How To Plan With Ambition And Make Change Happen

 

As the famous Bill Gates once said: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten."

In this article I will talk about this misconception, that so many of us have, especially when it comes to innovation and change: Why do we always set unrealistic short-term goals but on the other hand, we are not ambitious enough when it comes to long-term goals In this video, I will first explain why this thinking is so damaging. Second, I will explore the underlying reasons for this misconception. Eventually, I will give you a blueprint of how to use that phenomenon to your advantage.

 

 

So let's jump right into it and let us start with the question of why this misconception is so damaging:

No matter how often you hear it, that overnight success doesn't exist, you still want to believe it. Your rational mind might know, that everything takes longer but you probably still think:

“Maybe I'm the exception to the rule? Maybe I'm just lucky or I'm more talented and therefore I will have success much faster than the average person? 

While this sounds like positive thinking it's actually not. It's exactly that kind of thinking that backfires. Since you expect success unrealistically faster than it's likely to happen, you'll get discouraged very fast. Therefore you probably stop way too early.

Secondly, people with a short-term attitude are more likely to develop “a greed for growth” and they are easily tempted to use grey zone measures that are unsustainable. In the case of YouTube, this would be buying likes, buying subscribers so forth instead of organic growth. And even this can be successful sometimes, it will cost you authenticity and therefore it will hurt you in the long run.

Thirdly, and this is probably the biggest mistake: it's a missed learning opportunity, especially when we talk about startup success.

When I look back to my time when I had my first startup, I have to admit to myself that I am just as guilty and made that mistake. 12 years ago, I started a company that had the purpose to build a platform for free digital textbooks. When growth was just not as impressive as we hoped for, we did all kinds of growth hacking stunts to reach our numbers in order to make our investors happy. But although we reached those numbers, we missed learning why the organic growth was not satisfying why people did not use our platform regularly and why they did not recommend it to their friends as often as we hoped for. We missed to figure out what we needed to change to improve the platform. And in the long run, we paid the price for it.

Why do all things move slowly in the beginning?

Therefore, to avoid that mistake that so many people do, it's important to really understand this phenomenon. So why do things move slowly in the beginning and then very often exceed our expectations eventually?

The first reason is, that making mistakes takes time. Because ... you will make mistakes. Everybody has setbacks.

You need time to develop the right work ethic.

You need time to learn to work together as a team. You might need t re-assign roles and tasks. You might need to replace people. And sometimes, it's not even your fault. It's maybe some unforeseeable event that slows you down or forces you to change your course.

The problem is that we all ALWAYS assume a best-case scenario. 

Scientists call this phenomenon "Planning Fallacy". That means that people, in general, are overly optimistic about the completion time of any particular task. When people have been asked in an experiment to either make a realistic assumption about the completion time of a particular task or to make a best-case scenario assumption "the perfect day, everything works fine, I'm not distracted..." it was almost the same estimation.

So what does that tell us? It means that we always assume a best-case scenario. Whenever we plan our day and write our to-do list, we assume that everything will work fine.

But we all know, that reality is very different.

Second: And this is more on a personal level. You probably have limiting beliefs in your head that stop you from executing. Deep in your head in your subconscious mind, it's likely that have doubts about what you can achieve unless you have positive reference experiences that give you the necessary confidence to achieve great things.

Some people already believe that they are the sh*t even years before they can back it up with success. But … that's rare. 

But for the rest of us with a normal ego, we typically need positive reference experiences to grow and overcome our limiting beliefs.

Third: In our digital world today, your success is influenced by algorithms if you like it or not. Take youtube for example. Simplified it works like this: The more videos you have on youtube, the more views you will probably get. And the more views you have, the more subscribers you will probably get. Because every viewer is a potential subscriber. 

And with more subscribers, you have a better chance to get more total view time in the first 48 hours after uploading a new video.

Because as a Youtube channel you can notify your subscribers and you will appear on their youtube homepage. If you have a much view time in the first 48 hours, the YouTube algorithm will push your video to more viewers and you'll get even more total views and therefore also more subscribers eventually.

So it becomes a positive feedback loop. But of course, in the beginning, the algorithm is not working to your advantage.

Another reason why you probably overestimate your success in the first two years and underestimate what you can achieve in the next ten, is the nature of exponential growth. Many businesses, ideas, and technologies develop exponentially. 

Since the Covid-19 pandemic, exponential growth is now on the radar of more people but it also revealed to me that many people, and this also includes many politicians, are not familiar with exponential growth.

And you cannot blame them.

The problem is that our brains – and thus our perceptual capabilities were never designed for exponential growth Therefore, we have to act against our intuition in those situations, which doesn't feel very comfortable.

The author Salim Ismail told a story in his book "Exponential Organisations" about the human genome project that was once heavily criticized because of its disappointing results in the mid-90s.

The project started in 1990 with the goal to sequence the human genome. The planned global budget was $6 billion and the project was expected to be completed in 15 years. Yet, In 1997, half-way through the estimated time frame, just 1% of the human genome had been sequenced.

Critical voices were raised and there were even calls to stop the project in order to not waste even more taxpayers' money. But at the same time, technological progress has led to sequencing speeds doubling every year. And although only 1% of the genome was decoded after 7 years, the project was completed in just 6 years later in 2003, two years earlier than originally planned, because there were also fewer genes in the human cell than initially expected.

That is the nature of exponential growth: In the beginning, it can look like a big disappointment, especially when you don't focus on the right metrics, but when your growth is exponential, it still can be a big success after all.

The upside and that is the reason why persistence is so important, is that most of those reasons that stop you from having success right away will turn into driving forces over time.

You will figure out how to work productively alone as well as how to work productively in a team.

You will learn what your customer wants.

Over time, your confidence will grow as well, and even those nasty algorithms will work in your favor when you stay persistent.

How can you apply the understanding of this phenomenon to your advantage?

1. First, develop an ambitious long-term vision, a vision for 10 or even more years. Ask yourself, which idea of achievement makes your hand tremble. That really makes your heart race. – and I'm not talking about doing a hundred burpees. I'm talking about an ambitious goal. Something that positively can affect the life of a thousand, or millions or even a billion people.
2. Second, break it down into no more than 5 ... executable steps, that are realistic and concrete. This is what Elon Musk did publicly in the summer of 2006, just one week after Tesla revealed its first automobile the Tesla Roadster, and still 2 years before Tesla made their first revenue. Tesla’s mission is to “accelerate the world’s transition to sustainable energy”. But Elon Musk was not only transparent about the mission and vision of the company. In Tesla's corporate blog, he publicly announced the long-term strategy – the 4 milestones to accomplish that mission: So, what do we see here: The strategy of Tesla is:
   
   “1) Build a sports car". Yes, they did that with the Tesla Roadster, just to show that it can be done, and even more important, that it can be done by Tesla – which is something not every startup can do. And even they only produced 2400 of those roadsters, they showed the world and also potential investors that they can build an all electrical sports car. "2) Use that money to build an affordable car." Yes, they did that with the model S, that they started to sell six years later, after Elon Musk wrote this blog post. For the second milestone, the new challenge was to scale up production to thousands of cars per month. "3) Use that money to build an even more affordable car." Check! This is what Tesla did with the model 3, 11 years after writing this text. “4) While doing above, also provide zero emission electric power generation options (with Solar City)" —> yes, Elon Musk also helped to build Solar City, a company building solar panels. In 2016 the company merged with Tesla. So yeah, Elon Musk had this ambitious plan, this grand vision, to accelerate the world’s transition to sustainable energy and he broke it down into 4 executable steps and his first step was to build less than 2500 cars.
3. The third thing to do, after developing an ambitious vision and breaking it down into a small number of manageable steps, and I cannot highlight this enough, is to focus on learning instead of growth – especially in the first 2 years. You will need time and a lot of wrong assumptions until you figure out what works and what does not work. In the first 6 months of the production of the Tesla Roadster the company was not able to produce more than 30 cars, due to multiple production problems, but they learned how to mass-produce electric cars. This is the important thing here! Every wrong assumption that you identify brings you closer to success and therefore it's progress and not a setback. And whenever you learn, that something doesn't work, be flexible, try something new.
4. And last, and this relates back to the third point after you figured out what works for your business, in particular, you must translate those insights into manageable metrics for your growth period after the first 1 or 2 years. One of the reasons Starbucks grew so big in the 90s was that they identified that the time people spend in their stores was driving the sales of the company. And after gaining that insight, they designed everything, the whole Starbucks-Experience as a "third place" around that metric. And talking about Starbucks and overnight success, keep in mind that 20 years after the foundation of the company Starbucks had just 100 stores worldwide. 

But anyways, Is Starbucks a model to copy? Probably not.

Could you develop something that can displace Starbucks with a better and more sustainable solution? Not in 2 years, but in ten or twenty, or thrity years? I think you can!

Just understand that everything takes longer, and then live with it, except it, embrace it! And that is the great insight! You can achieve almost everything when you switch your mindset from a short-term mindset to a long-term-mindset.

But this is the part most people get wrong. Don't focus on the what. Don't focus on what you do … what you build … what you create, your artifact. Your “what” is your startup, your Instagram, your book. When Elon musk would have figured out, that Tesla cannot build the roadster or any all-electric car, and I'm 100 % sure with this, he would have changed his plan. He would have built the hyperloop or something else instead of in order to substitute automobiles altogether, while he still would have pursued his vision "to accelerate the world’s transition to sustainable energy" but with different means. 

Successful entrepreneurs are extremely stubborn about the “why”. Therefore, why you are doing what you are doing, shouldn't change easily. But on the "how" you should be very flexible.