Entrepreneurial Motivation

Tim O’Reilly offers three ways to sustain entrepreneurial motivation: work on what matters to you, create more value than you capture, and take the long view.

Entrepreneurial Motivation

Tim O’Reilly had a thought provoking post “Work on Stuff that Matters” on January 11. He starts with a clarification of  entrepreneurial motivation and what he means by “the social value of business done right”

First off, though, I want to make clear that “work on stuff that matters” does not mean focusing on non-profit work, “causes, or any other form of “do-goodism.” Non-profit projects often do matter a great deal, and people with tech skills can make important contributions, but it’s essential to get beyond that narrow box. I’m a strong believer in the social value of business done right. We need to build an economy in which the important things are paid for in self-sustaining ways rather than as charities to be funded out of the goodness of our hearts.

and then offers three guidelines

1. Work on Something That Matters to You More Than Money.
The entrepreneurs who first made the market often had much less expectation of easy success, and were instead wrestling, like Jacob with the angel, with a hard problem that they thought they could solve, or at the very least make a dent on. […] The most successful companies treat success as a byproduct of achieving their real goal, which is always something bigger and more important than they are.

By picking the right mission you also enable others to collaborate more effectively with you. Michael Schrage, who has studied collaboration in a variety of settings, has said that one clear rule of thumb has emerged. If you want talented people to collaborate, you have to pick a problem that they care about, and it is so hard that they realize they need to work together to make meaningful progress (for more on this see Shared Minds, No More Teams, or Serious Play)

2. Create More Value Than You Capture.
Most businesses do in fact create value for their community and their customers as well as themselves, and the most successful businesses do so in part by creating a self-reinforcing value loop with their customers.[…] How many people do you employ in fulfilling jobs? How many customers use your products to make their own living?

I think this good advice but very challenging to master. It’s easy to be clear on your own needs, harder to see how to co-evolve with a system of suppliers, partners, and customers in a community. Peter Drucker called “the worship of premium pricing” as first deadly sin of business: “The worship of premium pricing always creates a market for the competitor. And high profit margins do not equal maximum profits. Total profit is profit margin multiplied by turnover.  Maximum profit is thus obtained by the profit margin that yields the largest total profit flow, and that is usually the profit margin that produces optimum market standing.”

3. Take the Long View
It’s hard to see beyond the “small here” and the “short now,” especially if you live in a favored place and time.

Peter Drucker has observed that the second deadly sin of business is “mispricing a new product by charging ‘what the market will bear.’ This, too, creates risk-free opportunity for the competition.” Beyond any entrepreneur’s concerns for successfully establishing their company in a market are the obligations that we all have to our family and our community.

On January 13, Po Bronson’s “What Should I Do With My Life, Now?” was posted on the Fast Company website. He offers a perspective that acknowledges the need to work on stuff that matters but also admits of more practical motivations. He tells a version of the story of the three brick layers (I first heard it as three stonemasons) with a different emphasis.

There’s an old parable about the three bricklayers. They’re laying bricks all morning, and when they finally get a break, one guy asks the other two, “Why are you doing this job?”

The first guy says, “I’m doing it for the wages.”

The second guy says, “I’m doing it for my wife and kids.”

The third guy looks up at what they’ve been constructing all morning, which is a church — a place to get in touch with one’s highest self — and says, “I’m helping to build a cathedral.”

Now, most people hear this parable, and they think the third guy has the right answer, and the first two guys have the wrong answer. That’s the simplistic lesson that most people jump to, led their by their mythic notions of calling.

But that is not the lesson of the parable. In fact, all three men have a sense of purpose — have a “cathedral,” if you will. The third guy has the Cathedral of Spirituality. Good for him. But the second guy has his too. The Cathedral of Family. And the third guy has the Cathedral of Self-sufficiency. Those are all good purposes. Those are all right answers.

The real lesson of the parable is, notice what no man answered. Not one of the three said, “I just love laying bricks.” Doing something for the sheer love of it is not what real people mean when they say their work provides a sense of purpose. That is not how the construct a sense of meaning and rightness. Looking for it, in that form, is incredibly illusory.

I think many entrepreneurs are motivated as much by self-sufficiency, either at a personal or family level, as a higher calling. I think you elevate your goals, similar to Maslow’s “Hierarchy of Needs,” as more basic motivations are satisfied. Bronson seems to be rejecting Joseph Campbell’s “follow your bliss” but I think what he is really saying is that  pure doing is not enough–whether it’s writing code, writing books, sculpting, painting, etc.. I have to balance my obligations to myself, my family, and my community. This is at the heart of Tim O’Reilly’s three rules as well.

“If you do not have the capacity for happiness with a little money, great wealth will not bring it to you.” William Feather

“Life is too short to work at a job you hate, but everyone has to do something someone else is willing to pay them for.” Sid Emmert

Update Jan-18: Scott Shane, author of  Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By has an inaugural blog post on the US News website, it’s “Why Do People Become Entrepreneurs”

Researchers have identified myriad reasons why people start their own businesses, but across all of the surveys, interviews, and other efforts to understand entrepreneurial motivation, one reason stands out above all others: People start businesses because they don’t want to work for someone else.
Scott Shane in  “Why Do People Become Entrepreneurs”

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Image Credit: “Elephant” by Riyaad Minty (used with Attribution under creative commons)