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Whether your an employee or the founder of your own company, there's one thing everyone should know that's at the foundations of every great business.
Why does your company exist?
The “why” of a company is a combination of your mission statement and the core beliefs/values that get infused into the everyday culture.
If your company lacks these two components you're fighting an uphill battle to differentiate yourself from you competitors.
It’s extremely difficult to:
- Conserve resources
- Unify business offers
- Have a clear sense of direction
- Engage and rally your employees/supporters
In venture capital, every investor creates their own investment thesis. This thesis guides their decisions on which companies to invest in and shapes the ways they partner with startups to grow. Some funds have multiple theses like a16z because they invest across multiple industries (growth, enterprise, bio tech, American dynamism, etc.).
When I worked as a Summer Associate in venture capital our investment thesis was centered around "corporate intelligence". The value we were trying to enable in the world was built around the idea that companies had a responsibility to store, analyze, and secure their data. This determined EVERY decision we made. We only invested in companies that were making those processes more efficient for other businesses.
That thesis led me to the current startup I work for Paradox, who's mission is "To revolutionize recruiting through the power of artificial intelligence. We believe in the power of jobs. Jobs have the power to change lives and to change companies." At our core this is our "why".
17 million people have watched Simon Sinek's TED Talk where he talks about the golden circle. Good entrepreneurs and leaders understand this is critical to success.
Your "why" is what people buy into, how you deliver value, and the guide to all the choices you make in business. As Simon says (haha I had to), it will act as a filter to what you do and how you do it -- a north star. Why helps you figure out what fits with your company and what doesn't based on the reason it exist.
The why behind your what
Storytelling
Storytelling sells your product/service. Today, stories are cultural currency driving the “valuation” of a brand. How you write those stories is your understanding of why you are the answer to peoples pains. The missing piece for them to reach their goals. An answer they’ve been searching for.
When I explain what my role at Paradox is, I always tell it in a story.
Everyone has had a terrible experience searching for jobs at one point or another. Ghosted after the initial application. Confused on how to best prepare. Hundreds of questions you lack answers on.
Immediately people take interest in me building products to automate processes in hiring and want to gain an insight into the recruiting process. With jobs at the center of the story, I’ve already sold the product (although they’re not buyers usually) because people hope they get to engage with our software the next time they apply to a position.
Creating value
At the heart of a business they all need to make money, yet people think that’s their only purpose. Give value to someone (whatever function this may come through) and in return get money.
You can view business this way if you want. When you do though, it becomes a lot harder to actually make money. You’re doing business with other humans — just like you — that value things differently than that.
Do you want to repeatedly give money to a business that doesn’t create value for you? Doesn’t dive a deeper impact in your live? Views everything as a transaction? My guess is no… Most people don’t choose to be friends with others that elicit these qualities. How they spend their money is no different.
Guide products/services
Blockbuster was once a thriving business. On Friday, the store was alive with people planning out their night ahead. Blockbuster's '“why” was “To be the global leader in rentable home entertainment by providing outstanding service, selection, convenience and value.”
Now, there’s only one left in existence. Shocker. They neglected to determine “why” they were providing people movies and entertainment. Blockbuster focused on only renting (a transactional exchange) and failed to ask how they could offer a better service to their customers consuming entertainment. Blockbuster could not predict the shift in people’s lifestyle preferences. Their service of providing rentable home entertainment was outdated quickly by Netflix.
Generating intrinsic motivation
In every hero’s journey there’s a time when they are faced with a struggle. The team is done in the big game. Businesses are no different. We saw the trend of quiet quitting take over this past year because people were burnt out. They weren’t inspired to struggle. Employees at these companies had nothing to struggle for — no common cause they were working towards.
Crafting a compelling why for your company
You can quickly Google most companies why. The best answers for why a company exist have the same anatomy. Spotify’s why is “To unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by these creators”. If you look at it there’s really three parts it can be divided into:
1) Purpose and goal
The purpose of Spotify is “To unlock the potential of human creativity…” which undeniably comes across as you listen to the founder talk about the origins of the company. People resonate with this inside and outside the company. They’re willing to struggle for that cause.
It’s led Spotify to become a household name that users pay a monthly subscription to without thinking — earning them billions of dollars in the process.
2) The plan to achieve it
Their plan to unlock creative potential is “giving a million creative artists the opportunity to live off their art”. Each employee is working to kill off the idea of the starving artist every day — most of which have had aspirations to be a musician themselves.
When artist are getting paid, they can focus on their work, instead of trying to make ends meet. Raising the quality of their art and the quantity of creative output.
3) What sets the company apart
Any company can build a platform for musicians and podcasters. It’s as easy as collecting and categorizing RSS feeds. Spotify has a built a moat. No company can be Spotify because they give “billions of fans the opportunity to enjoy and be inspired by these creators.”
If you’re a Spotify user, you know this to be true.
- Music recommendations
- Spotify wrapped
- Curated playlist
They are support their fans in not only enjoying their current music but finding new musicians and podcasters to be inspired from.
So I challenge you to reevaluate, why does your company exist today? Most businesses don’t know the answer to this other than for the purpose of making money. Set yourself apart from the rest by digging into the value you want to provide the world.
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