Wednesday, March 7, 2012

Wasserman's Choice: Avarice or Control?

The Kauffman foundation is promoting new books that they've funded on the topics of entrepreneurship and innovation. Among them is "The Founder's Dilemmas" by Noam Wasserman. I linked to find details, in hopes that I could download a sample on my Kindle. On Amazon's website, I was deceived by the lack of details into purchasing an inexpensive download of a Harvard Business Review article of the same title (only singular) by the same author. I guess I should have checked the page count (9 vs. 448 for the book).

In any case, I read the article, reinforcing my view that I am not among the target audience for Harvard Business Review. A few highlights from the article:
Most entrepreneurs want to make pots of money and run the show.
... you must choose between money and power.
... entrepreneurs as a class make only as much money as they could have if they had been employees. In fact, entrepreneurs make less, if you account for the higher risk. What's more, in my experience, founders often make decisions that conflict with the wealth-maximization principle.
... There is, of course, another factor motivating entrepreneurs along with the desire to become wealthy: the drive to create and lead an organization.
... Entrepreneurs face a choice, at every step, between making money and managing their ventures.
And on it goes. According to Wasserman, there are only two notable motivations for entrepreneurs, making money and having power. I don't know about you, but I don't list avarice and control among my top priorities. That doesn't mean that I've taken an oath of poverty and weakness, it's simply that as far as striking my top motivations to being an entrepreneur, Wasserman and HBR shoot wide of the mark.

What are my priorities and motivations? If I had to choose two they would be: freedom and accomplishment. I seek the freedom to pursue my interests, and the knowledge that the work I engage in will have a meaningful impact on society. But freedom is not quite the same thing as control, and accomplishment is surely not the same as wealth. Now I believe these are not mutually exclusive, but if I have a choice between power and a sense of accomplishment, or between wealth and freedom, my decisions would be easy.

But there's more to it than that. Just what entrepreneurs is he talking about? After completing my PhD, I spent about three years full-time just trying to get a faculty position, which in the best of circumstances would have garnered me an income of $45-60k/year (possibly less), would have required me to serve on numerous committees, and at least for the first several years would have left me little freedom to choose what classes I would teach. Suffice it to say, I earn more as an entrepreneur than those prospects offered (and multiples of the $15k gross I was earning as an adjunct), along with freedom and a sense of accomplishment. And I've been honored with creating meaningful jobs for others to boot.

Wasserman presents a false dichotomy: if I am willing to accept the prospect that someone else might be better poised to lead my firm to commercialization and profitability, then I must be motivated to be rich; and if I prefer to lead the company myself, then I prefer to be king. Truth is, the choices I make along the way will likely be guided by those twin motivations of freedom and accomplishment. And I'm okay with that.

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