The Entrepreneur and The Enterprise

Seth Godin likes to challenge people with this question:
“Do you want to be a freelancer, or an entrepreneur?”
There’s no wrong answer – the only mistake is to not be honest about what you’re doing.

A freelancer builds themselves their dream job, whereas an entrepreneur builds a business that is bigger than themselves.
For example, my consulting work and this website are me being a freelancer, I don’t intend for another team to take over in the future.
By contrast, The Difference Incubator was started by Bessi Graham and Paul Steele, and is still going strong even after they’ve both stepped back from the business.

The relationship between an entrepreneur and their enterprise is incredibly tricky, a series of battles and dilemmas that tend to age people at a rapid rate.
There’s a constant tension that is tough to balance; how much of the business is you, versus being its own entity?
Or put another way, can someone else run the business, or does it only work if you’re involved?

Remember, if it doesn’t work without you, you’ve created a job and not a business.
That’s ok, but we need to be clear on what is actually going on.

In the beginning, you are your business are like a venn diagram with 100% overlap.
It’s essentially just one circle.
Over time, those circles drift further and further apart, and this is where the tension comes in.
I got to live this first-hand, as The Difference Incubator’s first employee.
Essentially, I lived in the part of the Venn diagram that didn’t have the founders in it.
This became tricky – I learned the hard way about all the hidden assumptions and deeply held philosophies that underpinned the enterprise.

These became immediately apparent whenever I did something wrong – Bessi and Paul never blamed me, but I had to quickly learn about why they believed what they believed, and how it should shape the business’s decisions.
One example was their concept of “Blended Value” – the idea that you can make money and have impact simultaneously, without it being a middling compromise.
It took nine months for it to click, and to understand the deeper meaning of this approach, and only then could I start building Blended Value business models.

Personal Goals vs Enterprise Goals
This is often an awkward topic, but a valuable conversation I get to have with each entrepreneur.
What’s the difference between your business’s goals, and your personal goals?
Which aspirations might you need to fulfil outside of this particular entity?

When push comes to shove, which elements of the business can be dropped, and pursued again in the future?
For example, if you want to be a high-end fashion designer, what happens if your testing reveals that there’s no sustainable model in making high-end clothing?

What if it’s in the business’s interests to pursue a lower end strategy, especially if that creates twice as much social impact?
Your natural inclination will be to object and resist, but will you let your ego stop your business from growing into something special?

Again, by naming the conflict you instantly make it easier to resolve.
It might be that you need to gradually build a list of things to pursue in the future, what Donald Roos calls “The To-Don’t List”, of all the good things that you’re not going to do right now.

Personal Values vs Company Values
We’ve recently examined how good values can make your business more successful.
Which of your values are to do with you, and which are critical for your organisation after you’ve left?
Which of Apple’s values were based on Steve Jobs, which were from Jony Ive and which ones are still driving the company today?
If you’ve ever said “Apple are losing their way” in the last few years, this might be why.

For The Difference Incubator, our values were driven by our founders;
Pioneering, Uncompromising and Relational.
The challenge now is determining which of these we keep, and when to add/change new values in based on who’s currently in charge.

At Business For Development, we have a similar challenge; the approaches that fuelled the business a decade ago might not be right for the next decade.
It’s why we give each project manager some freedom in how they operate, whilst holding our core philosophies tightly.

Hiring New Staff
When you hire new people, you’re always going to be bringing on people who have different ideas and approaches.
This is not a weakness, a business full of clones with struggle to grow and adapt to changes in the market.

The real question is: what personal traits are integral to the enterprise?
Or put another way: which personal traits do you like, versus which ones are vital for the business to succeed?
These fuel your dealbreakers – the sacred criteria that make you reject otherwise talented people.
What does each team member need to believe about your social mission?
How do you expect them to treat their colleagues?
How do you expect them to treat your customers?
When should they be defiant of the world pressuring them to change?
When should they be open minded to new ways of working?

Personal Brand vs Company Brand
Starting a social enterprise is a good way to build your personal brand.
However, building your personal brand does not always help your social enterprise.
I say that for two reasons.
Firstly, personal brands rebound at different speeds to company reputations.
If you pick a fight or say something controversial, you get to reap the consequences of your choices, for better and for worse.
Sometimes it’s good to pick a fight, and being a social entrepreneur usually means you believe things that others will find controversial.
We also all make mistakes, and none of us would want all of our careless comments published in the media.
Worse still, we’re sometimes labelled negatively from afar, even if the evidence is inaccurate or from someone with a grudge against us.
The difference is that when you win, you get the credit, but when you lose, your organisation gets questioned and heckled.
In other words, your business cops the downside but receives less of the upside.

Secondly, you and your business are probably going to part ways in a decade or so.
Your reputation is an intangible asset, but one that you take away when you leave.
For example, do conferences want to hear from you-the-personal-brand, or do they want to hear from the head of the company?
If you start a new project, will the conference invite you back, or will they instead ask for your successor?
This is a confronting question, but it needs to be asked.
Obviously the best outcome is that you grow both brands simultaneously, but when push comes to shove which one will win?

Exit Strategy
If you’re an entrepreneur, I’m guessing you started your social enterprise because you’re passionate about a cause and an industry.
That’s often the best way to begin.
You’ll probably install a board – both because it’s a good idea and because it might be legally required.
The board are a stabilising presence, who make decisions dispassionately.

There’s a great quote about this in the Tarantino movie The Hateful Eight, from a hangman:
“The man who pulls the lever that breaks your neck, will be a dispassionate man. And that dispassion, is the very essence of justice. For justice delivered without dispassion, is always in danger, of not being justice.”

 I feel this encapsulates the tension between an entrepreneur and their board.
You’ve created something out of passion, but eventually it’s sustained success will come from good, dispassionate decisions.
I bet your passion doesn’t go away.
What happens when you feel passionately about changing industries, launching new products, acquiring a rival company, acquiring a friendly company, taking on debt, expanding into a new market … and your board don’t agree?

I can’t answer that for you, but I know the answer isn’t “stack the board with people exactly like myself”.
It’s worth thinking about now – will it mean you sell the business, start a new company or install an operations manager?
Do you want to keep some shares or join the board?

Having seen a lot of talented entrepreneurs grapple with the labour pains of creating a new entity, I can confirm that there is no fixed formula.
There are however, some good principles:

• You and your business are two brands, and should be treated differently.
• Great leaders know they’ll have to explain their core principles out to their team 100 times a year.
• Great leaders spot and recruit people who bring the attributes that can’t be taught.
• No enterprise can fulfil all of your ambitions simultaneously
• If you’re seen to treat people well in one enterprise, you’ll often receive invitations to work on other fascinating projects.