It’s a good idea to understand what motivates you when you become an entrepreneur. You might be surprised to figure out that money isn’t the only driving force or even the prime motivator.
A number of years ago a woman from an investing entity visited me. She told me that she was interested in buying a position in our private company and speculated that a number of our long-standing shareholders would already have expressed an interest in selling their shares and gaining some liquidity. She positioned her firm as being in a solid financial position where she could provide not just the money to buy out shareholders but growth capital as well. Part of her pitch was to enable a clean-up of small shareholdings and replace multiple shareholders with a large one, namely, her, and the other part was to get the company financially stabilized to accelerate growth. We had a productive discussion.
Down and dirty details
As we wrapped up the discussion about the buyout of our shareholders, I asked if Dave and I could sell a small number of shares to alleviate the financial pressures that we had endured from years of no or low pay. Without skipping a beat, she said, “No, we want to keep you chained to your desk and hungry.” She could have stopped there, but she didn’t. She asserted that if she had to, she would whip us (I assumed metaphorically).
I thought for a few seconds as I heard her reaction to what I thought was a very reasonable question, and then I said in a very low voice, “I think that you will find that we are like mules. The more that you whip us, the more that we will lie down and not work.”
Deal is off the table
Needless to say, no deal was reached with this potential financing party. We saw each other through the years and she continued to connect with me on occasion. Her potential to get inside our company was over when her true feelings about how she would deal with us tangibly and emotionally were revealed.
This situation was very instructive to Dave and me. We learned that some investors, indeed some people, have little understanding of human motivation, particularly for that of entrepreneurs. Thinking that an actual whipping or the fear of whipping would somehow produce positive results is not just wrong – it is incredibly wrong. You may get some level of performance from people when they are afraid (and fear of losing one’s job is a powerful emotion), but fear will not produce sustained, positive results. The suggestion that it would do so displays an incredible lack of understanding about the difference between intrinsic and extrinsic motivations and what makes entrepreneurs tick.
As company founders, Dave and I dug deep for the company every day – in effort, in creativity and sometimes in our own pockets. In financial trouble for a prolonged period, we put ourselves at the bottom of the priority list for payment of compensation and expenses when the company was tight on cash. To have a potential financial investor tell us that we would continue to indefinitely be at the bottom of the list with no relief in sight for some of the basics was incredibly demotivating. According to this investor, people who were shareholders alone were going to be treated better than we were by getting full liquidity and we were shareholders and management.
Doing the right thing
The situation also reinforced our deep belief in doing the right thing and never doing something just for money. As I reflected on our conversation and how the investor said that we would ultimately get our financial reward, I thought about Pavlov’s dog. That dog learned to salivate at the mere appearance of Pavlov, whether he brought food or not. Many people have the mistaken belief that all people are motivated so directly by money – hold out enough reward for people and you get a predictable reaction for the money. Some may be motivated in that way (coin-operated is the common expression), but we were not.
Over the years, something became clearly embedded in our minds through the market rejection that we experienced – we would continue to do the right thing for as long as it took for our product to be accepted and the company to be successful. Our financial hardship helped us see clearly what we wanted and allowed us to make an easy choice about what we would and would not do for money.
Going into the conversation with the investor, I am not sure that I would have accurately predicted that I would have responded the way that I did (and that Dave would have been completely aligned). You can play out the scenario and imagine responses, but it is sometimes only in the intensity of the moment that a course or reaction becomes clear.
Want to be an entrepreneur? Then know yourself (and partner, if you have one), starting with your motivations, beliefs and values. Test your thoughts regularly and don’t be afraid to be driven by firmly held convictions. You can be true to yourself, and you don’t need to take a whipping over money.