Cash vs Time
It's time to pick.
Hey everyone,
Today, I've got something cool to share and discuss. I've been super inspired by a bunch of people, and I've just added more ideas for the newsletter to my backlog (so stay tuned).
By the way, we've recently updated our vision and mission to the following. It's been almost 7 years since we started the company, and we feel like we've achieved what we set out to do back then.
Vision:
A world where business growth is no longer a challenge.
Mission:
To provide impactful growth solutions
It's incredibly inspiring to me.
Pretty cool, right? This is exactly what the Founder and CEO of a 300-person company is doing all the time.
So, what am I getting at? More and more, I keep running into a certain issue. It's not so much a problem as it is a misunderstanding or misalignment.
I've been talking to a lot of amazing founders and CEOs. They are super smart and interesting people.
We've grown to a certain size, never took any outside investments, and managed to build several companies that are now nearing a total valuation of $100M.
Crazy experience, team that one of a kind and obviously a lot of pure luck.
And no Felix Felicis, can you imagine? :)
We keep launching more projects and expanding towards our goal. We've started investing money, time, experience, products, and services into various companies, which will hopefully help both the projects and our scale, especially when it comes to strategic investments.
During negotiations, founders usually say things like, regardless of whether it's a service or product business, B2B or B2C:
"We don't have a product yet, but we're raising funds."
"To work with us, you need to make a cash investment; otherwise, it's not worth it for us."
"Show us your commitment with money."
And so on. This often comes with a lack of solid numbers, burn rates, or other issues.
Most of the time, money is not the best thing that companies need, especially in certain company growth stages.
Don't get me wrong, I'm all for cash investments, especially if the company has traction, the founders are full of energy, the product idea is awesome, or this is hardware.
But time is true value.
Time of building, creating, scaling, sharing, loving, talking, working—everything.
The time of your involvement and the time of your experience are worth more than any amount of money.
Plus, there's a trend towards bootstrapping and getting huge valuations if it all works out, investments, and big exits (unless you fail along the way, but if you don’t, you might not want to consider investment at all ).
Cost of Money
Ever wondered about the actual cost of money?
I mean, I really thought about it—not just in terms of what it can buy you today, but what it's truly worth tomorrow, next year, or in a decade.
Let's pull up one of those popular memes that hit the nail on the head: Imagine you've got $1 million.
Now, park it somewhere and do absolutely nothing with it. Fast forward one year, five years, ten years. What do you have?
In a nutshell, it is a lot less than you started with, thanks to our old foes, inflation and depreciation.
That million isn't just sitting there; it's slowly but surely eroding away. It's like watching a block of ice melt in the sun. One day, you're chilling with a cool million; the next, you're wondering where the puddle came from.
To give you an idea. Based on the United States inflation rate of 3.1%, here's how $1 million would depreciate over time:
After one year, it would decrease to approximately $969,000.
After five years, its value would further reduce to about $854,317.
And after ten years, you'd be looking at roughly $729,857.
This clearly shows how inflation quietly but constantly reduces how much your money is worth. It reminds us that money left unused isn't just sitting there; its ability to buy things is getting smaller.
Now imagine higher inflation or other factors. Scary.
Investments
And here's where it gets interesting. The trend nowadays is to chase investment for literally everything. Want to start a business? Get investment. Looking to scale? More investment. It's become the go-to, almost a reflex action. But here’s the kicker: All those VCs that everyone's hustling to impress?
They're not having the time of their lives either. Their performance is on a bit of a downward trend, and many are pivoting towards a Private Equity (PE) approach, favoring safer bets over the high-risk, high-reward game.
So, what's the deal with the cost of money we're all trading with? It's not just about the dollars and cents that come and go. It's about what those dollars represent—the opportunities for growth, the potential for innovation, and the chances we take (or don't).
When we talk about investment, especially in the startup world, the focus is often on the cash injection. But the real cost? It's measured in the opportunities lost or gained, the projects you could have bootstrapped, the ideas that could have flourished with a bit more time, and less rush toward external validation.
The irony is, while everyone's rushing towards securing that pot of gold, they might be overlooking the most valuable asset they have: time. But that's a story for the next section.
Cost of Time
What, then, is the cost of our time?
This question takes on a profound significance when we pause to remember that we're each granted a single journey through life. Unlike money, time is an asset we're all spending, knowingly or unknowingly, with every tick of the clock. And here's the kicker: it's the one resource we can never earn back, no matter how hard we try.
Imagine if time were a currency. How would you spend yours? On pursuits that drain your spirit or on endeavors that set your soul ablaze? The harsh reality is that many of us trade our most precious commodity for money, a resource that, as we've just seen, is perpetually slipping through our fingers like grains of sand.
Yet, the irony of our modern hustle culture is that it glorifies the relentless pursuit of wealth, often at the expense of the very life experiences that wealth is meant to afford us. We're encouraged to "grind" and "hustle" with the promise that it'll all be worth it in the end.
But what end are we racing towards?
A finish line where we finally have time to live, only to find that the best years of our lives are behind us?
The cost of our time isn't just measured in missed birthdays, anniversaries, or the baby's first steps. It's the novel unwritten, the startup unlaunched, the sunrise unseen. It's the laughter unshared, the love unexpressed, and the adventures unexplored. This is the true cost of time—measured not in hours, minutes, and seconds, but in lost opportunities for joy, growth, and fulfillment.
In our journey for success and security, it's all too easy to forget that time is the fabric of life itself. Each moment is a thread in the tapestry of our existence, woven together to create a story uniquely ours. How we choose to spend our time is, in essence, how we choose to live our lives.
So, as we think about the cost of time, let's also consider its value. In a world obsessed with the bottom line, let's dare to measure wealth not by the size of our bank accounts but by the richness of our experiences.
It would be pretty sad and lonely world
Let's invest our time in what truly matters, what brings us joy, and what makes us feel alive. Let’s invest in one another as humans. (I said it like Lex Fridman in his podcast)
Remember, while money can always be earned, time, once gone, is gone forever.
Choose wisely.
Why do I choose Time over Money?
Business case. Why do my team and I prefer to give our time to companies instead of just money? It's because we've seen that our experience and the time we spend can help businesses grow way more than just giving them cash.
Think about it this way: money is important but not everything. When we work closely with a company, we're not just giving them money; we're sharing our knowledge, skills, connections, passion, and culture. This can lead to much bigger changes than if we just wrote a check.
For instance, consider a small tech startup with which we partnered. Instead of just investing money, we guided them through refining their product and expanding their market reach. Basically, I represented them with Belkins Frameworks related to core business functions.
Before our involvement, they were making $200,000 a year. After a year of working together, focusing on strategy, planning, acquisition, and execution, their revenue jumped to $800,000.
This is a clear example of how investing time and expertise quadruples the value compared to just adding money.
Here's another example to highlight the difference.
One marketing firm was struggling to differentiate itself in a really crowded market. I can truly say that this niche is REALLY crowded, and their revenue was either declining or stagnating. Even if you gave them a few million, it would never solve the core problem of competition. Only by contributing time and strategic insights, not just capital, was there a way to streamline services and target a niche market. Only with our hands-on approach could they start to grow again.
Businesses are beginning to understand the immense value of receiving support from experienced individuals. While there are stories of businesses that received substantial financial backing yet failed, those that benefit from professionals' guidance and direct practical involvement often succeed.
We know what we are doing, and we have all the resources for that. We're more than investors; we're partners committed to sharing our knowledge to ensure these businesses thrive. Through this approach, we're able to make a significant, measurable difference.
That being said, cash's value is less than experienced people's involvement.
Post-Credit Scene
Finally extras. Dive deeper into the journey of understanding and balancing the scales between cash and time with these hand-picked resources:
I found this interesting graph on Reddit about your age and net worth to compare to people your age.
Sam Altman ‘ What I Wish Someone Had Told Me” list:
Optimism, obsession, self-belief, raw horsepower and personal connections are how things get started.
Cohesive teams, the right combination of calmness and urgency, and unreasonable commitment are how things get finished. Long-term orientation is in short supply; try not to worry about what people think in the short term, which will get easier over time.
It is easier for a team to do a hard thing that really matters than to do an easy thing that doesn’t really matter; audacious ideas motivate people.
Incentives are superpowers; set them carefully.
Concentrate your resources on a small number of high-conviction bets; this is easy to say but evidently hard to do. You can delete more stuff than you think.
Communicate clearly and concisely.
Fight bullshit and bureaucracy every time you see it and get other people to fight it too. Do not let the org chart get in the way of people working productively together.
Outcomes are what count; don’t let good process excuse bad results.
Spend more time recruiting. Take risks on high-potential people with a fast rate of improvement. Look for evidence of getting stuff done in addition to intelligence.
Superstars are even more valuable than they seem, but you have to evaluate people on their net impact on the performance of the organization.
Fast iteration can make up for a lot; it’s usually ok to be wrong if you iterate quickly. Plans should be measured in decades, execution should be measured in weeks.
Don’t fight the business equivalent of the laws of physics.
Inspiration is perishable and life goes by fast. Inaction is a particularly insidious type of risk.
Scale often has surprising emergent properties.
Compounding exponentials are magic. In particular, you really want to build a business that gets a compounding advantage with scale.
Get back up and keep going.
Working with great people is one of the best parts of life.
Books
"The 4-Hour Workweek" by Timothy Ferriss - Explores the concept of lifestyle design and how to achieve more with less, challenging the traditional trade-off between time and money.
"Essentialism: The Disciplined Pursuit of Less" by Greg McKeown - A guide on how to identify what's truly important, making the most impactful use of your time.
"Your Money or Your Life" by Vicki Robin and Joe Dominguez - This classic book offers a step-by-step plan for transforming your relationship with money and achieving financial independence, emphasizing the value of time.
Podcasts
"How I Built This with Guy Raz" - Hear from entrepreneurs who've made tough decisions about funding and scaling their companies, offering insights into the cash vs. time dilemma.
"The Tim Ferriss Show" - Ferriss delves into the routines and time-management strategies of world-class performers, providing a wealth of ideas on optimizing your time for maximum impact.
"Optimal Living Daily" - This podcast curates and narrates the best content on personal development, minimalism, and optimizing your time and finances.
Films
"In Time" (2011) - A science fiction thriller that explores a world where time is the ultimate currency, highlighting the stark differences between the wealthy and the poor in terms of time allocation.
"About Time" (2013) - A romantic comedy-drama that delves into the life of a man with the ability to time travel, discovering that despite his extraordinary gift, making the most of the present is what truly matters.
See you next time.
Vlad
A really great one. Btw, inflation scares me as well ;)
Your best newsletter by far. Great job! 100% agree with everything.