Three Circles of Happiness, Lecture by Shai Agassi / SAP AG (2007)

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Mirror what happens in nature and science in business. And the first one is the distance is measured the same way no matter way you look at it from; up, down or bottom, up. The distance between success and failure is that timing. You just don't know it. The guys who have been complete and out of failures at their start-ups could have been just three days away from being superstars. They just didn't know it. They could've just dived in and walked one more mile and made it.

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The importance of money. Everybody ask me the same question now that I quit, "So, what does money mean to you?" I continue to say the same thing, money is like air. If you guys go into business in order to make money, you're already in the wrong business. But if you think about the meaning of money, you don't sense air, there's a lot of air around us right now. It's really hard for us to sense it. When do you sense air? When you got no air. When you're in a vacuum, you'll appreciate air. Same thing happens with money. You'll sense money when you don't have it. We sensed money on those, that evening, the first time because I had two weeks worth of salaries to pay that evening. After I had to bargain a lot, I basically put all my money into the company. That night, I bargained with my dad that we'll keep on going for two more weeks. I went out the window on the balcony and there was a full moon and I told myself, "I got enough money for the moon, the moon goes out, I go out." And that's when you count the money. Not on any other day. It doesn't matter afterwards. There's only one guy that will be really, really happy when you make a lot of money, that's your private banker. Because after a certain amount you can't spend it but he makes more money every time you make more. So, think of money as your time measurement. And think of yourself as walking in a desert. Entrepreneurs are optimists by nature. We will walk into a desert with half as much water as we need to cross the desert knowing that we will find more water some way on the path. And it's not always true. You always think you can do it all with less money than what you really need. And how many venture capitals are in the audience? That's their business model. They know that you're an optimist. As a matter of fact they cater to it. And they are great friends of yours. Throughout the process they have water. And you don't.

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Pendulum swings define everything inside corporations, not the relationships you will have with your employees or you as an employee when you work in a company.Employees see kinetic energy. You see, they sit on the ball and they see the speed of the ball. CEOs see potential energy. It's very hard to measure potential energy. But the potential energy plus kinetic energy is a constant. And so, you have to remember that there is a big discrepancy between those two perceptions as a world. I saw the beginning of the relationship with SAP. They saw the end of the work we're doing with Baan. They didn't know where all the people were going to to create momentum because the momentum is going into potential energy. Now, what holds this thing and allows you to go higher and higher and higher energy is the string. And the string are your people. The stronger your people, the more combined energy you can get.But that's the Physics of start-ups. It's all summarized in that formula of pendulum swings. Remember one thing, though, the people are sitting on the ball. It's a very scary proposition no matter what happens because it goes up, it goes down they sense the wind. And when it stops for a brief second, when you change direction, it's the scariest moment for them because they don't know if it stopped or if it's about to break and fall apart. Have you ever seen a pendulum break? It really goes downhill from there. So, keep that in mind when you're managing it.

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And a lot of people go out in trying to find what's the next thing you're going to do. And so, what I did was I ran in Jim Collins in my life. Jim Collins is a professor here and he defines these three circles that you need to sort of coincide in order for you to be, I believe, to be happy. One of them is a question about what your passion is. What are you really passionate about? Because if you're not passionate about something it's really hard to wake up in the morning and go do it everyday for 15 years. And so I asked my question, "What am I really passionate about in life?" And I came back with a set of things that was totally different than just beating Oracle or just building yet another version of software. I was born in Israel; I feel a huge debt to Israel. I was very passionate about Israel. I mean, I get really annoyed when I hear news, bad news coming from Israel. So, that means I'm passionate. I'm very, very passionate after seeing Al Gore on stage live here at Stanford about climate change. And I'm very passionate about making sure my kids know what to do with their life when they grow up. So, I've looked at these things and I say, "Okay, how do you do something about peace in the Middle East? Climate change? All these things? Big passions? Huge questions?" Second question is, "What are you the best at in the world?" So, I asked that question, "What really am I best in?" And it's not just, I didn't think it was to do software. What I'm really good at is taking really big problems and breaking them into a lot of small problems, solving the small problems or finding people who can solve the small problems and then putting it back together into a whole system. I'm a problem solver. And so, I said, "Okay, what technological problem can you solve that affects peace in the Middle East and climate change?" And the last question is the economic driver. And I'm not economically driven anymore by making more money. But when I'm economically driven is by making a business that makes a lot of money so that it scales by itself, it's sort of a self funding model. So, that's the third piece.