In entrepreneurship, it’s not all about the money

At one of the many meetings, Meetups, forums, conferences and briefings that I attended last month, I met an entrepreneur and we ended up talking about the new current rage in fantasy football betting. When the conversation reached a point where the legality of this activity was raised, the entrepreneur expressed interest in jumping into this new market. When I asked about the risk if the activity was determined to be illegal, it was shrugged off with the comment, “If I can get in and out of the market with millions of dollars, who cares?”

All too often throughout my career and life as an entrepreneur, I have met individuals whose only goal was to make lots of money – and, if the goal of making money might cause one to “color outside the lines” of current laws and regulations, then the goal of making money trumped all other goals, laws and regulations. These individuals placed their own goals ahead of those they worked with, the community they lived in and the social norms reflected in the laws and regulations passed by our different levels of government.

It has been my experience that people who focus only on the money have a “grass is always greener” challenge. When a business opportunity first presents itself, it shines in the glory of all the potential that it represents. As work commences to convert the opportunity into a business and produce real products and services, the luster of the opportunity is diminished or lost altogether. The going gets tough and someone has to do the heavy lifting to achieve success.   The individuals focused on just the money have a tendency to jump to another opportunity – one that now shines outside the microscope of reality – and leave everyone else in the deal to do all the work. Not the kind of person that I want to invest in or work with.

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Setting aside the moral and ethical issues of placing this level of importance on money, the question is raised whether someone who is all about the money can be trusted. If you enter into a business relationship, sign a contract or work with or for a person whose rules of life are focused just on money – can you trust them? Trust and credibility have proven to me to be of more importance than the monetary outcome of a particular deal. Deals sometimes fail to deliver the desired outcome. When this happens, the question is often raised as to why the failure occurred and whether one of the parties to the deal contributed to the failure. Any doubt may lead to a person being “blacklisted” and put in a category of people to avoid in the future.  Everyone has such a list.

I admit that early in my career I chased money. And, I admit that today I remain a stickler on the “economic sustainability” of a startup. One of my favorite sayings is, “No margin, no mission,” reflecting the fact that money is important in order to remain in business. 

However, money is a consequence of providing value in the production and delivery of a product or service. No value – no money. In order to achieve a profit, it is necessary to charge a price that reflects a value in excess of your costs. 

Money is needed to engage in business or any activity. My work often involves raising money for one of my own projects or helping others to raise money. The raising of money always includes the issue of rate of return on the use of funds. Will the source of money get their money back and will they get any extra money for the use of their money? The raising of money is often limited to this single dimension. There may be little or no consideration of the purpose or outcome of the opportunity. One investment is no different than another except to the extent that one pays a higher yield. The stock market reports the prices and price/earnings ratio – not the other successes that a business may achieve by successfully bringing a product or service to the market. As an entrepreneur who works hard to solve a problem with a product or service, this reduction of the enterprise to a single value can be disheartening.

As I get older, I favor working with people who share my values. I continue to learn about and work toward the improvement of the communities in which I live. I find people who want to  solve the same problems that I want to solve are those with whom I prefer to work. We may disagree on the best approach – business, social enterprise or charitable – but we have the same goal in mind. And that’s not all about the money.

Contact Karl Dakin of Dakin Capital Services LLC at 720-296-0372 or kdakin@dakincapital.com.