What are some effective ways to persuade co-founders to prioritize long-term goals over short-term gains?

The founders vision is the true asset for any business built to weather the growing pains and disappointments that will be faced as the startup brings on new people. Although founders need to listen to the wisdom of those around them, the problem to solution arc is why the organization was formed and this is what creates the passion that creates the vacuum people desire to fill. In order to thwart the distractions that are presented by those who do not see the vision, keep testing the construct that you are building. Vision brings the resources. Believe in the change you are about and move towards your goals as change can be sometimes lonely and leadership often requires sacrifices.

I am the founder of six companies. Four were later acquired by public companies and the other two by co-founders. My answer to aligning the interests of co-founders is to avoid launching until you have a clear vision of your future exit strategy, assuming that you plan to exit. I learned this lesson with my third start up. I had a long term vision and he was more interested in the short-term. My solution was to sell him my interest before I became more frustrated. So, don’t launch until you know where your rocket is headed.

Defining a clear vision - this desired state of being of the company in 3-5-7 years from now, is one of the most important responsibilities of a CEO. Delegating this responsibility to someone else on or outside the team is not delegation but abdication. While it might be counter intuitive at first or even feeling arrogant, the reality is that the CEO of a startup is the most important person in the company in the sense that the whole company exists in order to realise the vision of that founder. As Cheshire Cat from Alice in Wonderland put it very clearly "If you don't know where you want to go, every path will get you there", having a clear long-term goal will ensure that you have a North star to always guide you.

Long term goals are like playing chess, while focusing only on short term gains is like playing checkers. Long term goals are strategic and visionary, short term goals can be short sighted and costly. Implementation is the key to success. Great vision without a plan of implementation is only an idea...

Founders need the support of their executive team and their advisors to stay on track with the long-term vision and plans. However, they also need to know they have the financial runway to execute on those plans or these get derailed just to stay alive. They also need to be able to make adjustments along the way to be able tackle the issues that running a business throws at you. Maintaining a clear vision while allowing for some tweaks to get there is one of the biggest keys.

Don't forget to include succession planning as part of your workforce development and staffing strategy, even if at first it seems difficult to forecast what your organization will look like down the road. Planning for the future, and evaluating talent at all levels, even at the beginning of an endeavor can help carve out a pathway which you'll be able to go back to for perspective along the way.

Engage co-founders actively, valuing their insights. A diverse range of perspectives often leads to innovative solutions. Cultivate an open, respectful environment where everyone feels heard. Acknowledging and appreciating contributions boosts morale and encourages a supportive, motivated team. Flexibility in incorporating ideas strengthens the startup's adaptability.

One of the hardest things to achieve in a startup, unlike a more mature company, is to have the right decision-making process. In the beginning you have two options as a CEO. You can either establish a command and execute culture, where whatever you decide gets executed OR you will opt for involving the founding team in the decision making. I strongly encourage to do the latter as while the decision process in the beginning might be slower, it will ultimately ensure better alignment, deeper connection of everyone on the team with what the company does and finally - it will instil a true sense of ownership. That being said, the CEO should not confuse involvement in the decision making with democracy as that will be an abdication.

Most co-founders come into a partnership largely because of the profit prospects. Very few join because of the vision. Where profit is the primary motivation, it is a given that short-term challenges in the business will dampen long-term enthusiasm. Founders must make the VISION of the enterprise very clear. He also needs to let the co-founder know what the possible challenges could be as the business progresses, considering the certainty of uncertainty which many do not anticipate or prepare for. Every business proposition appears very rosy at the planning and proposition stages. Until reality hits. Goals, strategy, value, etc. must be constantly communicated. Co-founders must also be part of the decision-making and operational processes.

Foster a collaborative environment where decisions are made collectively. Encourage open discussions about the long-term vision and goals, allowing each co-founder to contribute their insights. This not only enhances commitment but also brings diverse perspectives into play.

In navigating the intricate balance of LT goals versus ST, it's pivotal to remember that true innovation is a marathon. Long-term goals, akin to a visionary's roadmap, offer sustainable growth and depth, often missed in the pursuit of fleeting short-term achievements. A visionary's eye is crucial here - understanding that immediate gains, while tempting, may not lay the groundwork for transformative success. Fostering an ecosystem that nurtures diverse perspectives aids in comprehending the expansive benefits of long-term thinking. This ecosystem, rich in varied insights, can effectively mitigate risks associated with short-sighted decisions, thereby aligning a company's trajectory with enduring innovation and market leadership.

Illustrate how it fosters stability, quality, and customer loyalty, setting the stage for sustained success. Encourage co-founders to learn from both successful and failed startup examples, emphasizing how strategic, long-term thinking often leads to industry differentiation and lasting impact. Creating a roadmap showcasing milestones and illustrating the journey can visually reinforce the long-term vision, making it more tangible and compelling for everyone involved.

One way to differentiate the Long v Short goals is to place them in a hierarchy of Goals, Objectives and Enabling Activities. By subdividing each major goal into step-by-step "mini-goals" (Objectives), each founder can focus on the progress of meeting their own concepts of goals. Some even quantify them in "values to the company" and shares!

Short-term goals make sense only when they lead to achieving the long-term ones and ultimately the vision for the company. The easiest way to break the long-term vision to a smaller short-term goals is to work backwards. Always keep in mind that "getting closer" doesn't guarantee eventual success. A trivial example: Imagine we need to get to the moon and while walking, we see a tree - if we get on the tree, we will get closer to the moon, but will it allow us to actually get there? Working backwards lowers the risk of such suboptimal moves.

Present a comprehensive analysis of the benefits associated with achieving long-term goals, emphasizing the positive impact on the company’s growth, reputation, and resilience. Simultaneously, address the risks of prioritizing short-term gains, such as potential burnout, missed opportunities, or reputation damage.

While focused on the end-goal, we should always celebrate the small wins of achieving the short-term ones, leading to the ultimate success. Hyper focus on the future is great, but has the inherent risk of missing what's here and now. A good analogy is like driving on the high-way - yes, you drive fast and will potentially get to your destination faster, but do you know what you miss? You don't get to see the scenery. The moral of the story - pay attention to the short-term successes as the positive energy of that will fuel you to keep moving! Setbacks? Of course, there are setbacks! Learn from them and always keep in mind that you will move fast and will break things, and that is the nature of the best!

Take the wins and highlight the team strengths. Great. However, it’s also important to review the missteps and failures. When doing so it’s critical to remove blame, and separate the person from any problem. The team should rally and move forward together as a unit, and not as a fragmented group. There is a difference.

It's vital to maintain open communication during setbacks, fostering a culture of learning and resilience. Additionally, implementing regular team check-ins can provide a platform for co-founders to share progress, challenges, and ideas, ensuring everyone feels heard and valued. Recognizing individual efforts publicly, perhaps through a shared platform, reinforces teamwork and motivation, driving everyone toward the shared long-term vision.

Acknowledge and celebrate the milestones achieved along the path to long-term goals. This instills a sense of accomplishment and motivates co-founders to persist. Additionally, view setbacks as learning opportunities, emphasizing the valuable lessons that contribute to the overall growth and success of the startup.

Regular team-building activities can strengthen bonds, fostering a positive atmosphere. Moreover, promoting a healthy work-life balance and mental well-being is crucial. Encourage co-founders to engage in skill-enhancing workshops and seminars, boosting their confidence. Open channels for feedback and create an environment where ideas flow freely, ensuring everyone feels supported and motivated in the startup journey.

One way to build confidence in the founders is to show them that others are valuing their ideas and contributions. Try to entice accredited investors to take interest in the company and the co-founders. AIs ("angels") have high-net-worth to make risky investments and often assist (Think Shark Tank). They should be able to produce $1 million within 5 business days, not including equity in their home. The SEC restriction assures they have enough financial sophistication to evaluate risks and merits of investments, or enough wealth to bear any loss. When your co-founders notice interest from outside investors, they will feel more confident of their contributions.

Ensure that your co-founders have the necessary resources, whether it's time, financial support, or skill development, to work towards long-term goals. Demonstrate a commitment to their well-being, fostering a collaborative atmosphere where everyone feels supported in pursuing ambitious objectives.

Regular and transparent communication is key. Encourage open dialogue, active listening, and mutual respect. Celebrate achievements, no matter how small, and address challenges as a team. Foster a collaborative environment where everyone's ideas are valued. By appreciating each other's strengths and nurturing a positive atmosphere, co-founders can navigate challenges and enjoy the entrepreneurial journey together.

Experience & trust with your co-founders gives a team super powers. Co-founders are usually the ones that are not afraid of the future and are working on creating it. When they feel like people have their back, they take more risks and when you have trust, you can divide and conquer!

When posting reports about the process and successes in the company, ask the productive founders for permission, then give credit to them for their contributions. Build up a following of supportive colleagues outside of your company and encourage the co-founders to interact with external committees, agencies and organizations. Such interactions benefit the company, founders and employees. Public service announcements, milestones shared in the media and other public displays provide positive exposure to potential clients, customers and investors.

Establish a foundation of trust through transparent communication and reliability. Demonstrate your commitment to the collective success of the startup and the well-being of each co-founder. Trust is a crucial element for fostering a shared understanding of and dedication to long-term goals.

Talk, talk, and talk again. Remember that not only you have an influence on stakeholders, but also their families, their stakeholders, and the environment in which you find yourself. It's not easy, and to be honest, it often fails. Especially once you start scaling - dopamine will do its job ;).

Flexibility in Planning: Be open to adapting long-term goals based on evolving circumstances and market dynamics. Educational Initiatives: Offer educational resources and workshops to enhance your co-founders' understanding of the benefits of a long-term perspective. Regular Check-ins: Schedule regular check-ins to evaluate progress, address concerns, and reaffirm the importance of long-term goals. External Expert Insights: Bring in external experts or mentors who have successfully navigated the challenges of prioritizing long-term goals to provide valuable insights and guidance.