Building a Startup Company, Why Money Shouldn’t Be Your Motivation?
If we were motivated by money, we would have sold the company a long time ago and ended up on a beach — Larry Page — Google Co-Founder.
There are so many ways to make quick money but building a startup isn’t one of them. If you want to make quick money you better invest in your career and look for better-paying jobs. I can guarantee you, there is nothing wrong with that. Startup life isn’t for everyone. Startup business will push you to your limits before even you smell cash leave aside touching it. You can drive a fancy car and build a nice house very quickly if you opt to be an investment banker, an accountant etc. rather than a Chief Exhausted Officer (CEO) of a broke startup company.
From its original definition, the startup is the action or process of setting something in motion — Merriam-Webster definition. The definition explains why earning money can’t be the at the core of the startup operations. When you are at the startup stage basically what you are doing is building a foundation (setting your business in motion) of your business. Earning money shouldn’t be in any way part of the process rather it should be the outcome of the process.
The core characteristics of a startup business include; being newly established, entrepreneurial in nature, innovative, scalable and viable business model. Whether it generates money or not that is the output of the process, business viability is beyond immediately making money. It is possible to have a seasonal business which generates a lot of money (revenue) and in few months after the hype stops, the product collapse and eventually you go out of the market.
So why money shouldn’t be your motivation? Few things I have learned as an entrepreneur when it comes to the relationship between people who are motivated by money and building startups.
On Choosing Co-Founders | People who are motivated by money always choose wrong startups co-founder for two big reasons; believing they can control them (when the cash come) or they can pump in cash to the business (they can earn money from day one).
On Staying Focus | People who are motivated by money they can lose focus on the core business very easy because of a temporary source of income. You can’t build a long-term vision with them.
On Company Growth | People who are motivated by money they never want to reinvest back into the business, obsessed with material things and how they look outside. They will invest in their personal look rather than scaling the business.
On Funding | People who are motivated by money always the team breaks after the initial round of investment from an investor (AI/VC) or from an alternative source of financing (grants, loans etc). Underfunding is bad for them and overfunding is even worse.
On Leadership | People who are motivated by money are obsessed with who signs the cheque? who leads the team? how much are we splitting? etc. They don’t spend enough time thinking how can we grow? where should we reinvest ? or how did we get this all money?
On Building Business Relationships | People who are motivated by money. They don’t care about relationships or what the future entails. For them making quick money is everything. There is no such thing as customer relations. The relationship stops after they receive cash which is extremely bad for a startup.
When you are motivated by money, you will slowly start to suffer what we call “loyalty crisis”, thinking everyone working or partnering with you at some point of time will either still your money or idea. The “loyalty crisis” disease tends to limit your thinking. Preventing you from thinking about further growth in your business instead, it encourages you spending too much time protecting the small thing you already have. You will be ready to own 90 percent of zero-net worth company rather than 30 percent of a million dollar business.
Always remember very few businesses were built from a massive injection of cash, most of the successful businesses were forged by royalty (building long lasting relationships), discipline (financial and non-financial) and commitment (passion towards what you do). Money is always the output.
- Joyce Msigwa — Co-Founder Meltores Professionals | for the interesting conversations we have been having around this.
- My team at — Sahara Ventures | for trying to build a relationship which is not based on how much we are making.