There's a fun aspect to having coached and spent time with so many thousands of entrepreneurs over the past 40 years, and that's watching how the ideology has changed. We all understand the tremendous technological revolution that businesses have gone through in the past two decades, but the same can be said for the entrepreneurs that start up new companies.
One thing I see more of now than ever?
"Passion" being used as a justification for opening a business.
Over and over again.
"I'm passionate about this."
"I'm following my passion."
Ideological stuff like that sounds great, but no matter how passionate you are about a business, that business still has to make money. As important as passion is to my own teachings, I still have to caution new business owners that passion won't clean the office and "likes" won't pay the light bill.
Substance is what pays the bills. Which begs the question: should you build a company by following your passion, or should you build a company that pays your bills? Of course, that's a difficult one to answer, but not as difficult as you might think.
Today it seems every newly minted entrepreneur is consumed with passion, yet oftentimes, a little short on substance. Since the failure rates of small business have remained virtually unchanged for decades -- nearly 80 percent within five years -- I don't think passion is the difference maker. You still need a solid foundation.
When you set out to build a company, passion is a critical part of the design -- your dream, vision, purpose, and even mission all need to resonate with it. But despite the fact that you're passionate about your company, many others -- including your customers -- might not be. Saving the rainforest, helping orphans, lowering carbon emissions -- they're all important to a lot of people, but altruism often stops at a certain price point.
Don't believe me? Look in the parking lot.
We know big vehicles use more fossil fuels, yet we continue to drive them, either because of the status they denote or the comfort they provide. At the same time, we know that too much sugar in our diet can cause all sorts of health problems, yet we line up every day for a beverage based loosely on coffee that is filled with sugar, then we drink carbonated sodas the rest of the day.
Passion may fuel you, but does it fuel enough of your customers to allow you to make a viable business from it? Chances are, it doesn't. You can still create outlets in your business for the things that you feel are important to act on, but be honest about it.
We've all seen the celebrity chef whose restaurant is a failure. Or the socially conscious online business that is being propped up by other money, since it can't generate enough income to survive on its own.
If you choose to follow your passion, then I say, go for it! But with this caveat: understand that many of your customers don't share your passion and won't pay for it. If you can follow your passion and provide a great product at a great price, then you should. Design your company to compliment your passion and appeal to the widest segment of customers possible. You'll have the chance to pursue your passions while reaching out to many, many more people than you ever could have if you segmented down to the very few that truly share your enthusiasm and are willing to pay for it.