A few times this week I've heard the term "Skin in the Game."
What it generally means is that you've put your own money into something--that you're risking something along side the people who are supporting you. I had an entrepreneur tell me that he put $75,000 of his own money into something because he thought it was important to have skin in the game. I also heard it when a prospective fund investor asked me what percentage of my "net worth" is invested in my fund.
I understand what people are trying to optimize for, but money doesn't motivate everyone. There are lots of people I know that care a lot more about pride, fame, or making a meaningful impact on the world a lot more than they care about money.
Not to mention the fact that money is all relative. I had a super successful serial entrepreneur tell me that a seed fund "wasn't a good way to make a lot of money" for myself. I thought to myself, "Pretty sure your conception of a lot of money is pretty different than my conception of a lot of money."
For the record, I have two levels of weath. One is to be able to buy any apartment I want in NYC in the exact location I want. The other? Owning a baseball team. In between, I'm honestly not sure what I'd do to change my lifestyle.
I'm also pretty sure that most serial entrepreneurs who have made money before are never risking so much capital that they're going to go homeless if their next venture doesn't work out. In fact, I don't know anyone that does that--it seems like a pretty terrible idea to be honest. So, assuming that none of us are going to go homeless if this next thing doesn't work out, what should really count as skin in the game?
When you're a public figure as I've been, I'm pretty sure that anything I do comes with a lot of skin--because if it doesn't work out, that's going to be a tough blog post to write. Trust me that it was a lot tougher to tell people that my startup didn't work out than it was for me to setup a payment plan to eliminate the $30k in debt I accumulated doing it. That part was super easy... it was a spreadsheet. The blog post was about pride and telling people was about protecting relationships with the people who invested in me. That part was hard.
So before you think you have a catch-all general motivational tool like "skin" and you think that's going to be a motivator for success, get to know the person you're backing a little more. If you're doing a startup, money is pretty much the last motivator and it's probably the thing they least care about losing.