It’s common knowledge that more than 95% of startups fail and that going on to build the next Facebook is the exception, not the rule. And while such statements accurately portray the realities for the financial returns for entrepreneurs and their investors, they miss out on other forms of return on investment.
So how should a startup, its entrepreneurial team and its investors define success beyond financial returns?
Sure, we want our business pursuits to result in a financial windfall for our investors, our teams and for ourselves, but as the metrics indicate, doing so is far from guaranteed. Through my own entrepreneurial endeavors and my work with other entrepreneurs as a mentor, advisor and sounding-board, I’ve come across three non-financial returns that entrepreneurs also point towards as definers of success:
Intellectual Stimulation: Entrepreneurs have a thirst for knowledge and the experience of building a startup from the ground up teaches us a wide array of skills, ranging from product and customer development, raising capital, recruiting, sales, managing teams and exploring exit opportunities.
Entrepreneurs who aren’t successful in building a sustainable, profitable, or acquirable business oftentimes point to their learning experiences as another form of return on their time spent. As one entrepreneur recently confided in me, “I’ve long defined success as how much money I can make myself and my investors but I’ve recently learned to also factor in my own improvements as a professional as an important takeaway from any business venture.”
As the Founder and CEO of This App Saves Lives, I’m building a for-profit business which also incorporates a social mission that’s near and dear to my heart. And while I’m invigorated by the prospect of building a powerful and financially successful company, I know that our social impact will long be a meaningful form of return for me personally.
Giving Back: The ultimate destination of achieving an exit opportunity is but a small fraction of the overall time we spend building our businesses. It’s in the journey where we oftentimes give back to those around us. For some, this can be the creation of meaningful job opportunities for our colleagues whereas for others it’s about creating rewarding experiences for our customers. Oftentimes we’re so caught up in reaching the destination that we lose sight of the value we provide to others in the journey that is scaling a startup. And in a personal instance, one investor in my prior company hired another investor in that same business and the two went on to scale a business together. Who would have thought that our company would play matchmaker amongst our investors?!
Personal Brand Building: If professional life is about filling up our toolkit with as many skills and experiences as possible, then each entrepreneurial endeavor also serves the purpose of building our personal brands. Each pursuit further solidifies our professional reputation in the community and enables us to build a brand for ourselves that fellow entrepreneurs, investors and other professionals can look to when contemplating working with us. We might not have hit a financial grand-slam on the latest venture, but we’ve enhanced our personal brands and strengthened our reputation in the business community by virtue of our experiences.
Hitting a financial homerun is always an important goal but there are also other forms of meaningful returns that entrepreneurs can look to as definers of success.
How do you define success?