There is a question every startup circle wears out: customers, employees, shareholders, who matters most?

For a long time I treated it as a values question, almost a moral one. Pick customers and you sound visionary. Pick employees and you sound humane. Pick shareholders and you sound realistic. Every answer is really just a way of signaling who you are.

It was during my second company that I realized the question is not about allegiance at all. It is asking: what is your company actually optimizing for?

Once you phrase it that way, it stops being a sentiment question and becomes an engineering one.

A lens I had underrated

On a recent episode of All-in, Friedberg was talking about SpaceX and casually walked through the plainest logic of capitalism. I replayed it three times, because I noticed how skewed my own understanding of it had been.

His breakdown went roughly like this. Employees contribute labor. Customers contribute revenue. Capital captures those results and compounds them. And the founder’s job is to build an organization where the value the company creates ends up larger than the sum of every individual contribution.

The weight is on that last clause. If the value only equals the sum of the inputs, the company has no reason to exist. Everyone could just go do their part alone. A company is justified only because it produces some surplus, some 1+1 greater than 2. And the person who makes that surplus happen, and keeps it from leaking away, is the founder.

Seen this way, a founder is not first the advocate for employees, nor for customers, nor even for the product.

A founder is, at the core, a capital allocator.

Inputs and outputs

I tried sorting founders by their unspoken instinct, and three types fell out. The product-driven founder believes: build a great product and value will follow. The employee-driven founder believes: assemble a great team and value will follow. The capital-driven founder believes: if value never shows up, then no product and no team can survive long enough to matter.

The first two are watching the input, treat “value will appear” as an article of faith. The third is watching the output, treats it as a hypothesis that still has to be proven.

As an engineer who became a founder, I know the first instinct intimately: revenue is the natural byproduct of an excellent product. People like me believe, deep down, that if the thing is good enough, the money is only a matter of time.

Many business-minded founders carry the opposite instinct: product excellence is merely a tool for creating revenue.

The two sentences differ by nothing more than which clause is subordinate. In practice they fork into hundreds of different decisions. Whether to spend three months on an elegant feature that makes no money. Whether to accept an ugly flow because it converts. Whether to hire the brilliant engineer who has no interest in the business. Behind every small choice, those two instincts are quietly fighting.

The company is the most important asset

Following this thread, I worked out an ordering that helps me. It is not a moral ranking. It is an optimization ranking.

Mission decides direction. Value creation decides whether you survive and scale. Customers verify whether the value is real. Employees provide the leverage to execute. Product carries the delivery of that value.

Here is the counterintuitive part. We are all in the habit of saying “employees are the company’s most important asset.” It is the politically correct line. But what the system actually rewards is the company itself.

Because employees leave. Products get replaced. Customers change. The one thing that keeps compounding, a firm that has accumulated capital, brand, network effects, and organizational capability, slowly turns into a value-creating machine more powerful than any single individual inside it. The most important asset is not a part inside the machine. It is the machine.

Admitting this makes me a little uncomfortable. But discomfort is usually the signal that a belief is being updated.

Belief becomes the optimization function

The line I keep turning over lately is this: a founder’s deepest belief eventually becomes the company’s optimization function.

If a founder believes at heart that the team matters most, the company tends toward harmony, toward mentorship, toward tolerating some loss of efficiency. If he believes the product matters most, the company tends toward an obsession with quality and craft, and tends to neglect sales and distribution. If he believes the company itself matters most, it tends to watch growth, leverage, capital efficiency, and long-term compounding.

None of these is inherently nobler than the others. But ten years out, those tiny defaults compound into completely different outcomes. The optimization function does not need to be called explicitly every day. It just stands at each fork and picks, on your behalf, the path you assumed was obvious.

So it is worth spending the time to ask yourself, plainly: what am I actually optimizing for?