“People do not buy goods and services. They buy relations, stories, and magic” - Seth Godin
French economist Jean-Baptiste Say is supposed to have coined the word ‘Entrepreneurs’, in early 1800s, to describe a particular group of people who played an important role in an economy of a nation.
According to Say, this was the faction of the society who intentionally searched for situations where the resources and capital were not used efficiently and introduced innovative ideas to move them into more productive areas in order to get a higher yield.
He wouldn’t have even imagined that the word he constructed would become a staple in the menus of degree programs, economic plans, and policy statements of Governments of countries around the world in just two centuries.
Different types of entrepreneurs
The word ‘Entrepreneur’ is described, in most of the English dictionaries, as ‘a person who sets up a business (or businesses), taking on financial risks with hope of profit’. Therefore, ‘Entrepreneurship’ is described as the ‘activity of setting up a business taking on financial risks with hope of profit.’
Even in this most commonly used context of the word, there can be three main different types of entrepreneurs: the creator, the builder, and the operator. The creator has a brilliant creative mind with a great enthusiasm about a specific product but may have difficulties in focusing on one project for a longer period of time.
The builder has the ability to build the business around a credible idea or a product and motivate employees to push the growth of the business.
The operator is normally detail-oriented and is capable of getting the company organised by putting the proper procedures in place with long-term goals in mind. That is why different members of a group of entrepreneurs sometimes end up leading these different stages of the same project.
There are a lot of higher education institutions around the world offering courses and some even complete degree programs in entrepreneurship.
Almost all those courses are packed with topics such as consumer behavior, business accounting, business law, marketing and finance. Some even offer courses named ‘Business Ethics’ indicating that it is something different from the ethics of the non-business people.
Most of these programs bring successful entrepreneurs as guest speakers for their courses and workshops so that the students can ask questions and learn directly from the people who have achieved their goals.
Whichever the aspect one looks at, the entrepreneurship, as we have come to know it today, almost always deals with formation of business enterprises and introducing new business ideas.
The real deal making
However, what the lecturers of these courses and the successful entrepreneurs who visit as guest speakers or mentors do not tell the students are the intricate details of competing and deal making in the business world which exists in the world of politics.
Some of these very same people who teach entrepreneurship will agree with their bosses or just keep quiet at meetings even when they know very well that the decisions taken were not of the best interest of the institution because they are afraid that if they did not agree they stand a chance of losing their promotion or the job.
Besides, entrepreneurship doesn’t have to be limited only to the business world. Starting from the kindergartener who throws tantrums until he gets what he wants all the way to the employee who knows how to get the promotion, the salary increases or any other benefit by conforming to his or her boss’ personal agendum can all be considered as entrepreneurs.
Some children don’t even realise that they made it to the soccer team or became the head prefect of the school due to the entrepreneurial skills of their parents in satisfying the thirst of the Coach or the Principal, sometimes literally.
An entrepreneur has to convince a lot of sceptics, starting from prospective investors, law makers, and authorities in relevant approval bodies about the high probabilities of success.
Then they have to convince the consumer that their product is superior to those of the competitors. Steve Jobs was known as the ultimate pitchman who could convince anyone of practically anything.
He had a charismatic rhetorical style, a strong will, and an ability to bend any fact to fit the purpose at hand. No matter how innocent they are, this kind of reality distortions, can take one from the state of exaggeration to fraud very easily. Of course, entrepreneurs usually do not face criminal fraud charges since most what they say and do are accepted as the norms of the game. Just the same way politicians are not prosecuted for not honoring the promises they make on the campaign trail. But the winning politician is accepted as the successful one. That is why the British poet Sir Henry Taylor said, “falsehood ceases to be Falsehood when it is understood on all sides that the truth is not expected to be spoken.”
How to win the competition
The game is played at all levels of corporate life from the highest to the lowest. Entrepreneurs have a lot to lose if they fail, especially the ones who use their own money or the money borrowed from the family and friends to start the business, and therefore they can easily justify the need of not revealing the whole truth to the other party.
Another reason entrepreneurs are prone to deception is that it is relatively easy for them to get away with it since they have all the information regarding their product that others do not have. Economists refer to this as ‘information asymmetry.’
Beating the competitor is also an important part of this game. One of the main components in that process is; ‘industry espionage’ or in plain English; ‘stealing the information from the competitor.’ This is usually done by paying an employee of the rival company enough to compensate the risk he or she is taking. Another aspect of winning the competition is to keep the cost of production lower than that of the competitors. It is another part of the game where entrepreneurs have to leave their personal beliefs and ethical standards a side and play within the ethical norms of the game.
Those who resort to such practices usually justify their actions using statements such as: “it is for the greater good” or “what is the harm if it helps my employees to feed their families” or “as long as we stay within the law of the land our business is as clean as it needs to be”.
This does not in any way mean that the entrepreneurs in the business world are less ethical than others. Surely, there may be entrepreneurs who became successful by playing the game according to the highest ethical standards of any religion currently existing in the world and hats off to them.
It probably will help the students in entrepreneurship classes to know that we live in a world of “end justifies the means” where an accused criminal is not expected to tell the truth when he or she pleads “not guilty” and everyone including the Judge and the Jury accepts the fact that the duty of the defense attorney is to get his or her client freed and not to reveal the truth.
The writer has served in the higher education sector as an academic over twenty years in the USA and fourteen years in Sri Lanka and he can be contacted at [email protected]