What is the purpose of your startup?
Yes, really. This is just about the most important strategic question you can ask yourself.
All too often, in my experience, when you ask this question you get strange looks or one-dimensional responses like "We’re here to give a superior return to our shareholders" or "We aim to be a leading player in industry Y".
Let me say at the outset that making money is not your purpose. Sure, it’s necessary for survival but it isn’t a reason for existing. After all, we all need to breathe oxygen to live but that doesn’t make oxygen the meaning of life.
Your purpose should (i) involve a meaningful contribution to society (ii) be enduring, and (iii) a constant challenge.
A valid purpose is something that you can never complete, but are always striving to make progress towards. It’s something that doesn’t go in and out of fashion, and can’t be disrupted by new technology or other changes. And it is worthy – it’s about helping people and bringing a sense of meaning to your organisation.
Why does all this purpose stuff matter?
As the saying goes, if you don’t stand for something, you’ll fall for everything!
Knowing your purpose gives you direction in an ever-changing world. As a startup, you tend to have more opportunities than you could possibly pursue. Knowing why you exist helps you set a clear vision for the future, and decide what you will do and what you will deliberately choose not to do.
The process of refining your purpose also forces you to think through important issues. If your purpose really is XYZ, then why are you doing activity A, and not doing activity B? How will you measure your success?
And for a startup, articulating your purpose challenges you to think about building a company, not just launching a product or running a project. Sure, you started with a good idea or a specific ambition, but now take that and think through what the purpose of your startup really is. Why should everyone be glad it exists?
What’s a good example of a company’s purpose?
I like to refer to Sony, the electronics company. Sony’s purpose could be summarised as to enrich lives through technology. This is as valid today as it was when Sony was founded in post-war Japan as a small radio repair shop. Sony’s purpose also provides some boundaries that guide its decision-making, with an explicit mention of technology and an implied focus on consumers.
Another example is a startup I helped launch: RedBubble, an online art gallery and creative community. Its purpose is to inspire people through creative art. It does this by helping artists sell their work online, in an environment where sales and comments encourage them to continue and improve. And the amazing artwork on display inspires viewers to spend time on the site, buy something for their home, or tap into their own creative passions.
…so, what’s your purpose?