Niklas Göke

The #1 Trait of Successful Entrepreneurs | by Niklas Göke | Jul, 2020

Think long-term, do what others can’t

Image via Wallpaperup

Steve Jobs wanted to build the iPad in 1983. Speaking to a small audience at the International Design Conference in Aspen, he said:

“Apple’s strategy is really simple. We want to put an incredibly great computer in a book that you can carry around with you and learn how to use in 20 minutes.”

Steve was hoping to build this magical device within the decade and sell it for under $1,000. He even wanted it to have internet access before the internet was a thing: “When you have portable computers with radios stuck in them, you’ll be walking around Aspen and retrieve your messages.”

Steve admitted the technology wasn’t there yet, but he hoped it would be soon. Ultimately, he had to wait 27 years to see his vision come to life. Thankfully, he had the patience to do so.

In 2010, at his last big keynote, Steve introduced the iPad. It had the power of a computer, an internet connection, and you could learn how to use it in 20 minutes. It even cost less than half of what he’d hoped for: $499. Since then, Apple has sold over 400 million iPads — and made $200 billion.

In another interview in 1995, Steve stressed the importance of long-term thinking:

“To do anything of magnitude takes at least five years, more likely seven or eight. Fortunately, my training has been in doing things that take a long time. I was at Apple 10 years. I’m a long-term kind of person. I have been trained to think in units of time that are measured in several years.”

Long-term thinking is the number one trait of successful entrepreneurs.

Sam Altman grew Y Combinator from a small VC fund into the world’s number one startup accelerator funding hundreds of companies each year.

Before, he launched and sold his own startup, an early location-based social network. Today, he’s the CEO of OpenAI, building net-positive artificial intelligence for the world.

In a blog post about success, Altman argues that it’s important to “compound yourself.” You have to think long-term to not “get bogged down in linear opportunities:”

I am willing to take as much time as needed between projects to find my next thing. But I always want it to be a project that, if successful, will make the rest of my career look like a footnote.

I decided to work for myself right after college because I knew I wanted to work for myself eventually. Sure, the first few years sucked financially, but eventually, I started doubling my income year after year. In a normal job, that’s impossible.

Even if I can’t keep up the pace, the last few years of my career will still benefit from these big early jumps. “The furthest out years are the most important,” Sam says. He thinks the biggest competitive advantage is “long-term thinking with a broad view of how different systems are going to come together.”

“In a world where almost no one takes a truly long-term view, the market richly rewards those who do.”

— Sam Altman

Derek Sivers sold his company for $20 million in cash. The next day, he launched a new business. He came up with a name, a plan, a website, and even announced it to his followers.

A few days later, he asked himself: “Why am I running?” It would have been easy to restart the same cycle he’d just gone through. But then, Derek chose to stop. He needed to pause. To think.

Ten years later, Derek is still thinking. He never returned to the business because it wasn’t what he really wanted to do. Today, he writes books, a popular blog, learns new things, and enjoys the quiet life with his kid.

In one of his posts, he explains how we lock ourselves into bad decisions:

Imagine that I’m going to auction a $100 bill. The bidding starts at $1.

The regular rules of auctions apply with one change: if you are the second-highest bidder, you don’t get the $100 bill — but you still have to pay what you bid. OK? Go.

I get bids for $1, $2, $3. Why not? Someone might win $100 for only $3! But the bids keep coming.

Once they get to $99, the person offering $98 thinks, “Uh oh. The other person isn’t backing down.” They raise their bid to $100, so as not to be the second-highest bidder and lose it all.

But now the person offering $99 raises their bid to $101. Better to lose only $1 than $99, right? Soon they’re offering me well over $100 to buy a $100 bill, just hoping the other person quits first.

The problem, Derek says, is that most people won’t think through this game in advance. It’s easy to see the short-term opportunity, but if you play out the next steps in your head, you’ll see how it’ll likely end badly.

I started many projects that I nipped in the bud only days later because I realized: This is not a train I want to get on. It’ll take me where I don’t want to go.

As an entrepreneur, it’s hard to decide when to focus and when to diversify, but most of the time, slowing down, thinking, and not jumping headfirst into new opportunities is the right answer.

Those opportunities will always keep coming. Your time and energy won’t.

“Before you start something, think of the ways it could end. Sometimes the smart choice is to say no to the whole game.”

— Derek Sivers

Everyone always uses Elon Musk as an example of a bold risk-taker. While it’s true that he put his entire fortune into three companies with low odds of success, that a.) wasn’t the plan and b.) came from a rational place.

On the other hand, most people think Warren Buffett is a conservative, careful investor, when in fact, he too shoulders billions of dollars in risk every day.

Buffett’s investing approach is called concentrated diversification. That sounds like a paradox, but it’s actually just a way of describing his high but not extreme tolerance for risk: Over 50% of Buffett’s portfolio is tied up in just three stocks: Apple, Bank of America, and Coca Cola. He has 40+ more holdings which make up the rest.

You can’t achieve outsized returns if you’re not willing to take on outsized risk. You have to bet on things other people aren’t willing to bet on, and by betting hard on only a few — but not just one — stocks, Buffett diversifies while staying intensely focused on what he think will be a few big winners.

Without long-term thinking, you won’t have the stomach to take on such risks. “What you need is emotional stability,” he told Forbes in 2010. “You have to be able to think independently, and when you come to a conclusion you have to really not care what other people say.”

Focusing on one company, one career path, a few investments is risky. You’re giving up safety in hopes of bigger returns. To take more risks today, you need to really believe in your long-term vision — but if you do, it can pay off.

“You only have to do a very few things right in your life so long as you don’t do too many things wrong.”

— Warren Buffett

Long-term thinking is the number one trait of successful entrepreneurs.

They’re not worried about timelines or when their vision will come into existence. They keep their eyes on the future. They look into the distance, guess where the world is headed, and then build what people will want at scale once they understand what’s possible.

You can’t show the world how to do the impossible if all you work with is what you see around you today. You must think ahead.

Whatever you want for yourself, your business, and others, the more long-term you think, the sooner you’ll get it. It’s ironic — but so was talking about “a computer in your pocket” when most people weren’t even sure they’d want one in their house.

Nelson Mandela spent 27 years in prison. Afterwards, he became South Africa’s first Black president. He too had to practice long-term thinking. He captured the importance of it differently than Steve Jobs did, but his argument is just as convincing: “It always seems impossible until it’s done.”

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