What is success? – Learn from the Country of Yellow Hats.

Article by Christoph Magnussen. Recommend via Facebook. Foto von Helgi / photocase.com

There are quite a few people that constantly think about success. I cannot claim not to be one of them – at least from time to time. As an entrepreneur success usually is seen as the measure of our endeavors. Thus it is very important for us.

The only issue:  everyone seems to know exactly what success is. Many times it is the money in your bank account, your big house and car or the strongly admired exit. People then love to talk about their company revenue or the number of employees to show how successful they are. Sure you need to make money, sure an exit is really nice, but if you start with that in mind and stumble upon it every day, you miss the opportunity to build a world changing, thrilling successful company. Any business with a really big impact such as Google, Skype, Virgin and many others were founded with a vision to make difference, not a lot of money in first place. Later success happened and generated more momentum for the company.

Ok so what is success?  Think of a foreign country. Lets call it the “Country of Yellow Hats”. In this country you recognize successful people because of their yellow hats. Everyone wants to have one. People admire those lucky guys with a yellow hat. But you cannot buy one. You receive one by accident. Imagine you are visiting this country for the first time. Can you imagine that stupid image? You would probably do not understand why there is a crowd around those people, why they are on TV. But what if you look at it from their perspective: they do not understand why people admire other houses, cars or expensive clothing’s. They would not understand why a company exit is a something to work for night and day. This points out that success is something completely made up by yourself. And the criteria for success is either defined by yourself or based on comparison within your peer group. Even if you are an independent entrepreneur you will have your social network. The same is true for doctors, lawyers, and professors or maybe just your best friend or wife.

If you are able to reduce this influence and define what success really means for you in your life, you will be on the way to success without pursuing it. But how does that work? How can you gain more independence from all the pressure and influence? To answer that question I had an inspiring talk with a very special entrepreneur and friend of mine Gerry Haag. He made some really fascinating experiences that I would like to share here.

Gerry grew up in Kiel and lived in Canada as well as in Australia. He is an Internet serial-entrepreneur since 1998 and was one of Amazon’s first managers in Europe. He built companies like Dropshop and Gourmondo, an e-Commerce business specialized in high quality food. Lately he built the German branch of the UK startup Lovefilm and scaled it from 2 to 60 employees.  But he quit this job (including his monetary incentives) to go traveling around the world with his wife and the two kids, although the company just started to negotiate about a multimillion-dollar IPO.

So the question is: Did he miss a success in not selling his shares or did he succeed in a way that money cannot buy?

Christoph: Gerry – you founded quite a few companies. Did all of them succeed?

Gerry: I would classify Amazon and Gourmondo as successful businesses. In 2004 we founded Dropshop, an e-Commerce startup that was focused on reselling used products on secondary markets like eBay and got financed with a valuation of 20 Million EUR. The consumer side of the business didn´t work out at all. We then switched to the B2C market, which did work, because we were selling overstock of large brand manufactures. But it was a very hard way to make money and thus very hard to get an exit. So we closed it, gave a significant amount of the raised money back to our investors. I then went to Lovefilm, which is the equivalent to Netflix in Europe.

Christoph: How do you usually work and what was your job at Lovefilm?

Gerry: As in all the startups I worked either as the founder or a manager. It was my job to grow the business from small to relatively large, which we did with Lovefilm in Germany. I´m used to start with teams of less than 5 and finish when we are 50 or 100 people at the company. This is the kind of experience I have. When I think back at starting gourmondo in 2002 for example, we did the entire logistics of the food from my basement and took my car to drive the orders to the local post office. In the case of Lovefilm I managed to take the company from 6 digit Euros annual revenues to 8 digits within two years.

Christoph: Why did you leave the company right before an exit?

Gerry: By that time we were just preparing the switch from DVD to digital world at Lovefilm and facing the IPO. As you can imagine there were still some interesting opportunities and challenges. But my wife Gesine and I made a serious decision. We decided that I would quit the job and the four of us, including our kids Robinson and Sienna, would go on a world tour before the children would start to go to school a year later. That is why I decided to go, although I had a considerable number of options on the table. It is interesting to note here that Lovefilm still has not had an exit, but I strongly believe in Lovefilm and that such an exit will happen in the future. Maybe another entrepreneur with a different focus would have stayed, but for me the trip trumped the money.

Christoph: So what exactly was on your mind when you made that decision?

Gerry: You know there are actually two things I thought about. The first one is based on my experience as an Internet entrepreneur. As we have seen many, many times, there is absolutely no guarantee in these exits. They may or may not happen. I have seen many more examples of exits not happening than exits happening. And people are having all these expectations about them happening and actually they do not happen. That gets people literally depressed. Just imagine they are focusing their whole life on this company and the exit and then it doesn`t happen.

My second thought was influenced by a quote from the CEO of Coca Cola who said: “Life is like juggling five balls. Those are your love partner, your family, your health, your friends and your work. The first four balls are made of glass. If you drop one of them, they will scar or break. The last one – your work – is made of rubber. It always comes back to you.” And you know, it`s true. If you look at the situation especially in central Europe right now, there are again many opportunities and they are coming back to you all the time. I also strongly believe this is a mindset: if you really want a new opportunity to come your way, you can make it happen.

Christoph: So when you went on the trip, was there a certain goal for you?

Gerry: I think there are people with a natural curiosity, who always want to travel. My father has been to 120 countries and when you put me into a country, that I don´t know yet, I always want to look around the next corner. I think I have a gene in me driving me to those expeditions. Also, we both have a strong passion for surfing and kitesurfing, which was the focus of much of our trip.

The other reason for us is, that every once in a while we take a step back from our lives and take some time of to get out of the hamster wheel and look at ourselves. When you are caught in everyday life, there is no chance for you to start creative thinking. You need to get out for that. And it is a luxury – you can really call it a luxury – to step back and evaluate, what life means for you and what you want to do with it from time to time. And for me it turns out that I always come back with a plan and thoughts about stuff that I want to do and how I want to move forward but also with other stuff that I immediately eliminate from my life when I get back.

But what is more and actually close to my heart is that my wife and I really wanted to spend time with our children while they are still young. We wanted to teach them appreciation, respect and tolerance for other cultures as well as the environment, to give them the right roots for their life. It is definitely a good time before they reach the school age. You know we saw everything from a multimillion-dollar villa to living in the bush with a skirt around our waists and a machete in our hands.

Christoph: There is this place you told me about called Vanuatu, which is similar in terms of success to what I call “The Country of Yellow Hats”. What does this country look like and what does success mean to the people living there?

Gerry: The reason we traveled to Vanuatu was because they topped the list of a study done by the New Economic Foundation called the “Happy Planet Index”,  which I think is a great concept and an alternative to GDP. It basically stated that the happiest people on the planet live in Vanuatu. I wanted to see for myself.

So you have to imagine 83 islands in the middle of the South Pacific, with still 400 languages spoken until today. Since we didn´t want to stay in the capital we went to this island called Tanna with probably 12 cars and 30.000 habitants.

Now coming back to your question of success these guys don´t know the concept of money, which was striking for me. The reason for that is simple: there is nothing to buy. They know what a car is and they have started to get used to the concept of concrete housing as opposed to palm leaves. But they have their own little houses and their own gardens where they grow food. They simply have a lot of time because there is not much to worry about.

Christoph: So what do they actually do all day long?

Gerry: They don´t do very much. They are in the fortunate position that they live in a very sustainable environment, where everyone has enough to eat and drink. They look very healthy because of the food they have. And they do something that none of us could ever do, even if we went to a monastery for half a year. They just sit at the beach for hours and do nothing. They just look at the ocean and think and enjoy.

Christoph: And what does success mean for them if they do nothing?

Gerry: In contrast to us they still live in strong communities in little villages. Success for them is being respected by other clan members, which they achieve mostly by helping and supporting other clan members. So when they help each other they get the respect.

That is completely the opposite of what we do. We are an individualistic driven culture. We always look for getting further ahead of others and compete. We usually never ask, what we can do to help others because we first look out for ourselves.

That is why I think we are lacking compassion, which means to have a feeling for others and help them to live a good life. That is a completely different concept of success.

Christoph: What about you personally? What does success mean for you?

Gerry: I think apart from having values and compassion, for me success means fulfillment. I feel successful if I am living a fulfilled life. A fulfilled life for me contains curiosity and adventure, partly experienced by our journey, but I try to implement that every day, week, month or year.  A lot of fulfillment comes from my family, the time I spent with my friends, sports and experiencing the beauty of nature.

Christoph: How did you find out what success really means for you in your life?

Gerry: I was always a person, who was looking for flow, even without knowing it. I like to call these moments “flow moments”. When everything is just perfect and seems to run without any hassle. Flow is a principle invented by Csikszentmihalyi in the 1960, and basically means being immersed in an activity without external motivation or incentives, forgetting about yourself and the world around you, fully being “in the moment”. The easiest way to think about “flow moments” is by the way, if you sit down and think about your happiest moments in your last ten years. Typically there are some moments like hanging out with friends on a mountain, doing sport activities, doing something stupid and so on. My point is that they are typically not work related. They always have other people or nature involved. I unconsciously think I had that as a big part of my life, but the realization really came in the last five to ten years.

The second part is building the companies that we talked about earlier. This is also an important part of my life to make it more fulfilled and also finance my lifestyle and trips like ours. Those company successes are nice and it feels good to have created something, but guess what: That feeling goes away as soon as the first champagne has dried. So if you don´t have a more fundamental passion in your life, you won’t feel flow and thus have fewer moments of fulfilment. Don´t get me wrong: you need money to finance stuff, but money is not the most important driver for me. The prime driver to me is build and launch something that people like and does something good. It feels like taking some pieces of wood and start building a house that people can live in, ideally for a long time. So it´s a home for employees and also a long time service for clients. You created something and that is great. But the real success and feeling of flow comes from inside of you, when you enjoy something even without thinking about what others say about it.

That would be my advice for entrepreneurs out there: What ever you do, put all your enthusiasm into it, but make sure that you don´t forget what´s really important in your life. Do something that you really like to do and not stuff that other people think its cool. I don´t do anything with the expectation or goal that people will think I´m cool.

Christoph: So did you succeed in your life?

Gerry: I have experienced many moments of flow and creation, so the way I have defined success for me, the answer is yes.

Christoph: Thanks for your time Gerry.