When Hope is a Winning Strategy

It’s often been said that hope is not a strategy, but that doesn’t mean it can’t be a key part of your business plan. On Episode 4 of Netflix’s “The Sandman”, Dream of the Endless (also known as ‘Dream’) goes to Hell to retrieve his helmet stolen by a demon named Choronzon. To get back his prized possession, Dream has to engage in and win a contest of wit and creativity, called “The Oldest Game” against Lucifer Morningstar, the ruler of Hell. A player begins by introducing a concept or threat, and the opponent counters with an opposite and more powerful concept, until one player is ultimately outsmarted. Dream and Lucifer both challenge each other by shape-shifting and taking on new physical forms – Lucifer begins by transforming into a wolf, to which Dream responds by becoming a hunter. Lucifer then becomes a serpent, followed by bacteria, and so on, until eventually he becomes “Anti-Life” (i.e. the end of everything). To this, Dream declares, “I am hope”, which stumps Lucifer and helps Dream win the game. In this case, hope turned out to literally be the winning strategy; and it’s for this reason that while hope may not be the entirety of your strategy in life and business, I would like to argue that hope should at least be an essential part of your strategy.

This year turned out to be a stressful and difficult year for the startup ecosystem. It seemed to mark the end of the Golden Age of tech startups – much like the Golden Age in the Greek myth “The Ages of Man”, which ended with the revenge that Zeus, King of the Gods, took on Prometheus for stealing fire from the heavens to give to the humans. That revenge came in the form of Pandora, who opened a jar (not a box!) that had been left in her care, thereby releasing sickness, death and several other evils onto the world! The hot and fiery market of 2021 seems to have resulted in the opening of a Pandora’s box of troubles for tech startups, resulting in layoffs, down rounds and shutdowns in the ecosystem.

But all is not lost; what is less well-known about the Pandora myth is that even Pandora acted quickly and ended up holding one item back from spilling out of that jar. Hesiod’s “Works and Days” which describes a popular version of the Pandora myth says, “Only Hope was left within her unbreakable house, she remained under the lip of the jar, and did not fly away. Before [she could], Pandora replaced the lid of the jar”. There is always hope!

What is hope?

Hope is not to be confused with pure optimism or wishful thinking. I’ve learnt that hope is much more of an active verb. And this is why it could end up being a significant part of your strategy as you look towards 2023. According to the late Charles R. Snyder, who was a psychologist at the University of Kansas and a pioneer of research on hope, hope is defined as “a positive motivational state that is based on an interactively derived sense of successful (a) agency (goal-directed energy) and (b) pathways (planning to meet goals)”. Snyder’s “Hope Theory” has three components – goals, pathways (strategies for achieving the goals), and agency (motivation to achieve the goals). 

Hope as a strategy 

With this definition and understanding of Snyder’s hope theory, let’s look at how a startup founder can use hope as a strategy under the current tough market environment. The first step in this process is to define some goals. An appropriate goal for most startups under the current conditions is to extend their runway by cutting burn. An even better goal is to get profitable. Setting up smaller goals that one can achieve as steps towards the larger goal can add to the positive emotions of this hope process. Smaller goals can be getting to unit profitability for example – earning profits at city-level, or even profits pre-overheads (cleanly and without hiding behind definitions and accounting creativity). It could also mean smaller short-term goals like getting gross margins up by 1% each month.

The second step is to create strategies or pathways to these goals. The founder should create a primary pathway which has high probability to succeed in getting them to the goal. For example, getting to profitability at high probability would mean more cost measures (controllable and hence a higher chance of achieving it) versus revenue levers (which may not be in our control). High-hope people (which founders should be) are also very good at producing plausible alternate routes to the primary route. According to Snyder’s research, high-hope people describe themselves as being flexible thinkers who easily find alternative routes to reach their goals, whereas low-hope people report being less flexible and less likely to produce additional routes to achieve their goals. In other words, founders should have a plan B!

The final step is to find the motivation to achieve these goals. There are several factors that can drive this motivation. For starters, if founders are thinking about raising incremental capital – and if this can be a motivator – it is only likely to be available to companies that are profitable, near profitable or have a clear path to profits, without making outrageous assumptions on growth. Beyond external factors, a strong motivation for founders to achieve this goal of profitability, is to win their freedom by breaking away from capital raising and external market dependency. Profitable companies control their destiny and have a chance to become enduring businesses.

According to Snyder, the high-hope person (i.e. high pathways and high agency) will have iterative pathways and agentic thought that is fluid and fast throughout the pursuit of achieving their goal. In short, founders who want to use hope as a strategy should be nimble, creative and iterative in their approach to company-building.

Leveraging the ecosystem 

According to further research on hope, a key additional aspect of making this work is the importance of expanding one’s horizon beyond themselves to explore how their experience within an interpersonal context may facilitate the emergence of hope. For example, the sharing of experiences with others may be a crucial factor that builds social bonds, allowing individuals to soothe the experience of negative emotions that arise from stressful events, and tap into the knowledge and experience of others to help create pathways toward goals. In other words, high-hope people seek support from their community – other founders, team members, investors – to find motivation and pathways to their goals. They seek outside views and ideas actively. Remember, you are not in this alone and don’t have to solve all problems from scratch or by yourself!

The Netflix series “The Sandman”, is actually based on Neil Gaiman’s comic series of the same name, which has an insightful statement on “The Oldest Game”: “There are many ways to lose the oldest game. Failure of nerve, hesitation, being unable to shift into a defensive shape. Lack of imagination”. When hope needs to be a winning strategy, this is exactly how founders need to play “The Oldest Game” in the current context – with decisiveness when it comes to costs, creativity when it comes to pathways to goals, and with conviction to follow those pathways.

As we say goodbye to 2022, I wish you hope and resilience to take on any challenges the new year may bring. Merry Christmas, happy holidays, and cheers to 2023!

Recommended Reads

Here are three articles I read over the last few weeks that I found interesting:

Nike is definitely my favorite sports shoe brand and they have grown to own a dominant share (>25%) of the global sports footwear market. But beyond their well-designed products, what stands out even more is their catchy marketing. All of us likely know Nike’s slogan “Just do it!”, but what I didn’t know was the interesting backstory to how the slogan came about. In this Business Insider piece, they claim that the iconic slogan, created in 1988, was inspired by the last words of a double-murderer from Utah!

As we ring in the new year, your friends and well-wishers are probably going to wish you a happy new year soon; and it’s likely you’ll continue to work towards finding that happiness in life. But what does it take to achieve happiness? In a blog titled “A few lessons on happiness after a lifetime of chasing it”, author and former Chairman of Microsoft India, Ravi Venkatesan shares his learnings on happiness and how to find it. In summary he says, “Happiness comes from wanting what you get rather than getting what you want.” A valuable insight indeed!

“Here is how you used Zoom” is an interesting blog by Zoom on how people have used the communication platform over the last year. Some interesting takeaways including Tuesday being the busy meeting day – not Mondays as I would have expected – and not surprisingly, Friday being the slowest. There are also some interesting differences between how Gen Z, Millennials, Gen X and Baby Boomers use communication tools – Gen Z being the most video friendly bunch, while Boomers are fans of the (Zoom) phone!

If you have time for a longer read, here are three books I’d like to recommend.

Change Your Questions, Change Your Life, by Marilee Adams

My YPO forum recommended this book and it is one of those books that as its title suggests has the power to change your life! The author introduces us to a powerful framework called “Question Thinking” through a storytelling format that makes this book a breeze to read. I highly recommend this book and have already gifted this to a few people who I thought could benefit from it. Read this if you want to improve your relationships across both personal and professional domains.

A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan, by Ben Carlson

Written with public markets as a reference, this book is a useful reminder that many times simple solutions work better than complex strategies. There is now enough research to back how rules-based decision making trumps other forms of making decisions because of how it removes emotions from the process. This book talks about how stock picking, asset allocation, diversification, and long-term patient compounding trumps other so-called sophisticated investment strategies.

You Can Heal Your Life, by Louise Hay

A friend recommended this book to me while we were discussing the topic of healing. This book is similar to “Dying to Be Me” which I had recommended in an earlier newsletter. The core premise of the book is that your thoughts manifest your future, and hence you can attract a better life through positive affirmations and self-love. A good read with accompanying exercises to practice what is recommended by the author.

Do write in at gv@peakxv.com if any of my interests intersect with yours! Click here to read more articles on Peak XV’s blog. For more editions of Connecting the Dots, click here. I’m also on LinkedIn and Twitter.