Along the Way

Just think about the number of people you have communed with over the span of your career(s). It actually started on the playground when we were young. It’s funny I watched my daughter one day go up to some kids on a playground and say “Hi my name is Erica would you like to play.” I saw two things: She was allowing strangers into her personal space and she showed the character of a leader. She didn’t say can I play with you -the follower route, but inviting them to play with her said “follow me”. Our friendships in high    school and college create lifelong relationships that extend as we explore our career path. Our playground folly evolves into networking; collecting a box full of business cards to pick from at a later date to become a bridge to solve a future problem. We now enter the realm of social capital, which research shows translates into financial capital. In The Founder’s Dilemmas, Noah Wasserman relates “…building connections with potential employees, customers, advisors, and investors…” to a “deep reservoir of resources” that gave one founder a huge advantage for his start-up. (47) This advantage converts friends and colleagues into sustainable investments. The best deals are not made in board rooms, but instead on the golf course, at dinner, or over a drink (i.e. informal settings). Business is not just business, but it is personal. These informal settings are less stressful and more engaging instead of combative and overall just a relaxed good time.

I think back to when I was in banking and the relationships that were formed at our social events carry their weight in gold. Even though I am in academia now, I can still reconnect with this sector of social capital for support. Wikipedia defines social capital as “…a form of economic and cultural capital in which social networks are central, transactions are marked by reciprocity, trust, and cooperation…. Social capital has been used to explain the improved performance of diverse groups, the growth of entrepreneurial firms, superior managerial performance, enhanced supply chain relations, the value derived from strategic alliances, and the evolution of communities.” When I see evolution of communities, I think isn’t that what business and industry do; make bigger, better and faster products and services. Human and social capital is at the heart of progress with reciprocal exchanges.

The Saguaro Seminar, Harvard Kennedy School states, “The central premise of social capital is that social networks have value. Social capital refers to the collective value of all “social networks” [who people know] and the inclinations that arise from these networks to do things for each other [“norms of reciprocity”].” Relationships are based on honesty, loyalty and trust. These same values turn a handshake into and inked deal. I agree with Wasserman in the quote above when he made the statement based upon age and experience of the entrepreneur. The people we meet and relationships we make along the way will prove to be a valuable resource when we step out into our place of entrepreneurship.

Putnam, D. Robert. Harvard Kennedy School,The Saguaro Seminar Civil Engagement in America (1997-2000). About Social Capital. Retrieved from https://www.hks.harvard.edu/programs/saguaro/about-social-capital

Social Capital. (n.d.) In Wikipedia. Retrieved September 11, 2016, from https://en.wikipedia.org/wiki/Social_capital.

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

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

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