When Twitter went public in 2013, it was given a 24 billion dollar valuation -- 12 times higher than the New York Times.
Yet, both companies employed thousands of people. And both companies distributed news to millions of people. Even further, the New York Times earned $133M in 2012 while Twitter lost money.
How could this be?
The answer is cash flow. Business valuations are based on a company's earning potential in the future. Investors expect that Twitter will capture profits over the next decade while the newspaper days are declining.
The value of a business today is how much money it will make in the future.
From an economic perspective, the value of each person to a business is based on their potential to help the company in the long-term.
The further into the future -- or more durable -- your game plan: the greater the value of your cause.
Unfortunately, most people -- when planning a business or anything else in life -- rarely consider the value of their endeavor 10-15 years down the road. In our radically accelerating lives, it can feel impossible to plan more than a year or two ahead.
And this is exactly the dogma we're being taught by the business "gurus." React and respond to the market. Focus on quick growth. Don't have a plan.
Of this, Billionaire Peter Thiel writes in his book, Zero to One:
"The buzzwords of the moment call for building a 'lean startup' that can 'adapt' and 'evolve' to an ever-changing environment. Would-be entrepreneurs are told that nothing can be known in advance: we're supposed to listen to what customers say they want, make nothing more than a 'minimum viable product,' and iterate our way to success. But leanness is a methodology, not a goal. Iteration without a bold plan won't take you from zero to one."
Think For Yourself
According to Thiel, innovation does not happen by reacting to culture, movements, or societal expectations for how you should act. Rather, it occurs as people challenge these reflections of the status quo.
As Mark Twain has said, "Whenever you find yourself on the side of the majority, it is time to pause and reflect."
Rather than pursuing what's trendy or what's been successful for other people, the best thing you can do is think for yourself. That may also be the most difficult thing to do.
2. Avoid Competition
In order to think for yourself, you need to leave the idea of competition behind. Although we've been taught our whole lives that competition leads to success, in the real world it's detrimental. It disrupts intrinsic motivation and leads to narrow-sightedness.
In the book, Tribal Leadership, David Logan explains that most organizations have a culture of competition within. What this looks like is ladder-climbing, sucking up to superiors, and backstabbing to get ahead. Every man for himself.
Far fewer companies have a culture of collaboration within and competition without. Naturally, these companies, who focus on crushing their competitors do far better than those who are at war with themselves.
Yet, according to Logan, there are those magical instances, when an organization leaves competition altogether. They enter a universe of their own with limitless possibilities. They set the terms of the market because no one else can do what they do. The gap between themselves and anyone else continuously widens with no projection of that changing in the long-awaited future.
How Far Into The Future Does Your Plan Go?
Are you merely copying the strategies of other people?
Are you responding as quickly as you can to the market?
How will you measure your own life?
What is it you really want to do?
In life and in business, a person's value is what they are worth in the future -- in the long-term. Anyone can be cool for a day. Where will you be in 10 years?
Is the path you're on a response to yesterday's market? If it is, how will you know where you're going to be in 10 years?
Or, is the path you're on part of a grand plan you've devised and are committed to? As Seth Godin has said in Tribes, "The secret of leadership is simple: Do what you believe in. Paint a picture of the future. Go there. People will follow."