aides with our entrepreneur clients—and empowering them with clever tools—is the only way to transform these entrepreneurs into the highest leverage versions of themselves possible. 

Partnerships. Strategic Alliances. Joint ventures. Investors. Vendor-Client relationships.

Teaming up with other humans is undoubtedly the fastest way to create extraordinary business success. Good partnerships are greater than the sum of their parts.

No one is an island. No entrepreneur succeeds alone.  

Whenever and wherever you find yourself with a terrific, exciting opportunity to jump into something with another human, you also expose yourself to huge risk. 

As The Shrink for Entrepreneurs, about 50% of conversations I have with clients center around the stress, chaos and heartache of business partnerships gone awry.

Here’s a list of seven questions all my clients wish they asked their partners – and themselves – before they jumped into business-bed together. 

Ask yourself these questions. Ask your biz partner. 

Before it’s too late. 

1. What does success look like?

When you’ve got a sizzling hot new idea and you’re drunk on the excitement of it, it’s easy to look a potential partner in the eye and say “Do you want to come with me and change the world?

Steve Jobs said precisely this to John Sculley, in Central Park, when he asked him to quit his role as Pepsi’s CEO and join Apple.

It’s tempting to want to emulate these kind of grand gestures. But even though John said yes… he eventually contentiously left Apple. The partnership ultimately didn’t work out.

It’s staggering how many entrepreneurs leap into bed together without articulating what success will actually look like. If you’re going to work together, you need to understand what both of you consider a win to actually be.

Are you aiming for an exit? If so, when? Are you taking your idea all the way? And how far is that? Or, do you see yourself as someone who starts things and ideally hands them off so you can jump into something new?

How big are you willing to go? What size of vision are you willing to keep showing up and working toward??

Ideally, these are questions you want to be confronted with. Hopefully your partnership goes so well that you have to answer them.

You can avoid a lot of heartache by clearly defining success, together, before you get started. 

2. What does failure look like?

I’ve seen so many founders essentially sitting in a slowly sinking ship together, each refusing to reach for the life raft because they don’t want to let the other person down. Or – even worse – because they each incorrectly believe the other person in the partnership is more optimistic about turning things around than they are.

People don’t like to articulate their personal definition of failure in when they start a new project or business. It feels like a bummer to do so. But also, they’re hiding: If and when they fail, they won’t notice that they failed. Not defining failure means it won’t hurt so bad if it happens.

The danger of this is that – as we all know – most business ideas fail. The problem is, they rarely do so catastrophically in ways it’s easy to notice. Instead, they putter along in a slowly declining direction.

When entrepreneurs fail to define what a failure is, they fail to draw a line in the sand that lets them say “It didn’t work out”. They fail to define when it’s okay to free themselves from a bad idea and a bad partnership.

When you kick off a new venture with a partner-in-crime, sit down and do the uncomfortable work of agreeing on (and documenting!!!) your point-of-no-return cut off.

I call it a new venture’s – or project’s – “Minimum Viable Outcome”. Know what yours is. Ask your partner for theirs. Give your MVO a specific timeline and a specific target.

Ask yourself and your partner: “What is the absolute minimum X month result – be it sales, or some other KPI – that would be validating enough to keep us interested and committed to this opportunity?” 

Agree, here and now, that if that timeline (of say, six months) plays out and you come in UNDER that number… that you’ll both call it a tragedy and move on with your lives.

Be real about the number you set: If hitting 80% of your MVO target feels like it’d still be enough to make you want to keep trying… then you didn’t define the real MVO. Don’t bullshit yourself about what is and isn’t a failure.

3. How will you feel about sustaining the partnership if things just go “okay-ish”?

In my experience, most joint ventures (and business projects in general) are not wild overnight successes. Nor do they turn out as abject, disastrous failures.

They go okay.

It’s never as fast as you think. It’s never as easy as you hope. It’s also never as difficult and high risk as you worry about, late at night.

Most things go okay-ish.

Are you ready for okay-ish?

Will sustaining the partnership make sense – by investing effort, time and even money – in the event that it produces moderate, mediocre results?

Preparing for success and failure is smart. Being ready for “good enough” is true wisdom. 

4. When and how are you going to untangle your partnership and part ways?

It’s essential that you ask about success, failure and the in-between. Because at some point, the partnership will come to an end.

Less than 1% of business partnerships last “until death do us part”. When you’re enamored with an exciting idea, the future looks peachy.

When you’re “in love” with someone you believe to be your ideal partner, it’s easy to think you’ll build an empire and lifelong legacy together. The reality is, founders – of even the world’s most successful startups – usually see their founding team re-shuffle within 5-10 years.

The world’s greatest rock bands always experience “creative differences”. Your idea sounds great, but five years is also a really long time. Paradoxically, five years will also speed by in a flash.

Make sure you’re proactively planning a strategy that can fairly (and quickly) untangle your affairs. Make sure you know how to free both parties from the partnership.

Some of the worst partnership troubles arise when both parties want out of a venture, but the financial resources to fairly buy-out or compensate one or both parties aren’t yet available.

Don’t let your partnership become a prison. Always plan for exits. Not just the good ones. Know how you’ll both get out, in both wildly successful and disastrous scenarios.

It’s likely that reality will go okay-ish – as we said –  so be ready for that too.

5. How much energy and work are you both willing to put in?

Nothing… NOTHING… creates more conflict than two business partners who fail to think about this question before they commit.

Entrepreneurs have very different personal sets of values that drive them in business.

Don’t make the mistake of assuming yours are the same as everyone else’s. Or even the same as one specific person (your partner) you think you know so well.

Are you building this thing to create a legacy? To scale and dent the universe? Or are you doing it to create freedom and lifestyle design for yourself?

The tension between “freedom” and “impact” – doing enough to escape vs sacrificing everything for a legacy bigger than yourself – is just the tip of this question.

It’s complicated, because most entrepreneurs want a bit of both. The question becomes: How much impact before we take a break? How much freedom is too much?

I’ve seen so many successful partnerships tragically fall apart because one entrepreneur wants to kick back and enjoy the success, while the other still wants to push ahead for growth.

It can happen because personal definitions of success itself are different: What I consider a solid annual income living in New York City (with NYC bills to pay) is wildly bigger than what my partner in the midwest might aspire to.

It can also happen because our internal drivers and values are different: We might agree that we’re aiming for X, after which we kick back by the pool as nomadic and free entrepreneurs. What if you get bored of that life before I do?

What if you want to take the asset we’ve built together – that in your opinion is criminally under optimized and still filled with huge growth potential – and grow it beyond what I ever wanted? Do I still get paid for your efforts, even though all I want is a four hour work week and cocktails on the beach?  

6. How often should you both question the “big picture”? 

Founders have to wear a lot of hats. Especially early on, they must do a bit of everything and get good at switching between roles.

The biggest, toughest hat-switch to make is the switch between thinking and doing. The cerebral work of coming up with smart ideas is super important, because it sets the overall direction and vision of any early-stage venture. However, the grit-and-hustle work of relentless action on those ideas is equally critical.

Execution is everything.

… but so are good ideas.

Spending all your time in your creative bat cave – thinking up ideas but never acting –  makes you a clueless dreamer. Likewise, an over zealous focus on execution can result in working on the wrong ideas, missing opportunities or not seeing the forest for the trees.

It’s not just as simple as doing a bit of both, either. Finding the right oscillation between strategy and execution is a delicate art.

Entrepreneurs drawn to strategic thinking often struggle to fully follow-through on their ideas: As soon as a project gets tough, they prematurely retreat to the comfort of the white board to re-think everything.

Execution rockstars – who tend to be hustle, sales or biz-dev superstars – can make any idea work through sheer force of will, but often end up keeping a bad business idea on life support far too long.

Sorting out your own individual balance between strategy and execution is a critical step in your entrepreneurial evolution. Matching that balance to your business partner exponentially multiples the challenge.

If you meet monthly to set out KPIs or targets, you have to be confident your partner is going to put her head down and execute. You have to both come up for air – to ask strategic should-we/shouldn’t-we questions – at the same time.

If you don’t ask yourself and your partner this question, you’ll forever be in different head-space: You’re trying to get things done, they’re wondering if you should both pivot. You’re re-thinking the narrative you present to customers/investors, they’re out there selling it.

Good partnerships thrive because of pre-framed, pre-decided structure. Set a schedule of top-level, bird’s-eye-view check ins. Then stick to it. Once a month, once a quarter… even once a week. However often you think it’s right for your business to question everything doesn’t really matter, so long as you’re both on the same page.

There’s nothing that breeds resentment faster than a business partner who burns days gazing into the “existential strategy void” while you’re making shit happen.

Make sure you have an agreement in place that when you’re not working together to ask the big questions, you’re both getting busy executing on the plan you set in the last strategy meeting.

7. How could change in your personal lives change your answers to these questions?

The questions we’ve asked so far have presupposed that your life maintains an equilibrium. In other words, they’ll serve you and your partner well, assuming nothing major changes for you. And assuming nothing major changes what you value.

The tricky thing about partnerships, especially successful and long term ones – and the most successful partnerships should last a long time – is that people change.

Over a long enough time period, the probably of massive personal-life changes happening… rapidly approaches 100%.

Think about the things that could occur in someones life that could shake them to their core, and cause them to – by necessity – reevaluate their partnership with you:

  • The birth of a child
  • The death of a loved one
  • Getting married
  • Getting divorced
  • Relocating
  • Mental illness
  • Chronic physical illness
  • Spiritual awakening

I’m not even kidding about that last one.

I’ve witnessed entrepreneurial partnerships in which one participant has had a bonafide (if subjective) spiritual experience, causing them to totally reorganize their values, to withdraw from the mission of entrepreneurial flourishing and to essentially live a monastic life.

This was kinda a curveball for their business partner to deal with.

The thing about the above list – by no means complete – is that each of these events has the power to re-write the motivational values humans are driven by, at the deepest levels of their psyche.

If your partner goes through one of these external, random, chaotic events… chances are their answers to the fundamental questions that govern your partnership will change. Sometimes they’ll change overnight.

The definition of success. Of failure. What is worth sustaining versus pulling the plug on. How to part ways. Questioning the high level strategy.

… it’s easy to see how any one external life event would change everything.

And it’s worth mentioning, this may not happen to your partner. It might happen to you.

If you find yourself sitting down to collaborate with someone on a vision that could carry you both years into the future, you need to have this discussion. You need to understand that what you’re about to embark on is closer to a “business marriage” than a simple project collaboration.

Nothing is “…not personal, only business”. Every entrepreneur operates – at their best and at their worst – as a central node in a complex web of social relationships.

Our personal lives matter. Your sleep last night, your spouse’s office drama, that conversation you had with your mom, your mortgage, your kid’s report card… it’s all part of the web. Your business isn’t separate from your life, it’s an organic plant-like thing that grows out of your life.

The same is true for your business partner.

The ultimate take-away from this article should be that you need to have these conversations, and that finally you need to assume that tremendous changes WILL happen. Changes will even happen to what you think is important or what you think is your “mission”.

And these changes aren’t your fault. They just… are.

The truth is that your partnership is made up of humans. And as humans, you cannot always escape chaos in your lives. Life is messy. You are messy.

Partnerships that fail to accept – and plan for – these truths are fragile. They crack under the first sign of all-too-human chaos.

By answering these questions and by preparing for your answers to inevitably change in ways you can’t imagine, your partnership gains the supple strength of flexibility.

You should have clear agreements, incentives that align and accountability. You should have you and your partner pinned down, on paper, as engines of value-creation within the business you’ve partner on.

And, you should also establish a mutual sense of each other’s humanity. Of the messy, wonderful vital life behind the suit-and-tie.

It’s your business partner’s humanity, after all, that makes them worth partnering with. 

  1. Hire the very best people 
  2. Make sure the company doesn’t run out of money 
  3. Articulate the vision and lead it 

The key word is “only”. This list is important because of everything that is not on it.

A startup founder should only spend their time doing these three things. 

Of course, this is ridiculously idealistic advice. 

In the real (messy) world, most founders start out doing almost everything else too. They have to. The definition of scrappiness is doing whatever it takes to move ahead. 

So non-technical founders will twiddle with code. They’ll try their hand at design. They’ll create marketing campaigns – even though they’ve never done it before. This is all totally okay. 

As soon as a founder raises serious money though, it’s time to become idealistic about the three golden rules. 

Venture capital exists to be deployed, to hire people who’re better at things than the founder. In fact, to hire the people who’re the best in the world… if you can get them. 

(And you need to get them!)

The founder’s job is to persuade and seduce that top talent – to sell them on the vision. Once they’re on board, you must lead those people in the right direction. That’s the vision part. Your one-on-ones, internal memos and town hall meetings are all tactics to do this. 

While all this is going on, you also have to manage your financial model, your burn rate and continue wooing investors in preparation for your next capital raise… the urgency of which has a habit of sneaking up on you. Making sure the company doesn’t run out of money is a daily to-do. 

Hiring. Money. Vision. 

You could write a book on each of the three rules. Many have.

And again, it’s what is not on this list that matters. 

The key is to remember that – if you’re building a venture-backed company – these three things aren’t just your north star. They’re you’re everything.

Any decision to deviate from these rules means you’re inserting yourself as a cog into the machine you’re trying to build. 

And that might be okay, but know that there is always a price. Usually it’s an execution slow-down in your race to get to market. 

Worth noting: These principles do not apply if you’re NOT running a venture-backed startup. 

So if you’re bootstrapping then you’re simply not in the business of using other people’s money to race for market share. You can and should go slower, get your hands dirtier and gently scale. 

After years of bootstrapping, you’ll wake up on a Saturday morning and realize you just spent your whole week doing just those three things. That’s when you know you’ve made it. You’re not bootstrapping anymore. 

Truly great businesses never fail to adhere to the simple principle that Tim O’Reilly coined:

Create more value than you capture.

The obvious examples are institutional: 

Microsoft changed the world with Gates’ vision to have “… a computer in every home”. The actual revenue the company captured from selling Windows licenses seems like a drop in an ocean compared to the value Microsoft’s customers created with the Windows product. 

Think about the businesses built. The efficiencies gained. The creativity that sprung forth from the personal computing revolution. 

Likewise, Apple put a computer in every pocket and nothing was ever the same again. 

The iPhone is consistently the most expensive smartphone out there, but a few hundred bucks every few years is a small price we pay for the benefit. Just think of any business that used ubiquitous mobile computing as a launch pad. 

(Think of all the money made by drivers, driving for ride-share apps, that couldn’t have existed without Steve Jobs walking on to that stage with the original iPhone.)

What Apple and Microsoft collect in revenue from these products is just a drop compared to the ocean of economic value the products ultimately create. 

For entrepreneurs, “Create more value than you capture” can serve as a powerful north star pointing to success.

Think of it as a guiding philosophy for optimal decision making in business. 

Example time…

Let’s say you’re pitching a B2B consulting contract. It’s valuable to think about your pricing as a fraction of the value that’ll be created by the impact your consulting has. 

Leaving enough “meat on the bone for the next guy” when setting fee structures is important. Playing the long game this way means that you yourself might be the next guy. When your customer experiences a 10x ROI from your services, they’re gonna be much more likely to re-hire you. 

Creating more value than you capture goes deeper than just pricing your services though. 

The aphorism to “sell pickaxes to the miners” is saying the same thing: When your product or service empowers others to succeed at mining – to create MORE value – you’re following the principle. 

Every technology revolution in history is a revolution precisely because of how much value it creates. The wheel. Steam power. Electricity. The telephone. These things all became tools that empowered other people to do incalculably significant things. 

Even if you’re not some patent-owning inventor-entrepreneur, you can create significantly more value than you capture…

The secret is to have a vision for your customer’s success, not just a vision for your own goals.

If you’re dedicated to creating more value than you capture, every person your business touches must be transformed. They must level up, in the direction they desire. 

Companies like Active Campaign (no affiliation but I use their stuff) are determined to turn their customers into marketing extraordinaries. To that effect, they don’t just sell software: They run workshops and host conferences. They teach. They want their customers to succeed because they know that when their customer is winning, the few hundred dollars a month for marketing automation is an afterthought. It’s a drop in the ocean of value. 

Startups focus on network effect, building market places, solving discoverability problems in the gig economy. The best startups all create economies of massively more value than the business at the center.
 
Dribbble.com (also no affiliation) helps some of the world’s best designers find the people who need their help. Those designers make magic (and money!) with the clients that discover them. Instead of clipping the ticket, instead of trying to insert a layer of inefficiency and charges between the customers and the vendors who serve them, Dribbble just charges a nominal monthly fee. It’s a total no brainer.  

Creating more value than you capture is a philosophy of generosity.

The principle holds true in the B2C world too. Most gyms just focus on optimizing for maximum fees, from a customer base who desperately don’t want to be there (and conveniently don’t show up). Meanwhile CrossFit builds a community of people dedicated to transformation, to showing up, to leaning in and learning. It really works, and people’s lives are changed – they become a better version of themselves – and the price of entry seems like nothing. 

Make Generosity your north star.

The opposite is a race to the bottom. It’s attempting to charge the biggest brokering fee you can get away with, for example.

(I once had an acquaintance who asked for a commission for referring his friend to me for therapy.)

The opposite of the “create more value than you capture” rule… is trying to inject as much inefficiency into transactions as you possibly can. The world of affiliate, referral marketing (more often than not) seeks to get between consumers and what they’re looking for, then charge for sending them where they wanted to go in the first place. And the customer ends up paying more. If any value is created, the amount is too close to what’s captured.

What you can do next:

Entrepreneurs have the opportunity to wake up to the idea that helping customers succeed massively – empowering them to go out and creating their own value – way beyond what they thought was possible… is the long term path to building extraordinary, universe-denting businesses. 

No matter what business model you’re building, it’s worth brainstorming what it’d look like – what it would require of you – to create ten times (or a hundred times!) more value for your customers than what they pay for.

Pursuing this philosophy has an uncanny way of making entrepreneurs filthy rich. It’s no accident that the companies that create vastly more value than they capture are the most prosperous on the planet. 

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