Tom Webster, writing and speaking

Operating For The Now

Added on by Tom Webster.

IStock 000000045660XSmallLast weekend I attended an "unconference" devoted to analytics, so the halls were packed with smart people. One of the talks I went to was by a friend of mine who is getting a very promising startup off the ground, and they've scored some great early wins with both customers and investors. During his talk (which was, appropriately enough, about getting a startup off the ground) he was peppered with questions from a few people who clearly expressed doubts about his company's long-term viability. This was a pretty tech-savvy crowd, so a lot of the questions he was fielding were of the "well, you know that this technology is going away in five years" variety, or of the "everyone manages their cookies individually per site, am I right?" variety. In other words, they were questions about the future from people who see themselves as ahead of the curve.

We all like to think of ourselves as somewhat ahead of the curve, I suppose. At least, we don't want to be perceived as "behind" the curve. My friend, the CEO of this startup, fielded the questions with grace and reserve. His best response: "Well, I can't worry about five years from now - I have to operate the company today." He's dead right. In an era where, five years ago, the likes of YouTube and Facebook were hobbies, and Twitter wasn't even on the drawing board, a five-year plan and two bucks will get you a grande coffee. You have to operate for the present, not the future.

I've noted before in this space that people who are "ahead of the curve" often believe that eventually, the rest of the world catches up - in other words, they're just a little bit early on something that is inevitable. This sentiment suffers from a good deal of survivor bias. Most of the time, being ahead of the curve doesn't mean being early on an inevitability; it just means being wrong. We often make examples from the exceptions and turn them into business fables.

The corollary of this are the people who try to convince you that because SMS is going away in five years (it isn't) or terrestrial radio will cease to exist in ten (it won't) that eventually what you are doing now will be valueless or doomed to fail. Maybe it will. What my startup-CEO friend was reminding everyone (myself included) was that none of this matters in the day-to-day management of the company. You have to plan for the future - but you have to operate for today. Operating for today puts cash in your coffers, and buys you both the time and the ability to adapt to the future. Operating for the future, on the other hand, leads to financial distress. Nothing is worse than seeing the future you predicted five years ago actually come to fruition, but being unable to capitalize upon it because you were ahead of your time.

The best example: Netflix. Yes, Netflix is now in the position it is in because they planned better than Blockbuster to embrace and adapt to the future of online video. Never forget, however, what Netflix did this very day (and every day) to finance those plans - they shipped a metric pantload of silver discs through the U.S. Postal Service. By operating for today, they are financially sound enough to adapt to tomorrow. Blockbuster isn't a moribund brand because Netflix beat them to online movie distribution - Netflix beat them with plastic discs and mailers. RedBox is doing it with plastic discs and a vending machine. You can plan all you want for tomorrow, but you have to avoid financial distress today to put yourself in the right position to act on those plans when the time is right.

My friend's lesson really hit home for me - I, too, can have a tendency to drift into the future, when everything we do now is obsolete, and the next, new thing takes over. Those voices are important - every company needs them. A great CEO keeps those voices close, uses them to plan for the future, and then makes those plans possible by operating for the now.