Question: What do you have in common with a European tech billionaire?
Answer: If you’re using my trademarked Strategy to Cash® process, it’s probably a lot more than you think.
This week I stumbled across an article about Niklas Zennström, a Swedish entrepreneur. I’d never heard of the guy before. Turns out he co-founded Skype in 2003, then sold it to eBay for US$2.6 billion in 2005. In 2009 he joined a group of investors that bought back a two-thirds share in Skype for $1.9 billion. When Skype was sold to Microsoft in 2011, Zennström pocketed a cool US$1 billion. So he knows how to build a major software business, and how to close multi-billion-dollar deals. Here’s his personal credo:
“Profit and purpose are mutually reinforcing, not mutually exclusive.”Niklas Zennström
Brilliant! Some people—even some business owners—see profit as a dirty word. As something to be ashamed of. But profit and purpose go hand-in-hand. Your profitability tests your clarity of purpose. Zero in on the right purpose for you and your business, execute well, and the profit will follow.
This, my friends, is the essence of Strategy to Cash. It’s about setting a clear vision for your business, hiring the right people, and using the right data to measure (and predict) your success. Strategy to Cash brings your purpose and profit into alignment.
Keeping Purpose and Profit Aligned
Of course, this is not a one-time deal. Setting your strategy means thinking no more than one year ahead. COVID taught us how much can change in twelve months. So it’s important to review your strategy annually. You could do it now, or at the end of the financial year, or on the anniversary of your founding. But if it’s over twelve months since you reviewed your strategy, you’d best tackle it straight away. Time’s a-slipping.
It’s Not Just a Box-Ticking Exercise
There’s no point reviewing your strategy if you’re going to dust off last year’s work, change the font and fix any typos, then tuck it back into your bottom drawer. Your strategy is a living document. If it’s no longer meeting your needs, tear it up and start again from scratch. Your strategy must address your current business challenges and opportunities.
Here are the questions to ask when resetting your strategy for the next twelve months:
- What’s my purpose? Why am I running this business, as opposed to the millions of different ways I could be spending my life?
- Where do I want my business to be in twelve months’ time? Specifically:
- how will my business have changed?
- how will I measure my success?
- Do I have the people I need to bring my vision to life?
- Do I have the data I need to measure my success?
Involve Your Partners
When you’re revisioning your business for the coming year, make sure you bring your business partners along for the ride. They can make or break you, so they need to be part of the conversation. Talk with your spouse, too. Gain their buy-in. And if it’s just the two of you, work with your trusted business advisor to clarify your strategy. Three heads are always better than two.
Here’s a key takeaway from the Zennström article. In 2000, he and his partner created Kazaa, a peer-to-peer music-sharing program. To keep it legal they tried to negotiate rights with the big record labels, who refused to play ball. Instead, the record labels sued. After the dust settled, Niklas and his partner sold Kazaa for a rock-bottom price.
But they didn’t fold their tent. Instead, they built Skype on top of the software they’d previously developed. Rather than giving up, they went for broke. They stayed true to their purpose—to develop great software in Northern Europe, not in the USA.
You’ve done this. Everyone in business has experienced, at some point, a crisis of faith. But you pushed through. Like Zennström, you’re the hero of your own story.
There’s a second lesson in this tale, too. European venture capitalists were reluctant to invest in Skype. Then Silicon Valley came knocking on their door. Californian investors offered to pony up the cash—provided Skype moved Stateside.
By this time, Zennström had built a crack team of developers, spread between Sweden, London and Estonia. To him, talent meant more than the American money. He turned his suitors down.
So any time you place a premium on your people, rather than a short-term sugar hit of cash, you’re thinking like a billionaire. Not any billionaire, to be sure, but a billionaire who grasps the link between purpose, people and profit.
Grow Your Profits
It doesn’t cost you anything to think like a billionaire. Maybe just a small attitude adjustment, if necessary—which I’m more than willing to supply!
Seriously, Strategy to Cash isn’t going to turn the proprietors of a small family business into billionaires. But it will give you a laser-like focus on what matters most. You’ll find your purpose. You’ll build a strong team. You’ll seek out the data you need to grow your market share, your cash flow, and your profits.
At the end of your journey you’ll look back and know you’ve created value—for your customers, your staff, and yourself. So when you’re ready to start thinking like a billionaire, let me know. Together, we can make it happen.