For Money or Merit

When a person decides to step out of their comfort zones of stability and step into the uncertainties of entrepreneurship where time and chance rule, they need to establish one underlying motivator. Will you embrace wealth or control? In his book The Founder’s Dilemma, Noam Wasserman suggests that when founders must make a decision between profit or control, they must first identify their motivation. (Wasserman, 13) Societal motivations range from changing the world to changing your world. What is the driving force behind your out into; out of your current status into your new standing? Is it job dissatisfaction, upward mobility, financial and creative freedom, or pursuit of passion and making a difference? There isn’t a right or wrong answer, but an answer must be chosen to avoid costly delays and derailments.

Lahle Wolfe contrasts those driven by passion and money in her blog Thinking of Starting a Business? Are You Money-Motivated or Passion Driven?. She states, “If your motivation is to start a business doing something you are passionate about with the goal of turning into a full-time living, you are likely to suffer from fewer emotional setbacks and entrepreneur burnout when you find out it takes time to build independent wealth. You will be more patient with yourself and your business as it grows, and, will make better business decisions.” In contrast, “Business owners that are exclusively motivated by money often have unreasonable expectations of getting rich quick. When monetary goals are your only important goals, you will miss out on the many other rewards of being self-employed including sense of accomplishment, purpose, and the rewards of knowing you are doing something worthwhile with your life.”

One blogger felt it was impossible to have both. (Perfect Shot Range) But many court the thought of having a lucrative business with total control. However, in order to bring balance to their creative endeavor, the scale will need to be tipped in one direction or the other. Wasserman states, “A founder who knows whether wealth or control is his or her primary motivation will have an easier time making decisions and can make consistent decisions that increase the chances of reaching the desired outcome-Rich or King.” (Wasserman, 14-15) His Wealth-versus-Control Dilemmas chart gives the perspective founder a clear view of the trade-offs of the two, ending with the blunt reality that value is diminished by maintaining control and control is jeopardized by building financial value. (17)

We cannot speak of wealth and control without looking through the lens of power. Those who possess wealth, sit on the throne of power. “…wealth can be seen as a ‘resource’ that is very useful in exercising power.” (Domhoff) This power rears its head in the political, social and economic arenas. Let’s look at media mogul, Oprah Winfrey. If an author receives a favorable book review from her, it is guaranteed to be a million dollar best seller. She endorses Barack Obama as the presidential candidate in 2008. Rachel Ray and Dr. Phil gained spin-off TV series from Oprah exposure or what’s known as the Oprah Effect. But when Oprah wanted to maintain control and launched her OWN Network, there was a crash and some burning.  The New York Times reported only relative success as a result of layoffs in the second year and intense scrutiny from the industry because of her celebrity status. She admitted to prematurely launching the network and aggressive projections contributed to the growing pains in its infancy stage. But time and chance, by the way of partnerships has proven fruitful for the media mogul. (NYT) Oprah’s choice of control shifted her wealth, but recovery is sweet.

Resources

Brett. (2014, September 2). Reflections on Wealth vs. Control. Retrieved September 2, 2016, from http://perfectshotrange.com/?p=29

Domhoff, G. William. (2013, February). Who Rules America? Wealth, Income, and Power. Retrieved from http://www2.ucsc.edu/whorulesamerica/power/wealth.html

Stelter, Brian. “Winfrey’s Channel Is Set to Break Through.” The New York Times, January 17, 2013. Accessed September 3, 2016. http://www.nytimes.com/2013/01/18/business/media/winfreys-low-rated-cable-channel-is-poised-to-break-through.html?_r=1

Wasserman, Noam. (2012) The Founder’s Dilemmas. Princeton, NJ: Princeton University Press.

Wolfe, Lahle. (2015, September 28). Thinking of Starting a Business? Are You Money-Motivated or Passion Driven? Reasonable Wealth Expectations Begin With The Right Motives. Retrieved September 2, 2016, from https://www.thebalance.com/business-passion-vs-money-3515777

8 thoughts on “For Money or Merit”

  1. Michelle,

    Excellent post! I particularly like the inclusion of the concept of power. Many associate power with money, social capital, or in some cases privilege. I appreciate you adding that aspect to the thread of conversation in this space.

    If you had to come down on one side or the other (and not having the cake and eating it too :)) – which side do you think you would lean – cash or control – in your own personal pursuits? This was a fun question for me as I had never really thought them mutually exclusive, but then upon further review (particularly through the eyes of Wasserman) I realized – that in practice, most of the time, they are. Anyway – thank you for including the concept of “power” into this conversation as I think that is truly an extension of both cash and control.

  2. I love it. Finally someone who talks about passion to do what you love. Why start your own business if it is not something you are passionate about? I love it. very well written and made me want more.

  3. Michelle,

    First of all, I LOVE your writing style. This was a long, well researched post, but it was as clear and easy to read as a magazine article. You have a future as a blogger!

    I loved the introduction of power and passion to this conversation. The idea that control is a power issue is one that is definitely worth exploring further. As founder, it really does rest in your scope of decision-making to determine how much power you are willing to share (and thus how much control you give up). This is particularly important when you reach the stage of hiring your first employees. Deciding if they support you or if you will be more collaborative and work as a team can really set the stage for your organization as it grows and evolves. Recognizing that you don’t have to know everything, do everything and be everything (and that trying will likely limit the growth of your organization) is a major step.

    I will definitely be following your blog and look forward to your future posts!

    Jeremiah

  4. Passion is what drives many people to start a business. Control is another driver. A thought for you is this; what if a person’s passion is to see their small town grow and thrive. My passion is seeing small businesses grow. I like to research what little towns are lacking and how to bring more businesses to the area.

    I enjoyed reading you article. Very insightful and thank you for sharing another blog also.

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