In the last few meetings with entrepreneurs, I’ve noticed I’ve been consistently asking about whether they have a world domination plan. But I think my request is being misinterpreted; of course, I have not helped since I haven’t clarified what I’m looking for either.
I am reminded of when I ran User Experience at Yahoo and when we interviewed people, we would give them a test. This usually was an hour to create a new design for Yahoo Profiles. We would give them some paper, pencils or pens, and then leave them alone for an hour. After an hour, we’d come back and see what they came up with.
It’s pretty amazing the variance of output that we’d see. Some people would have maybe one piece of paper done. Others would have a whole tornado of paper and sketches on them and on the white boards on the walls. The way people “fail” this test if they came up with just one answer and were adamant about that being the only perfect answer. That’s not the point; the point is that it’s pretty impossible to come up with a fantastic solution in one hour. We gave them the test to illustrate their design process. If they had a great process and could walk us through their thinking, then we knew they could get a fantastic solution if given enough time. Those with a poor process would typically come up with just one answer and settle on that, thinking it was final.
This is the same for when I ask for the world domination plan. It would be nice to get “the answer” but I think it’s pretty unrealistic given the twists and turns that startups go through. Some give me “the answer”, which is fine if it’s in the context of something they’re thinking about. Sometimes, though, there is a certainty in their belief that is scary to me; it almost shows an inflexibility in their thinking that they are shooting for this solution and you sense that they’re going to bulldog their way to this answer even if it is the wrong answer.
It’s also pretty amazing to see how many entrepreneurs don’t even think about it. I ask them and there is a blank look on their faces. This is a problem. While that doesn’t mean a decent business couldn’t be built out of their idea, it could mean that it only grows to a certain point and then…that’s it. Great for the employees of the company who get paid every day, great for the founders who work at the company and own lots of it and also get paid, but not so great for us investors whose money is locked in the equity of the company.
As an investor, I would much prefer that you have the frame of mind that you WILL take over the world in whatever area you’re operating in and you’re always thinking about how that would happen. I don’t want to see a blank face like it was a new concept. I just want to hear that you are thinking about it either all the time or at least it’s floating in the back of your brain most of the time.
Because it’s then that us investors know that we have the best chance of getting our money back and hopefully making some on top of it. Smaller companies can be great companies, but many reach some midpoint where they may not be acquired because their potential seems limited and acquirers are also looking for big opportunities. Thus, our exit potential is also limited. When you’re on a trajectory through luck and planning to world domination, then your options are much greater because everyone chases you and wants your world dominating characteristics added to their own. You could even go IPO – but not if you’re not big enough.
World dominating companies are the ones we want to be involved in and it starts with the right mindset. Remember it’s not “the answer” that I’m looking for, but rather that right frame of mind and that you’re noodling on it day and night as you’re building your company.