How can you tell if a company is going to be successful?
If you’ve got a clear answer to that, congratulations, you’re probably the best investor alive.
The truth is, none of us really know.
At the earliest stages, investors aren’t betting on numbers or models. They’re betting on people, on their drive, their reputation, their story. It’s all intuition and a bit of hope. Later on, as the company grows, the numbers start to matter more and more. Profitability, margins, growth rates, eventually, they become the whole picture.
That shift makes sense. When a company is just a handful of people, individuals can make all the difference. But once it grows, what really matters is the system, the structure, the organization, the machine that turns ideas into output. And numbers are simply how we read that machine.
Still, when I’m looking at a new idea, there’s one simple question I always come back to:
How can I make money with this?
It sounds blunt, but it’s a great filter. The purpose of a business, any business, is to make money. So how does money flow into this company? How does it grow while it’s there? And how does it flow back out?
This question is especially useful when you’re building tools. If the tool you’re making doesn’t help me make more money, why should I use it?
Look at the most successful businesses out there. They’re all close to the flow of money. Payments, finance, logistics, marketplaces, all deal directly with how money moves. The further away you are from that flow, the harder it becomes to capture value. There’s a reason traders and bankers get paid so much: they’re sitting right next to the source.
Of course, there are exceptions. Facebook, for instance, didn’t start with a clear "how does this make money" plan. And open source software, by this logic, shouldn’t even exist. Yet here we are.
But even then, money has a funny way of sneaking back into the picture. Maybe not right away, but eventually. Because money is the ultimate motivator for most people. If your business helps others make money, it becomes a no-brainer. People will show up, contribute, and try their luck.
Take the defense sector, for example. It’s not directly about making money; money is just the fuel. But think of it differently: without defense, there’s no economy. If you die, the game’s over. In that sense, defense grows when instability grows. It’s an indirect, but powerful, relationship with money.
So when you’re evaluating a new idea, always ask about its relationship to money:
How can people make money using this company’s product or service?
How does money come in, and what happens to it inside?
How does it go back out?
It’s not the only question to ask, but it’s one that always brings clarity. Because in the end, the closer you are to the flow of money, the stronger your business will stand.