It took me a while to fully realize the value of something my company achieved years ago, and continues to savor today. It’s one of our greatest quiet advantages, full stop. It’s not something you hear much about in business circles. In fact, I can’t remember the last time I heard anyone spend much time on the topic, or even bring it up in conversation, on a conference stage, or behind a podcast mic. There is, however, lots of discussion about achievement in business. A company can achieve product market fit, operational efficiency, influence, revenue goals, or, ultimately — and hopefully — profitability. But I’m not taking about those things. Those are the obvious things, the common talking points. And to those you can add the vanity metrics of achievement — social media followers, traffic, views, impressions, open rates, press mentions, gross this or gross that. All those are what they are, but they aren’t where it’s at. What I’m talking about is optionality. Achieving optionality is where it’s at. Optionality is a hearty mix of profit margin, small size, independence, attitude, and freedom. You’ve got to have all of it to have optionality. If a board is calling the shots, you don’t have much optionality. If your margins are thin, or non-existent, you don’t have much optionality. If the public owns a piece, you don’t have much optionality. If you rely on investment to pay the bills, you don't have much optionality. If you’re too big to change direction quickly, you don’t have much optionality. And if you’re afraid to speak your mind and stake your point of view, you don’t have much optionality. Optionality lets you do things no one would give you permission to do. It lets you write excellent software and give it away for free if you choose. It lets you do things that don’t make sense in the current climate, but will long-term. It lets you be early while eventually catches up. Optionality is ecstasy. It’s making it up as you go, without making excuses. It’s openly changing your mind without having to save face. Optionality is equanimity, the corporate equivalent of enlightenment. So, entrepreneurs, ditch the bullshit. Abandon growth-at-all-costs. Reject conventional metrics. Scorn hollow acceptance. Instead, hunt for optionality. It's freedom. It's power. It's everything you crave, wrapped in a single, potent package. Chase it relentlessly. And when you get it, don’t let go.
Fabrice Talbot
1mo
Brilliant! Optionality seems to be the opposite of what most Silicon Valley entrepreneurs aspire to achieve. After they raise money and give away (part of the) control of their company, it is gone. Optionality is also a "luxury" that very few can afford. In many instances, being nimble does not cut it. You need fuel ($$$) to propel the engine. What you achieved at 37Signals is truly unique and should be studied in biz schools 😀
Good point Jason, and this would be the ideal whenever possible. I do think you are much slower to build your product and get it to market when you bootstrap. Depending on your personal runway you might give up prematurely if you don't have the $ needed. As long as you know the game you are playing the VC route offers $ at the expense of freedom. I am bootstrapped but knowing what I want to try but not being able because my capacity is limited is frustrating.
Sam DuRegger
1mo
Love this. Always have to remind myself that VC money and boards, are just another way to say, “boss”. It’s not better than the corporate life, and possibly worse as there is less stability and more pressure (as responsibility not diffused).
That is what I am striving for while I venture myself in business uncharted waters. Building products, having fun & enjoying the freedom
Ilya Gogin
1mo
You left me no option but to agree 👍
It is because of people like you that post these kind of things that I am still around here. Thank you
Zack Steven
1mo
“Optionality is ecstasy.” And comparison is the thief of joy 🎯
Jörg Kreß
1mo
Nice way to put it. I will refer to this post in the future. This optionality happens much more often for companies than they realise, but due to the other factors, goes to waste. While it might sound contradictory, I would add: don't waste moments of optionality. Doing something when it's optional to do usually has a bigger chance of success than doing it when you *have to do it* because of external factors, which usually leads to haphazard execution. These moments of optionality pay dividends, until optionality becomes more of a permanent thing as in your case.
Tracy Cheung
1mo
I would warrant a guess that companies with more optionality might also be more likely to make big bets on / investments in things like climate change or social impact programs. These kids of things don’t necessarily pencil out perfectly in the short term but can add value in a big way in the long term
First-hire product designer, 10+ years as player/coach | 26 LinkedIn Recommendations
1moThis is a great system-level view of running a business. I heard you talk about profit (net not gross), founder ownership, appropriateness of scale - so important. As someone who didn't go to business school and is learning about business financials later in life - it's easy to buy into the growth machine hype, or X raise on Y round, or just measuring success by revenue. And in learning via owning a small business, it's a visceral lesson that the ways most people talk about success in the media or social platforms isn't actual success. It's a hell of thing to have millions in revenue but negative profit. Not just to know it, but to feel it happening and having to right the ship via painful choices. I wish the idea of vanity metrics vs. real metrics was the first thing I learned in my journey - and not something I had to stumble onto via lots of mistakes. Probably not an uncommon way to this knowledge ha Thanks for writing this