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What Do You Want – Money or Power?

Jun 7, 2019 | Brad Tanner

Entrepreneurs are often told that the founder must struggle with a “control versus wealth” dichotomy. So, we ask budding entrepreneurs, “Do you want to become rich or do you want to be in charge?” If the assumption is that the entrepreneur is solely seeking capital appreciation, we may advise the Founder CEO to give up control as fast as possible. If a faster runner comes along you should give the baton to them, right? The more folks rowing your boat the faster it will go.

In fact, this is an artificial construct that mirrors the assumption that monetary wealth is the only way to measure value. Many folks decide that because they can’t measure it, it doesn’t exist. Are you captive to that false assumption? If so, then a single yardstick (capital appreciation) can fool you and prior economists to determine that that yardstick is sufficient proxy for value.

Craigslist, Wikipedia, Apache, Linux, MySQL, LibreOffice, and Firefox are all enormously valuable, yet their success did not translate to capital appreciation.Today’s entrepreneurs are not the Robber Barons of old. It is rare that the only motivation is money. Most folks have a sense of fairness, ethical behavior, environmental sustainability, equity, and positive impact. At some time these other values will challenge a steadfast emphasis on monetary gain. As one replaces “wealth” with “value” the dichotomy falls apart.

Control and value are not dichotomous. Tight control can yield or destroy value, and lead to a loss of control. For example, a lack of control by the founder can generate a lack of value placed on social responsibility and subsequent production of a company with minimal or negative social impact. In fact, that choice may lead to destroying monetary value as well if the customers also value social impact. Do folks really think that one can launch a successful company that sells a product that kills people (e.g., the tobacco industry)?

If the personal definition of value is more nuanced and a non-monetary reason for a desire for control is defined, a simple function won’t do. To be fair to the entrepreneur and guide them in the choices they need to make, we must develop a more broad definition of the trade-offs associated with value creation.

The first step is to define the personal value of control:

  • Do you want control because you have a vision of something that is truly unique?
  • Do you want control because otherwise you have no clue what you do with your time?
  • Is the purpose of control to ensure that you and only you tell you what to do?
  • Do you want to be invcontrol because you get bored doing the same thing?
  • Do you seek out flexibility to engage in opportunities you didn’t foresee?
  • Alternatively, are you tired and would rather be a spectator than a player?

Value can vary as well. All these models of control seeking and avoiding can achieve different types of value:

  • Where does social responsibility fit in?
  • Do you care about externalities?
  • Is compensation parity an issue?

The control vs. value debate is thus not a battle or a trade-off, but the start of an internal and external conversation, and an exploration of how the two relate for you. That isn’t as simple as a dichotomous model, but our brains are pretty sophisticated.

Reducing motivation to two options was inevitably simplistic.

  • How much control over the direction of the startup do you want and what are the personal and external motivations?
  • What value do you want to create? Assuming there are multiple components, how do you rank them in importance or weigh them?
  • If it turns out that you cannot achieve all your potential values, which one is more flexible for you? What value will you give up?
  • Most importantly, how does your being in control map to obtaining value? In other words, without your efforts, would the value still be realized?

Answer the questions now and write them down. Later, when an investor asks you to change your control or the direction of the company, you’ll have an answer and a guide for what direction to go. Over time, one’s desire for control changes as does what we value. Be prepared to ask the questions again; the answers might not be the same.

The vision of an entrepreneur as someone who wants to become fabulously rich or powerful is pervasive. And we expect that to achieve the goal they need to tirelessly work 80+ hours a week and demonstrate to third-party investors on a daily basis that they are willing to forgo everything to make money for them. Instead, perhaps entrepreneurs are people with new ideas who want to work with others to launch them. Entrepreneurship in America is actually decreasing, despite all the resources that are available here versus elsewhere in the world. Perhaps we should stop focusing on burning out entrepreneurs by locking them into a treadmill assuming that value equals money, and instead focus on capturing their creativity and energy.

Photo Credit: Omnidirectional treadmill immersive simulator.JPG Author: David Carmein Licensing: Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License.

Category: Business Tagged: entrepreneurship

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Keep Reading

Lessons Learned From It’s A Jungle In There (Part 5 of 5)

Aug 23, 2019

Overall, It’s a Jungle in There had some interesting ideas that can apply to building your business. Chapter-by-chapter ideas included:

  1. Be a risk-taker.
  2. Be passionate.
  3. Don’t fall for “Get a life” or “Take it easy.“ Be ambitious (see passion).
  4. Dream about the future.
  5. Multitask.
  6. Come up with a product, believe in it, and sell it.
  7. Be the best you can be.
  8. Pay attention to detail.
  9. Look out for the next big thing.
  10. Do R&D and learn new things.
  11. Make improvements.
  12. Make sure folks can find your product and go to the customer to make a sale.
  13. Pay attention to the budget and spend wisely, but don’t cheap out.
  14. Improve efficiency through strategic partnerships.
  15. You, the entrepreneur, are a product. Sell yourself.
  16. Don’t quit – persevere. Clear objectives should guide you. Set a goal and clear objectives. Use them to tell you when you have arrived. A setback can be assessed against the purpose and objectives. If the impediment is that Google is doing it now, your goal just got stomped on and it’s time to create another goal. If your goal was to create an app and you found out four others already exist, then persevering is foolish. If your objective was to be done in two weeks, and you are only half done, then adjust your schedule and get moving. Figure out what got in the way.
  17. Don’t accept a rejection from someone; don’t quit too early. Sure, hit the wall, step back, and then try again. There are situations where you can ask 100 people. A rejection from one means there are 99 other people to ask. You can ask that first person again, or you can move on. In other cases, there are only one or two people (say, you invited your state’s senators to come to your launch and both rejected you). Dig deep and keep trying. You only have two options.
  18. Failure is just success in disguise. The business world is full of “learn from your failures” advice. It makes sense. But learn from your successes, too. Learn from other people’s failures. Learn from their successes, too.The broader statement is “learn.” Every chance you get, see what you can learn and apply that to your next activity.
  19. Be positive. That’s easier said than done. The author says “I’ve never had a bad day.” Most of us cannot say that; self-deception is not easy. But, the point is, don’t get down on yourself or your situation. Take each challenge as an opportunity to see something new. But, really, it’s okay to have a bad day. The good news is that the sun seems to keep rising every morning. Tomorrow (if this is not the movie Groundhog Day) there will be a new day.
  20. Care about people and things.
  21. Make people feel good. Praise is cheap and useful.
  22. Help others out
  23. Shape your image of yourself.
  24. Connect with the media.
  25. Be truthful.
  26. Don’t burn bridges. Don’t throw away things in anger. Don’t keep everything either, but pause before you discard your creation.
  27. Be socially responsible.
  28. Give something back. What comes around goes around.

Further Reading

  • Schussler Steven, Karlins Marvin. It’s a Jungle in There: Inspiring Lessons, Hard-Won Insights, and Other Acts of Entrepreneurial Daring. Vol Reprint edition. New York: Sterling. February 7, 2012.

Picture Credit: Wikipedia user Roehrsb under the Creative Commons Attribution-Share Alike 4.0 International license

Let Good Times Destruct the Status Quo (Part 2 of 3)

Oct 12, 2018

Last week we described a theory that creative destruction happens because of downturns that spur new solutions, and the lack of a downturn in the health economy is why medical education is stagnant.

An alternative model found that in fact creative destruction happens during periods of growth not recession. Think of the dot com bubble that spawned Google. Facebook also launched in a time of plenty. Uber arrived after the crisis of 2008 was over and has been on a tear ever since; they’re now the leader in driver-less cars and trucks. So, an abundant IPO and M&A environment that is full of resources spawns even more opportunities for creative destruction.

Certainly health care has done nothing but grow and in several markets (e.g. Pittsburgh and UPMC) consolidation and integration and rapid growth are pretty obvious. With all that money sloshing around it should have led to enormous opportunities for creative destruction. Sure medical schools have replaced dark, depressing lecture halls with windowed learning environments full of round tables and projectors, and others have built huge simulation centers with mannequins and rooms for standardized patients. But if one contrasts that with the growth of Apple and the impact of the iPhone or Google and search, it’s clear that the enormous riches of healthcare (17% of GNP and growing) haven’t translated to enormous change.

Why not?

Perhaps paranoia and fear of a recession is really the key. A history of a growth period following a recession would include a sense of anxiety (i.e. “we’ve got to be ready!”) about the potential for another recession. Without a past recession (such as we had in 2008 for real estate especially and other markets but not health care) there is no anxiety going forward. So, easy or constrained flow of money is not the key to creative destruction. Money just enables such destruction when combined with anxiety about being ready to weather the next storm. And thus with medical schools and their hospitals as the top revenue generation for universities, and hospital CEOs and VPs among the highest paid executives in universities, there is little need for the health care industry to worry that the days of growth are coming to an end.

Picture Credit: Medical Office Careers

Multitasking Is Really Task Switching and Doesn’t Work (Part 2 of 5)

Jul 12, 2019

Chapter 5 of It’s a Jungle in There recommends that an entrepreneur be a multi-tasker. Some activities can be completed simultaneously, such as listening to a podcast and exercising. However, for cognitive tasks, divided attention is merely task-switching. That is, the person is not actually accomplishing two things at once, but one is rapidly switching between two different activities. The high rate of accidents seen with individuals who are attempting to drive and text demonstrates the difficulty of accomplishing two cognitive tasks at the same time.

The human brain cannot “multi-task” just as most computers cannot. [Multi-threaded computers do process things at the same time, which is both wonderful and kind of scary]. Computers can task-switch really fast and pay no penalty as they switch, but people do.

The penalty for biologically-based intelligence is attentional inertia. When we switch, some of the attention is still focused on the older task. The time spent between task-switching can be relatively rapid and yield little loss of productivity if the cognitive load is small. Chess masters can play multiple games at the same time because, for them, each game is actually a relatively simple task.

As an example, for short-term task switching the delay can be up to 27 seconds for simple verbal actions when driving. Typical interruptions have long-term consequences. The exact figure is probably not obtainable, but the data is clear that we are not computers – we pay the price for distractions and task switching.

How about even more complicated cognitive tasks? Activities, especially those requiring high cognitive activity, take some significant time to return back to their previous level of efficiency. Since it takes time for human brains to recover from task switching/distraction, with each interruption, we lose time and focus, and it takes us time to recover. For more complicated tasks, some estimate 23 minutes and 15 seconds to recover from a distraction. Others identify 10-minute effort to get “back on track.” Assume that with each one it takes 5 to 15 minutes to get back to where you were (full speed ahead, making progress). The more interruptions, the worse it gets. Eventually, we don’t do either task very well. In reality, if they come more often than 10 minutes, most likely one is actually never hitting full speed concerning focus.

In other words, if one is pondering the future of the company and designing a mission statement, it is best to stay on that task and not multi-task when phone rings, or someone else asks for your attention, or a new email shows up. The author attributes his desire and interest in multi-tasking to undiagnosed or undiscovered attention deficit disorder. Whether that diagnosis is accurate or not, the point is that his approach to problems uniquely works for him. One might also argue that it not only works for him, but it works with the enterprise that he is trying to start. In contrast, the typical recommendation based on the above reality is to focus and pay careful attention to the task at hand. One must attempt to reach a conclusion before moving on to another action. As an aside, most treatment of ADHD stresses the need to have a thoughtful plan to guide activities and to decrease distractions to increase the ability to focus and improve productivity.

So, stay focused, but don’t get stuck on a single task. Switching a function to another one is the proper choice when one is not making progress or realizes that the task is far more difficult than initially anticipated. And, emergencies do arise where one has to stop one task and pick up another one. But, again, one is not multi-tasking, one is redirecting attention based on priority. In this case, when the fire is put out, go back and address the more minor concern.

Further Reading

  • Schussler Steven, Karlins Marvin. It’s a Jungle in There: Inspiring Lessons, Hard-Won Insights, and Other Acts of Entrepreneurial Daring. Vol Reprint edition. New York: Sterling. February 7, 2012.
  • Attentional inertia and delayed orienting of spatial attention in task-switching. Longman, Cai S.; Lavric, Aureliu; Munteanu, Cristian; Monsell, Stephen Journal of Experimental Psychology: Human Perception and Performance, Vol 40(4), Aug 2014, 1580-1602. http://dx.doi.org/10.1037/a0036552 [full article]
  • Gloria Mark
    • Book: Multitasking in the Digital Age (Synthesis Lectures on Human-Centered Informatics)
    • Mark, G., Gonzalez, V., and Harris, J. No Task Left Behind? Examining the Nature of Fragmented Work. Proceedings of CHI’05, (2005), 113-120.
    • Gloria Mark, Daniela Gudith, and Ulrich Klocke. 2008. The Cost of Interrupted Work: More Speed and Stress. In Proceedings of the SIGCHI Conference on Human Factors in Computing Systems (CHI ’08). ACM, New York, NY, USA, 107-110. DOI=http://dx.doi.org/10.1145/1357054.1357072
    • Video
    • Interviews:
      • Too Many Interruptions at Work?,
      • Worker, Interrupted: The Cost of Task Switching
  • Iqbal, S.T. and E. Horvitz, Disruption and recovery of computing tasks: Field study, analysis, and directions, Proceedings of CHI 2007, 677-686.
  • Sanbonmatsu DM, Strayer DL, Medeiros-Ward N, Watson JM (2013) Who Multi-Tasks and Why? Multi-Tasking Ability, Perceived Multi-Tasking Ability, Impulsivity, and Sensation Seeking. PLoS ONE 8(1): e54402
  • Articles:
    • Brain, Interrupted – a 20% drop in score from an interruption
    • How Frequent Task Switching is Ruining Your Productivity
    • The Science Behind Task Interruption and Time Management
    • The distraction economy: how technology downgraded attention – Tomas Chamorro-Premuzic
  • Nicolas Carr: The Shallows: What the Internet Is Doing to Our Brains

Photo Credit: Wikipedia user Takamorry under the Creative Commons Attribution-Share Alike 2.0 Generic license and Airman Sadie Colbert Released 150802-F-MZ237-054.JPG. On official US Air Force Government Website

Previous Post: « Building Social and Financial Capital
Next Post: To Succeed You Need to Risk Everything and Be Stubborn – NOT! (Part 1 of 5) »
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