Don't follow the money, follow billions of dollars of money

2 founder friends whom I respect a lot have recently told me to “follow the money” (in the context of my startup's growth).?

While I think it’s a good opener for a conversation about building startups, I think it’s not a great advice on its own if it ends there.

Whether we perceive startups as a high-risk high-reward asset class or as a way to pump your worldviews and beliefs into the world at a global scale and create societal change, or both, you can’t just follow the money.?

Floodgate capital has some content series on “Intelligent growth” (there's a youtube video and also a slide deck, happy to share if you're interested) in which they talk about growth vs intelligent growth. They present some frameworks and examples and terminologies to show the difference. For every 100 times that I hear "follow the money", there's one time that I hear the term "value generation and capturing", and less times a conversation about the different levels of value gen and capturing.

I think that conversation is often skipped in the startup world.

Between "Follow the money" vs "Maximise X and Y, in generating $X in value and capturing Y% of X", I'd always wanna have a conversation on the latter (whether I'm on the giving or receiving end of advice).

If I wanna be a bit more crude, I'd say a startup conversation is high quality if it's talking about maximising the X and Y, and it's shallow if it's about following the money.

1. A startup can follow the money and die an un-compounding death (a death that doesn't compound the growth of the adjacent organisations, the future growth of your shareholders, as well as your future ventures), assuming you're playing the long game and are gonna keep building until you solve the problem you care to solve, or the wealth you wanna acquire, or whatever goal or desire it is you're trying to satisfy).
2. A startup can follow the money and get to an unattractive growth rate and ARR and get trapped into it for good and never be able to meaningfully multiply it.
3. A startup can also follow the money and become massively valuable and useful, or die a compounding death (where your next company's growth will be a step change compared to the one(s) that died, the adjacent organisations to you will be better because of what you showed was possible, and your shareholders' luck will increase because of the path you opened that you couldn't continue).

I'm exclusively interested in the 3rd subset of "follow the money", and I think the first 2 should be explicitly called out in some disclaimer or something.

Many startups die because they don't understand the distinction between these 3 and just brute force making money at all costs. It's sad.

Another angle to this is what a founder is optimising for through his/her startup.

There’s no shame in building a profitable business that remains small, but some problems have binary solutions, and some problems are so massive, they require solutions that will eventually be massive.

In other words, some problems can only be solved with billions of dollars in leverage, and you cannot solve them with anything less than that.

No NGOs, governments, or activists will solve the world's hardest unsolved problem in education, human health, justice, transportation, and environment.

Tech companies with billions of dollars in leverage are the only way, in the world's current state, to solve these problems.

More billionaires with worldviews that can improve the world on those levels is therefore a net positive thing.

Therefore, I would like to acquire or access billions of dollars worth of leverage, through tech entrepreneurship, and fix the problems that I care about that I have been severely negatively affected by (mostly in education and helping billions of people make better decisions that increase their quality of life).

It's not a matter of arrogance, ego or entitlement, but a matter of will.

Many people have done it, why the hell not me?

Since 2016 I‘ve been waking up every single day wanting that, including on my hardest days when members of my family had their worst days.

I've been telling myself “the only way to fix this amount of dysfunction and suffering in the world is to override the education system that takes 20 years of people’s lives and doesn’t do anything useful with it to help them make more meaningful lives."

Depression is at a record high, therapy visits are at a record high, reproduction is too low, potential for violence is at a record high, pet population is at a record high, globalisation is collapsing and zero-sum mindset is resurfacing. These are fucked up problems that can be solved but are not getting a critical mass of talented people and capital, because the world's smartest people are still busy capturing human attention to maximise ad clicks.

That same talent, company building, business model design, attention management, product development and growth know-how can and must be applied to these problems, and it won't automatically.

Some people need to be crazy and aggressive and obsessive and driven enough to get the money, and build intelligent organisations that can keep learning and keep iterating until these problems are solved profitably, at scale.

I don’t claim to “know” how to become a billionaire. I’m a 28 year old, pre product market fit, first time founder. I’m not in the business of knowing, but in the business of learning.

I believe you can learn exactly what you choose to learn, over a period of time that you commit. You can also compound yourself, to learn exponentially faster.

"Are you an elitist?"

No, everyone with any earning is respectable. I can personally live a decent life with $50k-100k/year in the developed world (I don't currently) and <$20k in the undeveloped world (I think the term “developing world” is a joke, blog post for another day maybe).?

As a person I don't need a billion bucks or even a million bucks for my lifestyle. I know it because my entire family's combined monthly earning is hardly US$500 and they're fine.

My life philosophy is:

1. Survive and grow as a person, and
2. Contribute to the world maximally

In summary, a startup, whether seen as an asset class or an instrument for change, or both, can't just follow the money. It has to follow billions of dollars of money.

Peace