Welcome back to our monthly series where we review books that offer the best advice for those new to the world of VC and startups! Our co-founder and managing partner, John Vrionis, is book-obsessed; if you visit our offices, you’ll find plenty of reading material to take home with you.

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We are a mission-driven team, and for plenty of us, this is our first foray into venture capital. We often look for advice from business experts, experienced founders, and startup operators to help us learn about building great companies. We’re eager to learn from the best and enthusiastic about passing on this knowledge to others!

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This month, we’re reviewing Built to Last: Successful Habits of Visionary Companies by Jim Collins and Jerry I. Porras, published in 1994. The early days of company building tend to be the most romanticized, but they are also some of the toughest and most opaque days in a founder's journey. We’re dedicated to helping founders navigate these early stages, and this book offers a few awesome tips (that we happen to agree with!).

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Building visionary companies that stand the test of time (especially in the worst of times) is central to the message of Built to Last. The authors posit that great founders are those who are prepared to kill, revise, and/or evolve their ideas, but who never give up on the company or their mission. Collins and Porras argue that visionary companies are widely admired by their peers and have a long track record of significantly impacting the world. They display a remarkable resilience to adversity and attain extraordinary long-term performance, eventually becoming the best in their industries.

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But, how do you build a visionary company as a founder?

Be a clock-builder, not a time-teller

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In Built to Last, the authors argue that visionary companies are led by “clock builders, not time tellers.” Having a great idea or being an innovative leader is “time telling”; building a company that can prosper far beyond the presence of any single leader and through multiple product life cycles is “clock building.” The most incredible creation for the founders of these companies is the company itself and what it stands for rather than any one particular product or feature.

Establish a simple core ideology

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A core ideology is not just the words you choose, but a vital shaping force that guides and inspires the people at your company for years to come. For example, at Unusual, we often talk about our “founder obsession” and working for LPs who are “forces for good” — this core ideology drives our work throughout the firm. This means that we stay true to our goal of supporting founders across all functions and delivering world class investment returns to LPs who are making the world better through education, healthcare, and research. 

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Visionary companies are generally as ideologically driven as they are profit-driven. They understand that profitability is crucial for survival and a way to achieve more significant goals, rather than a goal in itself. As Collins and Porras put it, these companies choose to have both ideology AND profits known as the “Genius of the AND,” or the ability to embrace both extremes of several dimensions at the same time.

Protect your core ideology by promoting from within

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A core ideology is crucial for a visionary company, but it’s not sufficient enough on its own. As Built to Last mentions, a visionary company preserves and protects its core ideology while simultaneously being open to change and evolution. The core ideology serves as a guiding principle, complemented by a relentless internal drive for progress in everything but the core ideology itself. This drive for improvement should never wane, even if the company experiences tremendous success. Visionary companies seek to be both highly ideological AND highly progressive at the same time.

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Relating back to Unusual’s core ideology of founder obsession. we are devoted to this central motivator while also being responsive to evolving factors such as challenging market conditions, and thinking about the impact those factors may have on our overall mission. 

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Collins and Porras say that a key step visionary companies utilize in preserving their core ideology is to prioritize the development and promotion of managerial talent from within the company. Bringing in top management from the outside can dilute or even destroy the company’s core. By continually cultivating leaders from within, visionary companies ensure a seamless succession process at all levels, which is essential for maintaining the integrity of their core values over the long term.

Find your Big Hairy Audacious Goal (BHAG)

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One mechanism that Collins and Porras found to stimulate progress is BHAGs, short for “Big Hairy Audacious Goals.” BHAGs are compelling and bold missions that serve as a unifying focal point of effort. These goals create team spirit and become ingrained in the institution, regardless of the leader in charge. Visionary companies often cultivate strong, almost “cult-like” cultures that reinforce the core and enhance a company’s ability to pursue BHAGs. Creating a powerful indoctrination into a core ideology develops that sense of being part of an elite organization that can accomplish just about anything.

Embrace evolutionary progress

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Another critical tool Collins and Porras found to be used by visionary companies is evolutionary progress. Whereas BHAG progress involves clear goals, evolutionary progress allows for ambiguity. Some of the best moves of visionary companies were not by detailed strategic planning but by experimentation, trial and error, opportunism, and “purposeful accidents.” Visionary companies seize opportunities and aggressively harness the power of evolution while remaining true to their core ideology.

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Collins and Porras emphasize that the most critical question asked at a visionary company is: “How can we do better tomorrow than we did today?” They institutionalize this question as a way of life, a habit of mind and action. Superb execution and performance are not an end goal but rather outcomes of a continuous cycle of self-driven improvements and investments for the future. Applying the lessons of this book, no matter who you are, contributes tremendously to building a visionary company.

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‍If you want to give Built to Last a read in full, we encourage you to do so! You can check out Jim Collins’ website to find out where the book is sold. And, make sure you’re subscribed to our newsletter to ensure you don’t miss next month’s book review and plenty of other content from our team.