The sad reality is that a business cannot be fun, educational, and profitable all at once. Pick boring or grinding over losing money. Christopher Morley observed, “There are three ingredients in the good life: learning, earning and yearning,” but you don’t have to get all three from your business. Without earning you don’t have a business.
Bud Caddell: Want to Do, Paid To Do, and Do Well
Bud Caddell‘s 2009 blog post I’ve been working at start-ups and small businesses since I was 14 years old outlines three key challenges you need to surmount to make your startup or small business viable:
- You have to be paid for what you do (or you don’t have a business).
- You have to do your work well (or your competition will overwhelm you).
- You have to want to do the work so that you will practice to get better at it.
He summarized it in an interesting Venn Diagram:
Bud Caddell’s Trifecta: Do What You Want To Do, Can Be Paid For, And Can Do Well.
Buy a print.
He outlines how the lack of any one of these elements create three separate challenges:
- We can’t determine how to make enough money from the things we want to do, and do really well.
Learn To Monetize
- We’ve found things we want to do, and can be paid for, but we’re not the best game in town.
Learn To Do This Better: Mediocrity is not a sustainable strategy.
- We’ve come across things people want us to do, that we do well (or at least better than the competition) that we really don’t want to do.
Learn To Say No
If You Do Something Well at a Profit, Learn to Love It
I am not sure I agree with his third point. I think if you can do something well and make a profit it may be better to learn to love it. Or love how it provides support for your family, your hobbies and other activities and causes you have a passion for.
“The test of a vocation is the love of the drudgery it involves.”
Logan Pearsall Smith
Scott Adams: Choose Systems Over Goals and Passion
Scott Adams makes this same point in a 2013 Wall Street Journal article “Secret of My Success: Failure”
You often hear them say that you should “follow your passion.” That sounds perfectly reasonable the first time you hear it. Passion will presumably give you high energy, high resistance to rejection and high determination. Passionate people are more persuasive, too. Those are all good things, right?
Here’s the counterargument: When I was a commercial loan officer for a large bank, my boss taught us that you should never make a loan to someone who is following his passion. For example, you don’t want to give money to a sports enthusiast who is starting a sports store to pursue his passion for all things sporty. That guy is a bad bet, passion and all. He’s in business for the wrong reason.
My boss, who had been a commercial lender for over 30 years, said that the best loan customer is someone who has no passion whatsoever, just a desire to work hard at something that looks good on a spreadsheet. Maybe the loan customer wants to start a dry-cleaning store or invest in a fast-food franchise—boring stuff. That’s the person you bet on. You want the grinder, not the guy who loves his job.
For most people, it’s easy to be passionate about things that are working out, and that distorts our impression of the importance of passion. I’ve been involved in several dozen business ventures over the course of my life, and each one made me excited at the start. You might even call it passion.
The ones that didn’t work out—and that would be most of them—slowly drained my passion as they failed. The few that worked became more exciting as they succeeded.
Schedule, Cost, Quality vs. Fun, Educational, Lucrative
There is a rule of thumb that you can only maximize two aspects of any project: shortest schedule, highest quality (or performance), and lowest cost. You can also pick solutions that over some trade-off between the three.
This is the second thing that is wrong with Caddell’s chart: the center region of desirable, lucrative, and excellent performance may not be achievable.
One framing that puts a slight spin on this for entrepreneurs: I will often ask if they are enjoying themselves and learning a lot. Many times they will say yes and I will suggest they are leaving money on the table. First of all your most educational experiences–sometimes referred to as mistakes–are often painful. The Roman proverb is haec quae nocent docent which translates as “those things which hurt also teach” or “what injures instructs.”
Your actual choices are:
- A Grind, Educational, and Lucrative — making a lot of mistakes but persevering profitably.
- Enjoyable, Predictable, and Lucrative — executing well proven recipes you have worked out.
- Fun, Educational, and Unprofitable–a hobby.
The secret to scaling a business is to make the core part boring and predictable. You can still do R&D 20-30% of your time but the core of the business needs to well understood. Consider for example visiting a doctor for a medical condition who runs some tests and comes back very excited: “this is one of the most interesting cases that I have had in a while.” I have been in the room when a doctor shared his excitement over learning new medical facts and I was moved to ask if there was someone else we could talk to who might be bored by this medical condition because he had seen it in all of its variations so many times it was no longer that exciting for him.
The flip side of this, especially for bright people who are afraid of boredom and those of us with attention deficit disorder who are always chasing bright and shiny objects, is that if you spend even half your time doing research and development it’s hard to build a business. A business only becomes scalable when it’s well defined and somewhat boring. Then you can commit to service level agreements and can commit to outcomes and results. You can always continue to improve, but exploration is not the sole focus.
Related Articles and Blog Posts
- Scott Adams: “Goals are For Losers and Passion is Bull“
- Tony Schwartz: Notice the Good, Cultivate Good Habits, Slow Down, and Do the Right Thing
- Tony Schwartz’s Principles For Fiercely Complex Times