“The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark.”
Michelangelo
I have a group of four fellow founders and CEOs from the region that I meet with about five times a year. It’s a very diverse group with different business and personal backgrounds.
One of them is the CEO of a family business with several hundred employees. He is the second generation to run his business, having taken over from his parents almost a decade ago. Another is the founder of a respected national communications agency. The third runs an innovation agency and is heavily involved in crypto, while the fourth has focused his career on bridging the knowledge gap between the digital future and the real, not-so-digital present.
Although we are in the same age group, we come from different backgrounds and approach the hurdles of entrepreneurship in very different ways. This is what makes these meetings so interesting and valuable. While we are united in the goal of building businesses, our approaches are often quite different.
We meet several times a year for a two-day retreat. During these 48 hours we discuss highly confidential personal and professional issues. The aim is always to provide an outside perspective and advice, sometimes motivation and always criticism. And yes, don’t worry – I’m not going to spill the beans.
There is an atmosphere of trust and transparency at these retreats. Sometimes hard truths are told that I might not be able to say (or receive) in any other setting I’m familiar with. For this reason I really value these retreats. Nothing short of a family emergency could stop me from going to these meetings.
At one of the last of these meetings, I revealed my current financial position, including all my holdings in various companies, crypto and ETF portfolios, as well as the income from my various positions. I did this because I wanted to get their perspective on my position, as well as work out a path that would get me to my desired goal of having a net worth of €10 million before I turn 41 (pretty much exactly 5 years from now).
Contrary to what I had hoped, the discussion quickly turned into an interrogation of why I wanted to achieve this financial goal. The question was really split in two:
One half focused on the fact that it had taken me 35 years to get to just over €1.5 million – and how I could possibly expect to essentially 7-fold that amount in just 5 years, while the other half was obsessed with the question of why I would want to reach a net worth of €10 million in the first place.
Instead of discussing viable options or correcting my portfolio based on their investment experience, the conversation took a different path:
- Why do you want to have 10 million euros?
- Do you think you will be happier when you reach 10 million?
- What will change in your life if you reach that goal?
Duh. This wasn’t what I was hoping for. There was a judgmental aggressiveness in the air. Almost as if I should feel guilty for setting such a goal.
While these are valid observations and questions, they had very little to do with the answers I was looking for. The discussion was going in the wrong direction.
Needless to say, I didn’t get the insights or opinions I was looking for. More than that, it left me puzzled.
Why was it so difficult for a group of seemingly like-minded entrepreneurs and capitalists to get their heads around a simple, quantifiable question: how do you get to 8-figure personal wealth in a reasonable amount of time?
Setting ambitious goals is crucial to achieving greatness.
Ask anyone who knows me and they will tell you that I am not an overly optimistic person. Which isn’t a great thing to be when you’re also an entrepreneur – more on that another time.
All my business plans are based on very conservative assumptions and always include a section on what to do if disaster strikes.
So it’s safe to say that I’m not a daydreamer hoping for the best.
That’s why my 5-year goals don’t include anything like owning a private plane or being a billionaire – not by a long shot.
So yes, I like to think that I choose realistic goals. So much so that when I meet the typical San Francisco or Berlin entrepreneur, my goals always seem to fall short and small. But that’s a topic for another time.
In my opinion, reaching a net worth of €10 million in 5 years is absolutely realistic. It’s ambitious alright, but realistic nonetheless.
Even more: i truly believe, if I’d chose a smaller goal that might seem more realistic, the maximum I would achieve is exactly that goal – not a smidge more. And I think this applies to all kinds of goals and ambitions.
Let me give you a recent example: all my life I have struggled with gaining weight. You see, I’m 1.93m tall (6.33ft in weird measurements) and for most of my adult life I’ve weighed between 65 and 70kg, which puts me well below the normal weight range.
So last year I decided (and announced) that I was going to start working out and gain 15kg in a healthy way (read: not eating burgers all day) within a year.
Anyone who knows anything about gaining (or losing) weight knows that it is really hard to put on weight month after month. Especially when you are just starting out and have other things going on in your life.
So of course a lot of people told me not to get my hopes up, or outright told me I wouldn’t be able to do it.
Once again, I obviously chose a goal that was way too ambitious.
The result?
By the beginning of December I was at 80kg for the first time in my life, and I had developed a training routine (~3x a week for just 30-40min) that suited my lifestyle.
So setting ambitious goals seems to work for me. But why is that?
The benefits of setting ambitious goals
- It boosts my motivation when people around me hold me accountable. In this case, I set up a whatsapp group with other people where we regularly posted our exercise results. This forced me to send a bi-weekly update and risk being “publicly” shamed if I didn’t make progress.
- I love being the underdog. Whatever the situation, whenever I am perceived as the underdog, I excel. Whenever I’m perceived as the stronger part, I struggle more. It just takes some of the external pressure off. It allows me to focus on the task at hand rather than maintaining an illusion on the outside.
- It gives me a North Star. Given my background this just makes sense. Turning a goal into a quantifiable, specific target makes it real – rather than an abstract wish. It gives you clarity and allows you to develop systems to help you achieve that goal. In my case, I knew I needed to effectively gain 1.25kg per month. I can work with that. I can measure my progress and see what works and what doesn’t.
- It forces me to think about routines and discipline. Based on the previous point, I am now able to derive systems and routines to help me move the needle in the right direction.
- Even if I miss, I will have made progress towards my goal. This is obvious. But it’s such a nice side effect. Even if I lose – I still win. After all, if I’m going to put myself out there, do the work, and keep up the effort over time, it’s only natural that some results will come. So even if I don’t reach my ambitious goal, I’ll most likely have come closer to it. So I will be in a better place than when I started.
By the way, this whole overambitious goal-setting thing is actually backed up by science: According to the Goal-Setting Theory, formulated by Edwin A. Locke in the 1960, more challenging goals foster higher levels of effort and performance compared to easy goals. When individuals are presented with a challenge, they are often more engaged and motivated to exert the effort necessary to achieve the goal.
In Germany we have a saying: “Ein gutes Pferd springt nur so hoch wie es muss.” (literally translated: A good horse only jumps as high as it has to).
There is a lot of truth in that.
The Very Real Danger: You Are Less Likely to Achieve Smaller Goals
Coming back to the issue of making money, if I set myself the goal of making 1,000,000€, I train my brain to think of solutions that fit that challenge. And clearly, the tactics needed to reach 1,000,000€ are very different from those needed to reach 10,000,000€.
So by setting my goals too low, I’m literally acting in a way that would only allow me to achieve those smaller goals.
Yet another truth I discovered along the way is that setting more realistic goals doesn’t make them easier to achieve.
What would have happened if I had decided to set my goal at 75kg?
I would still have had to develop the routines and (almost) the same discipline it took to reach my higher, more ambitious goal. And of course it was much harder to gain the first 5-6kg and develop a healthy diet and training routine. By the time I got to 75kg I had all those systems in place – so it was much easier to just keep going.
These are the risks of setting your goals too low.
Especially if those goals are related to something you are good at.
Either you know deep down that you are capable of achieving these goals, or you discover this early on. What often follows is complacency and procrastination. Because it is no longer a challenge.
And so you are more likely to not achieve those realistic goals.
Because most of us, consciously or unconsciously, are looking for challenges to overcome.
We need a dragon to slay. A dragon that is said to be unslayable. To prove to the world (or better still, to ourselves) that we have indeed slayed the dragon, against all odds.
So why should I aim for less when I have to do almost the same amount of work and am less likely to achieve it? It just doesn’t make sense to me.
Isn’t it much more logical to aim for the unrealistic? Something so big that it just seems unattainable.
Oh, and one last terrible truth:
There must always be bigger goals.
Once I achieve my goals – I almost immediately lose interest in them.
Take my training and weight routine for example.
The moment I hit 80kg, my discipline dropped, I made lazy excuses and dropped the ball. I didn’t stick with it and lost 2kg in a month.
Because why not? Why should I keep up?
The dragon was killed. The mountain top has been reached.
It is a very unsatisfying truth. But I’m certainly not the first to discover it, or as Arthur Ashe put it: “Success is a journey, not a destination. The doing is often more important than the result.”
Having said that: I will try to enjoy the journey to 10 million euros, because I already know that once I have reached this goal, I will have to set the next one, even more ambitious, just to keep playing the game.