Stakeholder Startup

Stakeholder Startup Community Well-being

Stakeholder Startup—Community Commonweal: Entrepreneurs make a moral choice when they graphic of human characteristics and business images like graphs and pie diagrams to illustrate 'Commonwealth' startup in business, whether consciously or unconsciously. The choice is between greed or generosity. Really? Yes, really. Entrepreneurial motivations are many and various, but the implicit or overt purpose of the new enterprise will be to create wealth for the founders, or to create well-being for stakeholders.

The word commonwealth has a range of meanings and origins. The concept of commonweal was current over 500 years ago and referred to the public good, the general welfare of the nation or community. It involved well-being, prosperity, or happiness. Over the centuries the word commonweal became commonwealth in current usage.

If you live in America, you live in a commonwealth and four States actually designate themselves as Commonwealths: Kentucky, Massachusetts, Pennsylvania, and Virginia. If you live in United Kingdom, you are in in one country of The Commonwealth, an association of the UK and a number of its former dependencies.

Consider commonwealth from a wider perspective. The word’s origins go back many centuries and derives from its two parts. The first part, ‘common’ is from the Middle Ages and refers to a body of people united by some common interest; as in common land, for example. The second part, ‘wealth’, we now take to mean an abundance of valuable material possessions or resources. The meaning of wealth (or weal, as it was then) in the twelfth century was: the state or condition of happiness, well-being, joy.

A startup commonwealth is a business focused on well-being—as well as profit.

Entrepreneurial Purpose

The purpose of entrepreneurs who create a stakeholder startup is not only to flourish in business terms, but also to:

enhance innovation and creativity
encourage happiness and satisfaction
demonstrate the benefits of interdependence
strengthen relationships with all stakeholders.

These purposes, if well executed, will help to develop a venture that inspires employees, positively impacts the startup ecosystem, as well as supporting the community at large. Entrepreneurs with a strong moral sensitivity are likely create a startup commonwealth, as second nature beyond any financial motivation.

“I hate it when people call themselves ‘entrepreneurs’ when what they’re really trying to do is launch a startup, and then sell or go public, so they can cash in and move on.” This Steve Jobs quote is from Walter Isacson’s biography of him. It’s typical of many who think entrepreneurs are just in it for the money, whereas the best are driven by a deeper purpose—doing something meaningful.

Create a Stakeholder Startup

Image of a business puzzle involving many to illustrate a startup commonwealth The entrepreneurs ambition and decision to aim at their stakeholder startup’s commonwealth status is clearly to create a an enterprise of a very different sort to prevalent current norms. The stakeholder startup should expect considerable skepticism from many component members and institutions of the business world. Experts as varied as accountants and lawyers are likely to caution against ‘going against the grain’ and current norms of business.

Piecing together this particular puzzle will take a clear plan to demonstrate to those experts a businesslike set of steps towards your purpose, to get them aboard your trajectory.

Consider the possibility right from the get-go, because the implications will impact many other steps along the way. They will include ownership, governance & company structure, business form and registration, recruitment (e.g. pay & ratios, candidate experience/attitudes, hiring methods), marketing/sales strategies and implementation, and many other issues.
How will the stakeholder startup concept be protected and enhanced over time as the business grows and becomes more complex—to convince all stakeholders. As the company develops, be awake to the constraints an opportunities presented by different ownership governance structures. One striking example finding increasing favor in the US is the Employee Ownership Trust (EOT). Project Equity provides a very helpful introduction in Demystifying EOTs. A good place to start in any considerations of employee ownership in general is the Department of Labor has a relatively little known Employee Ownership Initiative of the Employee Benefits Security Administration. Another growing concept is that of the Community Interest Company. CICs are limited companies which operate to provide a benefit to the community they serve. The purpose of a CIC is primarily one of community benefit, rather than private profit.

Think carefully about issues related to reputation building and integrity, such as whether to seek BCorp certification, and make meaning as well as money. Quite apart from industry or international standards relevant to your sector, how will lofty aims like embodying equity or sustainability, be manifest in daily operations and establish the company’s way of being. To help you think about this issue, see Credentialing and Certification at Faster Capital.
As founders, research and document your own eventual exit from the business in ways that will not threaten or undermine the intent to make the world a better place. Chart progressive ways to take action on transfer of ownership and management that enables your successors to maintain the vision. As someone who has ‘been there, done that’, I heartily recommend that you read From Founder to Future (ISBN 9781523006816) by John Abrams, the founder and CEO of South Mountain Company, an architecture, building and renewable energy business, which he converted into a worker coop in 1987. The champion of creating CommonWealth companies, John Abrams would be very good to talk with and discuss your own options.

The stakeholder startup concept embodies many of the ideas expressed elsewhere on the Venture Founders website. Here are many of them:

Share Value(s) for Positive Outcomes

Embody Human Values

Ensure the Venture Delivers

Attract Compatible Funding

Start Well and End Better