Lately, beyond mentoring folks and working on Command, a lot of my time has been spent reading about value investing—an investing strategy that focuses on the long-term viability of a business and its ability to grow stably over time while producing an attractive return for its investors.
The point of this strategy is that if you do your homework and make a point to only buy companies that have long-term (multi-decade) prospects and stability at attractive prices, over time you're likely to see a better return on your investment.
As I've started to wrap my head around what this approach entails, I realized there are a lot of parallels back to building software. Especially from the perspective of an "indie maker" working to build a business.
It's unfortunate, but a lot of the thinking I see about what products to build is focused on short-term values:
- How popular will this be?
- Will I be able to get rich quick?
- Will I be able to quit my job in X months?
Interestingly enough, the same sort of behavior is reflected in investing. There's a strong favor toward the next few months or years instead of the next decade (and beyond).
In turn, this means that a lot of unfavorable compromises are made on the quality of the product, the team working on the product, and all of the other "good things" you hope to find in a business.
Compromises that might look like wins today end up being detrimental next year.
Why is this important?
As I think about the why behind the SaaS I'm working on—Command—there are a few things I hope to accomplish:
- Create a stable revenue stream that's not pinned to my time.
- Create a consistent focus for my efforts vs. scattering my thinking between an array of people and projects (read: wearing myself out).
- Create a "safety net" to cover me in the event that life isn't all sunshine and rainbows. Seriously.
In other words, I'm building a SaaS because I want to build an asset: something that's valuable as-is, without the need for my constant involvement. Something that I can expect to make money while I sleep.
As we're all-too-keen to forget: time is our most valuable asset and we can't get it back.
If I invest a lot of time now to build something that gives me back time (in theory) later, I can use that time to create even more valuable assets, or when appropriate, take a rest without having to worry.
When you think about what you're doing as building an asset, you're more careful. You don't cut corners and you don't rush. Instead, you understand that "if I do this well now, it will serve me for several years (hopefully decades) to come."
How to change your mindset
Thinking like this isn't terribly easy to do which is why we see so few long-term successes in the world (relative to the population of the planet). Today, this is especially difficult with social media bombarding us with why everyone else is so special and "better" than us.
If you want to find your own success, you have to learn that this is a trap.
Realize that if you really want to build your own thing—something that serves you long-term—you have to avoid getting caught up in the buzz of the now.
Really think about what you want in life.
Where do you want to be in five years, ten years, and beyond?
Who do you want to be?
More importantly, consider the negatives. What's the downside of not rushing? Of not chasing attention?
Consider how an older you will look back at you today. Will they be satisfied with the choices you're making?
While these sorts of introspective questions aren't the easiest to answer, they will have an immense impact on your ability to build something meaningful.
Take your time now to have more later
As you forge ahead on your own product, really consider whether or not you're building an asset.
"The big money is not in the buying and the selling, but in the waiting."
— Charlie Munger
Realize that an asset can be consistently improved over time to make it more valuable. The longer something exists, the more likely it is to continue finding success.
Focus on doing your best now and let the future take care of itself.