How to pick a mission worth building a company around

1 The bottom line

A mission worth building around names a need you serve and puts profit downstream of it. It matters because it filters your hires, settles your trade-offs and keeps you going when money alone would not.

2 Key takeaways

• State your purpose as what you give people, and treat profit as the result. A company that serves first earns money as a by-product, and every decision gets a clear direction.
  • Henry Ford, Ford Motor Company15:05 wrote that "money comes naturally as a result of service," and the word service appears 129 times in his book.
  • David Packard, Hewlett-Packard0:05 asked whether HP's products offered something unique and whether lives improved because of them. A no meant failure.
• Pick a mission you truly believe in. Belief sells to customers and draws the people who will do the hard work.
  • Phil Knight, Nike20:21 could not write orders fast enough at Pacific Northwest track meets, because buyers sensed he believed in the shoes.
  • Elon Musk and SpaceX26:30 used a mission of building cities on other planets to attract engineers who would never work for just another launch company.
• Aim at something bigger than your company, and at something that would not happen without you. A larger aim gives you room to grow and makes the work matter.
  • Akio Morita, Sony2:00 chose to make Japan, not Sony, known for quality.
  • Elon Musk1:17:49 says mass market electric cars were inevitable, but becoming a spacefaring civilization is not.
• Turn the mission into ranked rules that settle trade-offs. A purpose only matters when it decides a hard case.
  • Jim Sinegal and Saul Price, Costco1:32:27 ranked their code: obey the law, then members, employees, suppliers and shareholders.
  • Ingvar Kamprad, IKEA4:55 wrote that IKEA decided "once and for all to side with the many."
• Hold the mission for decades by repeating it. Repetition makes it real to staff, customers and investors.
  • Jeff Bezos, Amazon4:00 attached his 1997 letter to every shareholder letter for the next 23 years.
  • Ingvar Kamprad, IKEA4:55 gave essentially the same sermon on his Testament for 43 straight years.

When the mission is that clear, prioritization becomes automatic.

Elon Musk and Gwynne Shotwell, SpaceX26:30

2.1 Start from a need, not from profit

The missions that lasted began with what people needed, and money followed.

• Define the business as service to people. Henry Ford, Ford Motor Company15:05
  • Ford argued that a producer prospers only by serving people. One who serves himself may get by for a while, but only by accident.
  • He said finance got too much attention and service too little, which reversed the natural order in which money follows work.
  • Phil Knight, Nike58:40 said business is no more about making money than being human is about making blood. Money is a basic process that enables higher aims.
  • Packard's cycle was that contribution produced success, and success funded more contribution. He left nearly all of his $5.6 billion estate to charity David Packard, Hewlett-Packard0:05.
• Start technology from a human need, never the reverse. Soichiro Honda, Honda43:50
  • Honda's basic R&D principle was respect for humanity. People want something, and technology is the means to get it.
  • He kept researchers enthusiastic, because he said the quality of development depends on what is in people's brains, not just money and headcount.
  • He repeatedly said people should use the machine and not be used by it. With that approach he believed Honda could create demand and markets.
• Make customer satisfaction the first rule. Sam Walton, Walmart30:55
  • Walton reminded employees daily of the golden rule: the customer is always right, and if not, see rule one.
  • He told stores to replace returned shoes cheerfully and throw in a pair of socks for the hassle.
  • He borrowed the satisfaction-before-profit idea from J.C. Penney.
  • Packard told managers that customer satisfaction second to none was the only acceptable goal, and that leaders who could not deliver it would be replaced David Packard, Hewlett-Packard1:41.

2.2 Pick a mission you believe in, for the right motive

Your reason for building shapes what you build, so test it before you start.

• Check your motive first. Steve Jobs, NeXT13:49
  • Jobs started NeXT partly for revenge on Apple. Before he had a product or revenue, he ran Wall Street Journal ads taking shots at Apple.
  • He also poached Apple co-founders, and Apple sued him.
  • Older and wiser, he said "the older I get, the more I'm convinced that motives make so much difference."
• Choose work you would believe in without selling it. Phil Knight, Nike20:21
  • Knight failed at selling encyclopedias and felt dead inside selling mutual funds. Selling shoes he believed in was different.
  • He concluded it was not selling at all: "Belief is irresistible."
  • In his 70s and 80s he told people in their mid-20s to seek a calling, not a job or career, because a calling makes fatigue easier to bear Phil Knight, Nike1:02:54.
• Let the mission come from something personal. Amancio Ortega, Inditex2:30
  • Ortega heard a grocer refuse his mother more credit. He decided "this will never happen to my mother again," quit school and took a job in a shirt store.
  • He kept saying for decades that we are all born for a mission, and he was still working at 88.
  • John D. Rockefeller, Standard Oil17:23 believed the power to make money was a gift from God, to be used for mankind. He celebrated "job day" every September 26 of his life.
• Define success as pride in the work. Steve Jobs, Apple1:24:53
  • Jobs and Jony Ive agreed their measure was not share price or computers sold. It was whether they felt proud of what they had designed and built.
  • The host ties this to Jobs' father, who taught him as a boy to take pride in the quality of what you make.

2.3 Aim bigger than the company

A mission larger than your firm attracts talent and leaves room to grow.

• Choose a mission bigger than your own brand. Akio Morita, Sony2:00
  • After the war Japan was seen as a maker of cheap copies. Morita said Japan, not just Sony, would be known for quality.
  • Jeff Bezos cited this as a model for how Amazon frames being the most customer-centric company.
  • Google's 1999 mission, to organize the world's information and make it universally accessible and useful, was neither too broad nor too narrow. It attracted talent and pointed straight at monetizing search Larry Page and Sergey Brin, Google1:47:39.
• Work on what would not happen without you. Elon Musk, SpaceX and Tesla12:01
  • After PayPal, Musk said he wanted to make mankind a multiplanetary civilization. People who knew him said he starts with a mission and backfills the financial case later.
  • He started a rocket company at 30 after being ousted from two startups. He borrowed old engine manuals from experts to learn rocketry.
  • He also says technology only improves if many people work very hard on it Elon Musk1:17:49.
• Start with the opportunity in front of you while you aim higher. Akio Morita, Sony26:00
  • Ibuka designed a shortwave adapter that attached to any standard radio. It sold well and kept the company going.
  • The founders said "merely building radios was not our idea of the way to fulfill these ideas." They aimed to be innovators.
• Let the mission point at the big bet. Larry Page, Google9:26
  • In 2000 Page said the ultimate search engine would understand everything on the web and give you the right thing. He saw artificial intelligence as the ultimate version of Google.
  • That conviction explains the blank check Alan Eustace got to hire deep learning talent, and the purchases of DNN Research and DeepMind.

2.4 Make the mission pick a side

A mission that names who you serve and what you will not do is one people can act on.

• Name the people you serve and what you give them. Ingvar Kamprad, IKEA34:55
  • In 1949 Kamprad told struggling farmers that middlemen made everything too expensive. He offered goods at the dealer's own buying price.
  • Competitors sold on selection and availability. He sold on price.
  • His 1976 Testament made this the first commandment: a better everyday life for the many people.
  • Henry Ford, Ford Motor Company49:01 promised a car for the great multitude, priced so that no man on a good salary could be unable to own one. He had to invent mass production, and he later sold 15 million Model Ts.
• Make quality your edge and refuse to be a copy. Walt Disney, The Walt Disney Company43:35
  • Disney believed quality was his only real advantage. After Steamboat Willie he refused to sell his studio, because he wanted to be the king of animation, not another producer.
  • He kept reinvesting every dollar, and more, into the product.
  • Packard and Hewlett did not want to be "a me too company merely copying products already on the market." HP's computer sales went from nothing to $20 billion in 1994 on differentiated products David Packard, Hewlett-Packard36:06.
• Refuse tactics that treat customers badly. Saul Price and Jim Sinegal, Costco30:41
  • Price would not use loss leaders, because that means treating customers like they are stupid. Competitors mark up other goods to fat margins to pay for them.
  • He and Sinegal would not sell anything without making money on it, which keeps prices honest across the whole store.
  • The one exception is the $1.50 hot dog and soda, unchanged for 47 years.

2.5 Turn it into hiring and trade-off rules

A mission earns its place when it decides who you hire and what you give up.

• Hire missionaries and let the mission sort them. Jeff Bezos, Amazon55:50
  • Bezos began Kindle from a vision of every book in any language in under 60 seconds, though Amazon had never built hardware.
  • He hired missionary hardware engineers and learned the skill rather than shrink the vision.
  • A skills-forward company asks what else it can do with what it already does well, and eventually its skills become outmoded. Kindle began more than four years before the 2008 letter.
  • At SpaceX a clear mission made prioritization automatic. In 2008 it had funds for exactly one more Falcon 1 attempt, and flight 4 succeeded Elon Musk and Gwynne Shotwell, SpaceX26:30.
• Rank who you serve, in writing. Jim Sinegal and Saul Price, Costco1:32:27
  • Sinegal's code descends from Price's FedMart priorities, and the order matters.
  • Shareholders are not on the list, because Sinegal argued that doing the four things in order is how you reward them.
  • In the mid 80s the Washington State Liquor Control Board looked for any reason to deny a beer and wine permit and found nothing.
  • A $10,000 investment at the 1985 IPO would be worth about $3.3 million today, before dividends.
• Hold the line when it costs you. Sol Price, Price Club31:40
  • Price opened a pharmacy inside a discount store. Pharmacy groups pressured wholesalers not to deliver, and his pharmacist Wayne Mallerie got death threats and a rock through his window.
  • He kept going because lower prices were better for customers.
  • Price also refused to sign a Fedmart mortgage with a clause requiring segregated bathrooms, and the lender dropped it Sol Price, Fedmart30:10.
  • Costco still sells prescription drugs cheaper than almost all competitors.

2.6 Keep it for decades, and change it only on purpose

The firms that last pick a few principles and repeat them, and widen the mission only when they must.

• Pick a handful of principles and organize the company around them. Jeff Bezos, Amazon4:00
  • His first letter, "It's all about the long term," set out market leadership, cash flow, bold bets and customer focus.
  • He kept restating the same ideas, because "repetition is persuasive."
  • Google's mission has stood unchanged since the first press release after the 1999 financing Larry Page and Sergey Brin, Google1:47:39.
• When you hit your goal, set the next mission before you drift. Ed Catmull, Pixar34:51
  • After Toy Story, a huge hit with a record IPO, Catmull felt hollow. He gave himself a new job: keeping talented people happy and keeping the complexities of collaboration from undoing them.
  • That mission still drove him decades later. Toy Story opened a week before the biggest IPO of 1995.
• Widen the mission when the old one caps your growth. Jensen Huang, Nvidia1:55:30
  • Early on Huang talked about making graphics a storytelling medium. Now Nvidia says that wherever there is a CPU, there is something to accelerate.
  • Data center revenue grew to about equal gaming, at over $10.5 billion a year.
• Know that giving up on a tactic is not giving up on the mission. Phil Knight, Nike1:02:54
  • Knight called people who preach never giving up charlatans, since knowing when to try something else can be genius.
  • He also warned that the better innovators get, the bigger the bull's-eye on their backs.

2.7 Where they differ

Founders agree the mission comes before money, but they differ on how soon the business must work and how hard to push for the mission.

• Business case first, or mission first.
  • Elon Musk12:01 picks the mission and finds a way to make it work financially afterward.
  • Henry Ford49:01 and David Packard0:05 started from a product that served people, so profit was a natural result. The mission-first route fits large, capital-heavy bets.
  • Bernard Arnault57:55 stated at 40 that he wanted LVMH to be the biggest luxury goods group in the world. That aim is about scale, not about a need served.
• How hard to push people for the mission.
  • Ray Kroc, McDonald's42:57 said he believed in God, family and McDonald's, and in the office the order was reversed. He fired or pushed out his closest partner Harry Sonneborn and longtime executive June Martino.
  • David Packard1:41 was benevolent but demanded performance, and replaced leaders who could not deliver customer satisfaction.
• Mission and hard dealing.
  • John D. Rockefeller17:23 saw wealth and philanthropy as intertwined, yet gave nothing away in deals. A purpose can drive hard bargaining as well as generosity, so check what it actually asks of you.
• Mission moves that are brand bets, not sales plays.
  • Nike backed Colin Kaepernick even though football sells few shoes and he was no longer playing. It scrapped its other planned campaigns for 2018 and changed its media plan in every geography and sport Phil Knight and Bill Bowerman, Nike3:02:59.
  • The hosts say it came from creative gut feel about the values of the customers Nike wants. Costco's loss-leader ban, by contrast, is a rule that holds even when no one is watching.