Golden Ratio Model

Not talking about KGR or SEO.

Whenever I coach people in my LaunchPad program, and even before that, there are three things I will press on:

  • Process Driven
  • Goal Driven
  • Instinct Driven


Many new starting entrepreneurs have enormous expectations and think building business is easy street.
But reality will set them on a boulevard of broken dreams (yes that’s a song from Green Day if remember correctly)


And when things are piling up and starts to look like a dumpster fire, it’s unpleasant to say the least.

But within a hot mess, I like to apply a golden ratio.

‘The golden ratio has been used to analyze the proportions of natural objects and artificial systems’


Fine, it sounds far stretched, but I apply golden ratio (Fibonacci) in capital markets which is not uncommon.

The keyword is proportions.


The golden ratio appears in some patterns, including the spiral arrangement of leaves.
So next time you see a flower and those leaves are perfectly aligned — Think golden ratio.

But going back to the topic and why I like to apply golden ratio to business is how I would approach a new venture, trajectory or cleaning up that hot mess.


Proportions


The three key elements I highlighted are not equally divided when starting out, and it’s up to you to actually for a more streamlined version, aka a golden ratio.

Problem lots of people have is to categorize and prioritize tasks or elements when building a business. And just like my one of my favorite quote says:

Greats never sacrifice the important for the urgent. They handle the immediate problem and still make sure to secure the future.

If people would take three elements into consideration, they would find clarity on any layer in the business.


Process Driven



A while back I laid out my process with the emergence principle and how I would go from research to execution.

The problem with that for inexperienced people? They don’t have the ability yet to rely on their own instincts or decision making process to actually work on a lean process that would work for them.

Because working process driven, doesn’t mean a lot without actual goals.


Goal Driven


To build a better process, goals should be present before you even start building a business. Goals can differ for each individual and will likely change overtime. The issue most people have is that goals should be split. Split between short term aggro vs long-term 2-3 years.

Goals could include:

  • Revenue
  • Obtaining first client
  • Defining ICPs
  • Build a landing page
  • Exit the business
  • etc


In early stage, goals are more prominent than the process itself, simply because you need to figure out the goals you want to tackle before building an internal framework with a process driven mindset. So the ratio is not proportional yet.


Instinct Driven

Good entrepreneurs work by the book. Great entrepreneurs have developed better instinct to react to the markets, trends or have the ability to anticipate.


Which is part of the resilience bracket and anti-fragility.
Starting founders barely have the right instincts, and rely solely on processes taught, outside feedback or advice, but are still going in blindly making attempts to make it work.

For example:


Whether you need to pivot or persevere in business is data driven backed, but a huge part of that comes from instinct.



My instincts were not the same as today, and with confidence I can say that instinctive reactions or actions helped me navigate the process and goals set. Just like poker players that have work on reading people, it’s their instinct that can determine if they want to make a hero call or fold.

Getting There


I found myself more than once in a spot when things are going south, and every time I can save myself or the business thinking back about the sequence and golden ratio model.


There are dozens, if not hundreds of moving parts in starting a business, and everything at start is out of proportion. But deconstructing it and build a better ratio between those three helps you gain momentum much faster.


With too much of imbalance between them, you are most likely to fail long-term. It’s up to you if you want to shoot for a better golden ratio and increase your chances of success.

Close


I want to highlight that I use this deviation from the Fib sequence and golden ratio for myself. And apply it whenever I can. It doesn’t mean it’s always going to work for you. But revealing some details here would give you a better sense of how I approach things.


I always care about exposure and risk. And if I am exposed too much on one side, that means I need to take steps back to build a better model for myself. Entrepreneurship is not only analyzing the business, but also placing yourself constantly under a microscope where you should be honest with yourself whether you developed enough intuition and instinct to react.


The mental game of entrepreneurship is highly correlated with the golden ratio, because it influences all three elements at once.


Starting a business is easy, maintaining it and survive for a decade is another thing.

  • For more focused advice or actual coaching, I would suggest to take a look at LaunchPad.
  • If you are looking for a more private circle of entrepreneurs, then you can join me on Discord with FocusX
  • Looking to start out? NanoBets might be a great place to start with.