Benefit Entrepreneur Avoid Greed, Hatred and Delusion

 In Benefit Venture Blog, Purpose, Reflections, Stakeholder Capitalism

Benefit Entrepreneur: Greed, hatred and delusion are characteristics inimical to successful startup. And no, thisbenefit entrepreneur reflection is neither a polemic on business, nor about foolish entrepreneurs. It not a Buddhist tract on the so-called Three Poisons1, even though greed, hatred and delusion are poisonous to getting a new business off the ground. In the rush of getting into business it is worth a few moments of introspection to think about these things.

Our personalities probably embody one or more of these characteristics to greater or lesser extent. If we can recognize the poison, and know its antidote, we can let it go. So, what makes a benefit entrepreneur different?

Benefit Entrepreneur—Greed… or Generosity

If you manifest the selfish grasping of greed in the business setting, it will very quickly become apparent to customers and create a negative commercial atmosphere, let alone to your partners or colleagues in your endeavors. It’s much better to demonstrate beneficial values in all that you do—as a benefit entrepreneur.

Examples of greed might show up in your pricing policy or in your terms and conditions of business. When an airline jacks up prices at busy holiday times, the result may be for their long term sales to be adversely affected. Price gouging is a pejorative term referring to the spiking of prices of goods or services to a level much higher than is considered reasonable or fair, and is considered exploitative, potentially to an unethical, and often illegal, extent.

It seems that after the 2017 hurricane Maria, some installers of the Tesla Powerwall home solar battery in Puerto Rico were overcharging as much as much as 50% above the price that Tesla lists on its website. Not surprisingly, the company stopped shipping product to those gougers. Many see generosity as the opposite of greed, and generosity begets more generosity. Startups particularly need that virtuous cycle of beneficial values.

If that is so, I wonder how wage disparity makes and sense from a business perspective. In startups, chances are high that that income ratios between top and bottom are not huge, but the 2022 annual Executive Paywatch Report by the AFL-CIO that has tracked CEO-to-worker pay ratios for over 20 years, reveals that S&P 500 CEOs averaged $18.3 million in compensation for 2021—324 times the median worker’s pay. I suggest that an organization cannot create unity of purpose with such disparity and the successful entrepreneur should take active steps to avoid such a pay disparity creep as the business gains traction.

Generosity is generally seen as the antidote to greed. The ground in between is difficult to navigate. One act of generosity does not cut it. Generosity of spirit is tough to define, but I have noticed that the new generation of entrepreneurs, the people to whom I give the name Benefit Entrepreneur, manifest a generosity of spirit and practice beneficial values, in that they tend not be those shifting negative effects downstream, concerning themselves with benefits for all stakeholders and not passing on costs to others—thus demonstrating those beneficial values.

Benefit Entrepreneur—Hatred… or Compassion

I know of no business that sets out to value hatred. But there are examples of businesses that manifest hatred in their practices and a company’s HR policy can certainly display an absence of compassion for employees. For instance by refusing flexible working, especially for married employees, denying birth control coverage in health insurance policies, or meanness in vacation days. Think about how beneficial values might lead you to very different employment policies.

Hatred is a strong word, but may be inferred in lack of respect shown either to employees or customers—or even demonstrations of a lack of trust. Ungenerous product returns policies may demonstrate both greed and hatred. Certainly when you hear a customer service agent tell you, ‘I can’t do that; it’s company policy’, or ‘I can’t do that either, it’s above my pay grade.’ Such statements show disrespect both for staff and customers in one blow—and show the opposite of beneficial values.

There is a sense that compassion infers suffering together—or prospering together in ways that benefit all stakeholders. The Builders Fund, for example seeks to invest in entrepreneurial companies which improve the world, led by values-driven management teams building activist brands and cultures with scalable, profitable business models. There is no inherent conflict between those aims.

The Texas Business Organizations Code, now has a business form called Public Benefit Corporations, like similar forms in many other States. The Texas law states that, “social purposes may include providing low-income or underserved individuals or communities with beneficial products or services; promoting economic opportunity for individuals or communities; preserving the environment; improving human health; promoting the arts, sciences, or advancement of knowledge; increasing the flow of capital to entities with a social purposes; and conferring any particular benefit on society or the environment.”

Benefit Entrepreneur—Delusion… or Understanding

Many managers think that if the business follows a set of steps prescribed by management gurus and demonstrate strategies like a positive corporate culture and focus on the customer, they will succeed. However, they will frequently discover that success does not follow. “We did everything right,” they’ll say, bemused. We are easily deluded and fail to understand what is really happening. Following the formula does not work in business.

We have to understand the uncertainty of the market place and be really awake to the factors beyond our control. None of us is omniscient, however much we want the world to make sense. We can have no certainties, but face plenty of probabilities. The successful entrepreneur has a strong inner strength to deal with these uncertainties and can pivot on a dime. This speed of reaction is something to maintain as the venture grows, avoiding the sclerosis that so often can set in after early success. Keep improving the odds, since actions and outcomes are not always causally linked.

A cautionary tale for the benefit entrepreneur

Once upon a time

Kodak was a company, formed by George Eastman in 1880, that dominated the photographic market worldwide and their name was synonymous with photography, as well as cinematography.

Every day

people all over the world were taking photographs and making movies using Kodak film and radiographers did the same with x-rays; in its heyday Kodak employed 140,000 people. Most images were commercially processed.

One day

a Kodak employee, Steven Sasson, invented the digital camera (1975); the word ‘pixel’ became widely known, though published by Fred Billingsley at the Jet Propulsion Lab ten years earlier, as a contraction of ‘picture’ and ‘element’.

Because of that

the invention spawned many new companies anxious to take advantage of digital imagery, while top management at Kodak failed to appreciate the potential of the patent they held, and these newcomers could bypass Kodak’s distribution network, ‘processing’ their own images.

Because of that

the use of the new electronic technology grew massively as the predilection for hard prints waned rapidly. Users found new applications, as Kodak maintained its attachment to legacy assets and entrenched culture, failing to develop a meaningful strategy for change.

Until finally

showing how easy it is to get things wrong, and miss the opportunities of convergence, Kodak went into bankruptcy in 2012; attempts to sell its digital imaging patents had largely failed. The company emerged, much chastened and smaller (4,700 people) about a year later.

To look at the issues of beneficial values in different ways, here are some other relevant Venture Founders posts:

1 I practice Insight Meditation—for full disclosure.

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