Entrepreneurship is a path that has always been painted in the media as a fairytale. When we think of entrepreneurs what comes to mind are people who ventured into business and successfully built companies in a big way. We think of the Elon musks of Tesla and SpaceX, of the Bill Gates of Microsoft, Aliko Dangote of Dangote Group, of Strive Masiyiwa of Econet, and other successful entrepreneurs. What we don’t think about are those who miserably failed in their entrepreneurship journey, and also the journey itself, how hard and challenging it can be.
As someone who grew up in the African context, the question whether anyone deserves to have a 90% stake has been on mind for some time and many such questions such as is it ethical, why and why not? And if it is really that hard as some people claim it is.
Entrepreneurs have always existed, even before the late stage of capitalism that we are currently experiencing. In a literal sense people have always created systems of creations of goods and services that address societal problems and that is really what entrepreneurship is in a nutshell: The creation of enterprises.
In recent years, the only difference was the complexity that was introduced with mixing entrepreneurship and investments; as well as the skyrocketing of capital cost, competition, globalization, regulation and risks. For example if one needed to invest in animal farming, it was as easy as acquiring a few startup animals and raising them up until they begin producing.
In our days, entrepreneurship is synonymous with high risk, high value creation and huge cash flow. For those who have done it before. Anyone you talk to, ascertains that it is the hardest thing to do. Yet, you find others preaching that it is the assured way to gain independence and prosperity. For a fact, entrepreneurship is both a high risk and high reward route, the question for me is whether, regardless of how hard the path may be, is ethical and even appropriate for founders to get such high percentages that many ended up in their companies.
Building a company or an organization is more than executing laid out strategies. If it was planning steps and executing all business schools professors would be millionaires. They master the theories and processes that make companies more successful, yet some of them are not even able to manage their households. That shows how that entrepreneurship is more than just classroom work, processes, theories, it takes a person who is both classroom smart, a visionary, as strategist, calculated risk taker but yet resilient enough to weather the storms.
Mark Zuckerberg, the CEO of Facebook, once in his speech at Harvard University talked about how at one time Facebook was approached by a potential buyer with a good offer to acquire Facebook. Everyone on the management team believed the right decision was to sell the company and cashout. However, Zuckerberg had a different vision for the company, he thought Facebook was more than just the company and even more valuable than they were offering. As the CEO and Co-founder, he took the final decision that the company was rejecting the offer, hence resulting in the departure of everyone on the management team.
In the immediate, Zuckerberg began to question whether he had taken the right decision or not and even started to think, he may have gone overboard. However, he kept moving, keeping in mind of the mission and the goals that he had when starting the business.
There are more examples of ordeals that founders go through while both starting, bootstrapping, pivoting and operationalizing their companies. The non-trivial hurdle is the level of uncertainty and risk that entrepreneurs have to undertake. Currently it is nearly impossible to start and grow a company without high capital investments either from the founders themselves, from venture capitalists or banks. All of these, along with the pressure to build a company reside for the most part on the founders.
In conclusion, after all, without the founders, companies won’t exist. Taking into account the ordeals, they have to go through; it is only right that they themselves determine the stake they choose in companies in a way that positions sustainably all of its stakeholders: investors, employees and the communities they serve. For sure building a company is hard; as to whether it is worth it? Only time tells and one can only know if one tries.
This article was written primarily for Wallas’s upcoming blog wallasplanet.com while in the process of building Standard Gateway. Visit our platforms for more information about what we have in store for you. www.standardgateway.com, edrivingschool.org, www.nationalexamination.com
Source: Zuckerberg Havard Speech: https://news.harvard.edu/gazette/story/2017/05/mark-zuckerbergs-speech-as-written-for-harvards-class-of-2017/
