The Definitive Guide to Business

I quit my job and built a billion-dollar company–these 4 lessons were crucial to my success

Okta co-founder and CEO Todd McKinnon.
Source: Okta
Okta co-founder and CEO Todd McKinnon.

Nearly a decade ago, I quit my job to start a tech company, and it was one of the hardest things I've ever done. I technically had other options: I could've continued working at an established company or taken a stable, lucrative opportunity elsewhere. Instead, I created a PowerPoint presentation for my wife that explained the market opportunity and my financial plan to make it happen. She wasn't convinced initially, but by the end of my presentation, she was my first convert.

"Your vision should guide all aspects of your business, so write it down, share it with all stakeholders and evangelize it."

I saw an opportunity to start something new and potentially groundbreaking, and I knew I had to take it. The company I co-founded listed on Nasdaq last year, and we now have around 1,300 employees across the world.

When I look back at where my co-founder and I started, I realized that setting the right goals at the right time was critical throughout our entire journey. Almost 10 years later, I've taken away four key lessons about the art of setting goals.

Stretch, stretch, stretch

I was working for Salesforce in 2009 when I decided to start Okta, an identity management company that connects people with any application on any device. Many people, including my wife, told me I was crazy; the economy was in a downturn, and many skeptics doubted cloud computing had a real future. These circumstances easily suggested it wasn't the right time to chase my dream of becoming an entrepreneur.

But I knew we could do it for two reasons: the cloud market showed momentum and we were ready to stretch to meet the demand. The same goes for any entrepreneur considering making a jump. If you see a real opportunity and you're willing to stretch and sacrifice to build the solution, you might be ready to take the next step.

The first thing you should consider when setting stretch goals is timing. For stretch goals over a longer period, it's important note the likely outcome if you don't reach it. Setting a goal of reading 50 books in a year, for example, may be an audacious goal for the casual reader, but reaching only 25 would still lead to a positive outcome. Setting a goal of losing 100 pounds in three months, however, is not only impractical, it's detrimental to your health. Your one-month partial progress is also likely to show the negative impact of that damage.

It's also important to set goals that feel uncomfortable. If you want to know whether you're stretching far enough, ask yourself whether you can easily accomplish it within the next year. If the answer is yes, keep stretching. Remember, it's a fine balance – an easy goal won't get you anywhere, and an impossible goal can ultimately discourage you and your team.

Know when to take small steps

While stretching worked in this scenario, we knew we had to save our stretch goals for initiatives that wouldn't break us. That's where strategically setting short-term goals to get motivated came into play. For us, it was setting a target to have a certain number of customers live by the end of the year. How many? Not 50, not 25 or even 10. Our goal was to get five customers.

It wasn't audacious, but it was achievable, which was exactly what we needed to get started. If we aimed for 50, we would have risked spreading ourselves too thin, thus halting our ability to properly support each customer.

You can take this approach in the workplace, too. When setting goals, there's only one factor you need to consider: the likelihood of success. We didn't know if we could get 10 customers, but we knew we could get five, which is all we needed to take the next step.

"...it's a fine balance – an easy goal won't get you anywhere, and an impossible goal can ultimately discourage you and your team."

These small steps are critical when you're just starting out, or if morale is low. That's when the need for incremental progress outweighs the need to break industry barriers. Setting strong, short-term goals will keep you laser-focused on a marker that you know can help get you to the next phase of your business.

Don't be afraid to change course

Knowing when and how to adjust your trajectory is just as important as setting strong goals. Early on at Okta, based on our own research, we thought our primary target market was employers, so we set goals to specifically meet their needs. We then found that groups outside of organizations, like customers, contractors and partners, were also interested in Okta's services. As a result, we adjusted our road map and set goals that would meet their needs, too.

That experience taught me that goals are flexible, and that it's important to your change short-term (and even long-term) goals if they're no longer relevant. You'll know it's time to change course when you get new data that closes one path or opens a new path.

Start with your vision

There's no definitive way to set your goals. As long as you connect your objectives to your vision, your goals will get you to where you want to go.

Your vision should guide all aspects of your business, so write it down, share it with all stakeholders and evangelize it. Then ask everyone in your organization to map their vision, methods and goals back to the company vision; they will feel shared ownership in the company's success.

When we started Okta, we didn't set out to add a certain number of customers or go public by a specific date. Instead, our long-term vision was (and continues to be) to build a technology company that enables any organization to use any technology. Acquiring five customers was one goal, and listing on Nasdaq was another as we laid that foundation.

Todd McKinnon is the CEO and co-founder of Okta, the leading independent provider of identity for the enterprise. Todd is responsible for creating, communicating and implementing the vision and strategy for the company, which securely connects people and technology in thousands of organizations, including 20th Century Fox, JetBlue, Nordstrom, Slack, Teach for America and Twilio.

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