The Incredible Power of Knowing Your Purpose

In recent years, there has been much debate about Tim Cook’s stint as Apple’s CEO. He’s been good, but does he live up to the precedent set by Steve Jobs? The aura around Apple felt different with Jobs at the helm.

Think back to the late 2000s. What did buying an iPhone mean to you? Were you purchasing hardware that allowed you to speak verbally with your friends who were far away? No, you already had that. Why buy an expensive phone from Apple, then?

You were buying innovation, and it happened to be a cell phone.

Start With Why

This is the power of having a clear purpose. When it’s executed at a high level, a meaningful purpose can offer an experience to each company stakeholder that transcends beyond even the product itself.

In his TED Talk and book Start With Why, Simon Sinek illustrates this concept with beautiful simplicity. Sinek describes the “Golden Circle” — three concentric circles. The innermost says “Why,” followed by “How,” then “What.”

He explains that a company’s Why, their purpose, needs to come first. The Why informs the How — how the company is different or better than the competition. And they both inform the What — the actual product.

Sinek says that most people act from the outside-in. Companies know What they do, and maybe How they do it better than the competitors. Few have a clear Why. As Sinek explains, your purpose isn’t just to make a profit — that is a result. Rather, “What’s your purpose? What’s your cause? What’s your belief?”

You may have purchased a phone from Apple, but what you really were buying into was their innovative purpose.

Your business

This is the reverse of how most consumers, and even business owners, think. What do you say when someone asks about your business? If you normally say, “we make [product],” then I challenge you to consider if you have a clear purpose, and therefore identity, for your company.

The value in having a powerful Why affects your employees, your investors, and your customers. Having a clear purpose gives them a message to buy into.

And a powerful Why gives your brand equity that extends beyond the product’s functionality.

Products eventually become outdated. Segments eventually become saturated. But a meaningful purpose that is recognized by the public extends beyond all of that. That equity can enable your business to maintain your customers’ trust when you expand to new categories.

In a practical sense, having a defined Golden Circle for your business will help you set goals more effectively. If you know what your purpose is, you need to set and achieve short-term goals that are in line with your Why and bring you closer to it.

Defendable territory

In the book, Sinek describes that competitors may try to copy the success of companies with a strong Why.

One example he reviewed was Southwest Airlines. When they started, they presented themselves as accessible, and “the champion of the common man.” They were low cost. Delta and United eventually launched low-cost options to compete with Southwest, but they were not financial successes.

Sinek explains that they copied Southwest’s How, offering a low-cost airline service, but they weren’t able to imitate their Why. Southwest’s customers believe that flying Southwest says something about their identity.

When executed well consistently, a Why cannot be effectively mimicked.

Your life

Further still, having a clear purpose can be valuable in your personal life too.

What measure do you use to guide your decisions? How should you spend your time and money? Having a Why for your own life will empower you to make these choices with certainty.

So, in all that you do, remember your purpose. It can be your compass. Don’t forget to “Start with Why.”


Mr. SR is a financial writer focusing on personal finance, behavioral economics, and early retirement. His home site is and he is on Twitter @semiretireplan.

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