Why system wins, not passion

Intro

A little about me, recently I’ve been infatuated with building habits.

As someone who loves self-development and pragmatic lifestyle, I currently

• run and lead the accelerator program at 500 Global Korea, a full-time commitment
• invest into 4-5 companies a year, as a part of 500’s investment team
• run a B2B HR company targeting US founders, post-revenue, on the side
• run a monthly blog for 800 subscribers and a daily journal letter for +100 friends and families
• read 2-3 books a month
• cook home food (a longtime Costco member ??) and train 4-5 times a week

I started betting more on building habits when I started hybrid working after moving to a remote city called Songdo, 2.5 hrs away from Seoul.

Here, self-discipline was everything. There was no one keeping me accountable at home 2-3 days out of a week.

There is a saying that "some are born to thrive in remote working settings, some just not". After three months of evolving my habits into a system, I realized that I happen to be the the former that thrives in remote work.

I have built myself a system of cross-connected micro and macro habits.

Building your lifestyle ground up, is in many facets, similar to building your own startup. At first, you have nothing but yourself.

There is only an idea or a personal goal and your mind to make this into a reality. But once you start building habits and as you morph habits into a system, you have a platform, a healthy startup that is self-sustainable. ?

Build on a system

I often encounter founders that think a successful startup require one of the followings.

• Talent
• Luck
• Grit
• Or a mix of these.

Well, I want to claim that success is in building a system. A system that serves as the strategy,? the bedrock that exposes you to many opportunities.

With the help of the famous author and a cartoonist, Scott Adam, I will share Three Insights I learned so far.?

1. Being consistent makes you scientific.?

Doing an activity on a regular basis for a long period time is, in itself, a scientific approach to finding something novel. You may fail or win at it, but when you’re doing something consistently the result and the insights you get will be very close to a scientific conclusion.

Therefore, being consistent is one of the best proxies for new knowledges being discovered.

For example, I noticed a pattern that I tend to go to the bathroom after my morning workouts. This is because I drink a tonne of water. Hence, I learnt that my 2.5 hr bus ride to work could be more enjoyable if I limit my workout drinks to a bottle.

At this stage, I am probably safe to say that drinking a lot of water causes frequent toilet visits. Although not perfect, having consistency allows us to find truths.

This is why as an individual or a startup founder, we should strive to be consistent. By doing so, we are more likely to learn about something novel.

Few applications for startups:

• Interviewing customers with the similar set of questions to find repeating problems.
• Doing performance marketing within the same sets of conditions (day, time, budget, messaging, audience, etc.) to see when conversion is the highest.
• Trying out different coding times that require creativity-programming as opposed to something manual (bug-fixes, tickets, etc.)
• Interviewing founders that have been in your business for more than 3 years to learn what they have consistently failed or succeeded.

Few applications for individuals:

• Doing productivity activities (writing, interviewing, planning) in the similar times and days for maximized efficiencies.
• Doing your workout routines on the same times/days to see how your performance improves over time.
• Re-visiting your emotional cycles by analyzing which physiological or lifestyle patterns, such as hunger, insomnia, stress, lack of workouts, alcohol, etc., occurred before certain emotions kicked in.

By being consistent, you can be assured that the conclusion you got is more scientifically true.

2. Power is in being simple.

Being simple and concise is a skill needed in every profession and lifestyle.

When I began writing this blog series, there was more content being deleted and edited from the original than what I had published in the end. I’d bombard myself with excerpts from news articles, other blogs, and chat-GPT prompts.

But the more I wrote, the more I became concise in the message.

The more ideal example for this is in how capitalism rules the world.

A multiple upon a multiple of complications that include environmental, economic, and human-derived factors affect all businesses but what puts them all in the same page is in their profit.

How much money does the business make?

This simplicity in the system is what makes capitalism one of the strongest driving forces in the world.?

Capitalism caters for the performance indicators of all executives, engineers and sales team by the single criteria, which is whether or not the business is being profitable.

Profitability serves as the one and only criteria to move the needle for a company and an economy. Profitability tells the CEO to either R&D or focus on sales, hire or fire employees, shut down a business or start a new business, M&A or get acquired.

In the same way how businesses thrive on having one simple goal, that is being profitable, so does any individual founder.

Of the startups we decide not to fund, rarely is the founder’s intelligence the reason for rejection. It’s much more often the opposite.

Startup founders that:

• are a little over ambitious that they think they can build something that will kill Facebook from start
• have built too complicated business models assuming that they are the exception to the 9 repeating unicorn business models or
• think that they can manage multiple product lines for various customers' needs

are the number one reasons why we decide not to fund them.

This is the case for an individual too.

Most often, the most effective way to reach a goal is by focusing your mind on one goal at a time. Having a grandeur plan to accomplish many dreams is daunting and off-putting. It gives you a way out to escape from one goal to the other.

3. Passion and success - causality or correlation?

People think that you need passion to succeed in a startup. Is this true?

To answer this enigma, we should look at this problem in the eyes of an investor or a banker - a person who is considering to give you money.?

When I meet founders as an investor, I try to look at which one came first. Passion or business momentum?

Is the founder giving off too much passion compared to where the business is at now? Or is the momentum of business giving the founder passion which I feel.?

We only bet on the latter case. I’d much rather invest in a business that’s already doing well, that is already making money, and thus the founder can’t help himself being excited. You can tell if someone is faking an excitement pretty well.?

It rarely is the case, as you meet Series B+ founders, that you encounter founders who show mismatched passion to where their business is.

By Series B+, you are moving according to a plan, budget, and strategy/guiding principle. You can’t afford to drive your business with feelings.

As a startup, you’ll only want to leverage passion to deliver something to get you out of a trouble or to achieve a goal overly ambitious for a noble reason.

For a founder to keep pushing with passion is simply not sustainable when you are 5-6 years into a business.

At this stage, you need to be a controlled furnace that burns strongly when needed and cools down quickly, running as energy-efficiently as possible.?

This is why you rarely see billionaires and millionaires overtly joyful over a win or overtly depressed when they lose. At that stage, they are pacemakers as well as a well-trained runner, knowing how and when to run fast and slow down.?

Conclusion?

I am not discounting the role of passion.

Passion is almost always a good proxy to whether or not you have founder-market-fit or founder-product-fit.?

When I began playing basketball in 5th grade, I knew that bouncing the ball while having the whole stage watching me, was something I am passionate about.

I played basketball through college. Even now, basketball is the only team sport that I enjoy playing.?

Passion is a by-product. It’s the by-product of the skill that you found to be better than others.

Passion is a by-product of a thriving business. It’s the by-product given off by the founder when things go well.?

If you want to be successful, know that passion is not a prerequisite of success. If your business is not genuinely doing well, I dare to say,

"forget about passion being any proxy of an early stage startup".

Instead, we should focus on building a system. Systems give us a scientific approach to finding truths. Hence, business or an individual, rejecting or accepting a hypothesis should come from a system.?

Nietzsche famously said,

What doesn’t kill you only makes you stronger.

This is a philosophy worth holding onto in your startup journey. We can go on to say that what doesn’t kill us (hence failures) are the very bedrocks of a success. You hence need a system to extract accurate signs of success in your failures.

We should think of failure as a resource and system as a straw. Failures are a resource filled with nutrients. You then need a system to extract the goods from it. Just like how every fertile soil thrives on manure, your success lives on top of your system of learnings and failures.?

DISCLAIMER

This represents author's entirely personal viewpoint and does not represent the opinions of any associated institution, organization, or individual. It is not intended to offer legal or investment advice, and should not be used as a foundation for making investment decisions or as guidance in that regard. Any references to specific companies or investments are purely for informational purposes and should not be construed as investment recommendations.

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