Hey folks!
Most of my readers — including you, I bet — like to dream big. So do I.
So today, I’ll show you the first two steps I take on any major life work.
Let’s do it!
Two ships are setting out to cross the ocean.
One captain says, “We’re sailing to New York City, following the charts I’ve made.”
The other captain says, “I hear America’s nice these days. Maybe let’s go that-a-way?”
We all know what’s likely to happen.
The first ship will probably get to New York. If it gets blown off course, the captain can check her charts and correct course.
The second ship… well, it might end up in New York. Or it might get to Brazil. Or Newfoundland. Or it might skirt around Cape Horn and get stuck in the Great Pacific Garbage Patch forever.
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Imagine the next ten years of your life as that ocean voyage.
- Do you know specifically where you want to be in 10 years?
- Do you know how you’re going to get there?
Or are you the second captain, only looking as far as the next horizon? (That was me until my 30s.)
In today’s newsletter:
1. How to choose your destination (the 3 key factors)
2. How to plot your course to get there (the first exercise you need)
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When I was in my 20s, I was scared to plan more than a year out.
So I didn’t.
And you know what? It was fine.
But ten years later, like the second captain, I wasn’t much closer to the life I dreamed about.
That’s when I started planning long-term. And looking back, I can see that everything changed when I started thinking a decade at a time.
My goal now is to build my holding company to provide opportunity for others.
So, using that as my example, let’s look at how to make long-term plans.
Choosing your destination
Choosing a long-term destination is an incredibly powerful exercise. But you shouldn’t just pick it out of a hat. You want to nail down three factors:
- A 10-year timeline
- A simple, concrete North Star
- Your “Why”
Why 10 years?
For starters, that’s how many fingers I have. But mainly, it’s because 10 years is a long time.
Looking 10 years down the road forces you to play the long game, and reflects the mindset and attitude you’ll need to cultivate.
I like holding companies because they’re all about owning things that will be durable in the long term. They’re the opposite of VC-funded high-growth Silicon Valley startups. Berkshire Hathaway wasn’t built overnight.
And personally, I tend to stick to stuff for a very long time. So that business model is a good fit for me.
Another thing to keep in mind: you will be a different person in 10 years than you are now. So while you need to be determined to stick the course, you also need to be open to growing and changing as a person.
Your North Star
Picking your North Star means finding a single number that reflects where you want to be in 10 years.
I’m a business guy, so my favorite is to pick a revenue or a profit number, because as a business your goal is to put money in your pocket.
So it could be: 10 years from now, I’m going to have a HoldCo worth $1B. (Or $10B.) [NOT my real number by the way!]
This gives you a clean, clear number that you can plan backwards from.
Your Why
Sticking to anything meaningful for 10 years, you are guaranteed to have some hard times. What’s more, 10 years from now you will be a different person than you are today. That’s why you need a Why.
A Northstar number alone isn’t personal. If you’re going to dedicate a significant portion of your life to something, it must be meaningful to you as a person. What are you passionate about?
In the big picture: what impact do you want to make on the world?
In the little picture: what do you want to do with your time, in the day-to-day?
If you’re able to build a HoldCo that matches your why, you’ll have a reason to power through the challenges you are guaranteed to face. Your personal objectives and your business objectives need to be tied up together for it to be meaningful.
So what are your values? What do you want your daily life to look like? And what kind of person do you want to become?
My “why” is to create as many jobs and opportunities as possible for people, and to give back to my community in San Antonio.
I want to share the knowledge I’ve built up over the last decades to make people smarter.
And I want my daily life to be teaching people, having enlightening conversations, solving interesting problems, spending time with family, and running down great opportunities when they appear.
I also want to make a bunch of money.
My HoldCo serves my why, so I love what I do every day. So what’s your why?
Next: drawing the map from where you are now to where you want to be.
Plotting your course
Figuring out your Northstar and your Why gives you your big-picture goals.
The next thing to do is take stock of where you are today. My favorite tool for doing that is a SWOT Analysis.
If you’re not familiar, SWOT stands for Strengths, Weaknesses, Opportunities, Threats.
It’s a great way to map out the resources you have, and take stock of the known challenges you’ll face.
You can map it out as a 2x2 matrix, like this:
Keeping your big picture plan in mind, fill out each quadrant. Here are some questions to get you started:
Strengths
- What do I do well?
- What have my customers or partners told me they like about me?
- In what areas do I outpace my competitors?
- What’s unique about my business, products, or services?
- What assets do I own? (e.g. IP, tech, capital)
Weaknesses
- What can I improve?
- What are my customers or partners dissatisfied with?
- Where do I fall behind my competitors?
- Where am I lacking in knowledge or resources?
Opportunities
- What emerging trends can I take advantage of?
- Which of my strengths might be valuable to potential partners?
- What adjacent markets might I tap into?
- Are there geographic locations with less competition?
Threats
- What is my competition doing?
- How could my weaknesses leave me vulnerable?
- What market trends am I unprepared for?
- What economic or political issues could impact my business?
Once you’ve filled out your SWOT analysis, you’ll probably see a million “to do” items and questions to answer.
Think on these. Take some time and come back to them. And congratulations: you’re starting to think long term.
If you want to take your planning further, head over to my website where I’ve written about my planning process in detail.
That’s it for today! Have an amazing week.
Michael
