Forget Cash: What Will You Really Make At Your Startup?

Forget Cash: What Will You Really Make At Your Startup?

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A version of this article previously appeared in the Wall Street Journal.

I consistently remind my UC Santa Barbara startup students that for most people, money is not a sustaining motivator. They might start a venture with the money as a primary goal, but money alone generally isn’t an adequate catalyst. For this reason, I encourage my young entrepreneurs to fully understand what they will “make” at their venture, beyond monetary riches.

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Poet Slamming

Before he became a four-time National Poet Slam champion, Taylor Mali was a public school teacher for nine years. In the powerful poetry performance embedded below, he describes a dinner party during his teaching days in which a smug lawyer asked him, “Come on, be honest, what do you make?” If you haven’t seen Taylor in action, I encourage you check it out.

Mr. Mali’s reply is classic: (paraphrased), “You want to know what I make? I make kids work harder than they ever thought they could. I make parents see their children for who they are and who they can be. I make kids wonder. I make them question. Teachers make a G– damn difference, now what about you?” If you haven’t seen his animated response to this crass question, it is well worth watching.

Teachers, like entrepreneurs, work in a heightened emotional state. Dealing with their precocious students and demanding parents can cause a single day to be filled with poignant highs and unnerving lows. Those teachers who focus on what they really “make,” rather than their paychecks, sail through their days (relatively) emotionally unscathed.

Passionate Problems

I am often asked, “John, how do I identify a great startup opportunity?” My response is a math problem: (Passion + Solvable) * Sufficient Reward = Great Venture. Simply identify a problem you are passionate about solving and determine if it will yield you (and your team) a meaningful reward.

Such compensation should not be viewed solely in monetary terms. For instance, at Computer Motion (acquired by Intuitive Surgical), we obtained significant gratification by helping establish the medical robotics industry. Nearly twenty years later, over 10,000 robotically assisted surgeries are performed each day, with better patient outcomes.

The creation of GoToMeeting (acquired by Citrix) allowed busy executives to reduce their travel time while remaining productive and seeing more of their kids’ soccer games and school plays. GoToMyPC allowed working parents to spend more time at home and to come home at a decent time and finish up their workday after their kids were in bed. In their own little way, these products enriched the lives of millions of people, which is a legacy that remains of immense value to me.

Higher Purpose

When you attack problems you are passionate about solving, it is easy to identify what you will “make” from your startup. At Computer Motion, we made it possible for millions of people to have shorter hospital stays and better surgical outcomes. We made minimally invasive cardiac surgery a reality. We made the distance between a doctor and a patient irrelevant with the creation of telepresence surgery.

The higher purpose of redefining the efficacy of existing surgical procedures and enabling new minimally invasive approaches significantly modulated our emotional ups and downs, of which there were plenty. The feedback from doctors, patients and their families was the fuel that kept us pushing forward. We made many things that motivated us besides the money that eventually flowed into our bank accounts when we took the company public and later sold it to Intuitive Surgical

Ask yourself a similar question to that posed by the tacky lawyer, “Come on, be honest, what will I make at my startup?” If you can quickly answer this question in non-monetary terms, be assured that you will be buffeted against the emotional vagaries of startup life because you are making a G– damn difference.

Note: I finished this article it in the wilds of Baja, in a surf shack off the electrical grid, courtesy of GoalZero, who supplied me with their Sherpa100 Solar Kit.

The kit is light enough to throw in your backpack and simple to set up. It isn’t designed for multi-day backpacking (too heavy), but if you’re ever relatively stationary off the grid and still need to do some work, the Sherpa100 will do the trick. It will be my constant companion, alongside my tequila shot glass and Pepto-Bismol tablets, on upcoming Baja trips.

Follow my startup-oriented  Twitter feed here: @johngreathouse. I promise I will never Tweet about that killer burrito I just ate – just startup stuff.

Image:  Wikipedia

 

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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  • Matt Dubberley

    Great points. I have a Santa Barbara based, startup (LighterBro) and it does not quite have the same altruistic properties mentioned. I do, however, find endless motivation from the epic challenge involved in making a successful business in a highly competitive field. When unconstrained by corporate systems, you are free to massively leverage your unbound creativity and problem solving skills. I don’t know yet how sustaining this motivation is, but so far it is a lot more so than money.

  • John Greathouse

    Well said Matt. The key is finding a sustainable motivation. For most people, money seldom satisfies this criteria in the long term.

  • EntrprenueringIsAFad

    The trouble is that unless you have a rich uncle, no one will fund your passion. Heck, even if you show excellent return on investment, most good ideas can’t get the capital they need. For college students who have no idea how the world works, you can sell them wishful thinking.

  • BryanK

    bit cynical aren’t you mate?

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