This is the single most important question that entrepreneurs should ask themselves if they are planning to start their own venture. The rest of the specifics – how, when, and where, will follow later.
A Harvard Business Review article titled The Questions Every Entrepreneur Must Ask mentions that the first step for any entrepreneur should be Clarification of Goals – Where do I Want to Go? After the goals are defined, strategy planning and strategy execution are the next steps. If the entrepreneur does not have clarity of purpose, the likelihood of the failure of the business is high.
Take example of Google co-founders Larry Page and Sergey Brin. Today, Google makes hundreds of products, but their original purpose of relentless search for better answers and making information universally accessible and useful for everyone continues to be at the core of everything they do.
When entrepreneurs know their ‘why’, it acts as a constant reminder of what they are trying to accomplish. It serves as their guiding light or a compass when the going gets rough. So, a purpose such as ‘To become the number one company in the world’ is very ambiguous. What is defining the number one here – is it revenues, customers, products or quality?
The purpose has to be precise and concise. That is what can pilot the entrepreneurs towards thinking a strategy that is actionable and measurable. The purpose of starting a business stems from what pain points of the society do entrepreneurs want to address. It is about developing a product or a service that can provide solutions to the existing problems of people. Whether it makes money or not is secondary to the purpose. The key lies in why they want to do what they want to do. As the startup grows, they should not waver from the core objective with which they had started.
The purpose also sets the foundation of the vision that drives the entrepreneurs and motivates them to push their limits. It gives them an ambition, a reason to achieve what they have set their mind on. It puts their ventures in a league distinctly apart from their competitors and earns customer loyalty over a period of time.
This is also proven in a case study called The Business Case of Purpose conducted by Harvard Business Review Analytics Services and Ernst & Young Beacon Institute. According to this case study, purpose is a powerful, yet an underutilized tool. If the purpose is clear and collectively shared by the organization, it can result into successful innovation and transformation change, deliver consistent revenue growth, increase employee satisfaction; and drive customer loyalty.
Mark Zuckerberg, the man behind Facebook’s success has always ensured that its people and processes aligned to its purpose – give people the power to build community and bring the world closer together. And, it has really worked. Today, it has more than 2 billion monthly users.
The companies which don’t get their purpose right may taste success for a few years, but in the long run, their doomsday may be inevitable. In a few cases, pressures from competition, investors and other stakeholders, poor strategy and decision-making as well as obsession to get results overpowers the fact why the company was founded in the first place. Yahoo and AOL, which were once considered ‘everything internet’ failed because their purpose of doing business failed them.
Purpose is the foundation, heart and beacon of a venture. It is a basic metric to measure success. If someone asks an entrepreneur why he is doing something and he can’t answer, it clearly indicates the lack of purpose.
Simon Sinek, the TED speaker explains it perfectly in his book Start With Why:
People don’t buy WHAT you do, they buy WHY you do it.
Now, if you still don’t know your ‘why’, it isn’t too late to discover it.
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