Success is not limited to those who start their own business

I used to be fixated by the idea that to be truly successful I needed to start my own business and be my own boss. Although I no longer hold this belief, it has taken me a long time to escape its grip.  When I reflected on this for today’s blog it struck me that the issue was my inability to differentiate success from arbitrary goals or other people’s goals.  Even if you haven’t been trapped by the same thought, this post may resonate with you if you are hanging onto ideals rather than focusing on what success means for you.

To clear up any initial misunderstandings, I am always impressed with those that do start their own businesses, risk their own resources, create work and opportunities for others in their community and strive to put something into the world that didn’t exist before they imagined it.  It’s impressive whether they succeed or fail. 

This week’s blog is on the need to define success for yourself.  Ideally it should leverage your strengths and passions.  This will also be shaped by your appetite for risk and how likely you are to be rewarded for taking that risk.  I no longer feel the need to emulate entrepreneurs.  For me the risk is too high, my strengths are better leveraged on my current path and my ideas for a new business are so uninspiring that the rewards wouldn’t be worth the effort.

I tried a mental-agility exercise last week.  What would the world be like if everyone owned their own business and worked for themselves?

I’m sure there are other potential outcomes, but in my daydream, humanity would need to take a huge technological step-back to a society based on barter transactions.  Without being able to employ additional human resources, as everyone else was self-employed, you would be limited to what you could produce/create by your own hand (or the size of your family).  The government would cease to exist due to no one making themselves available to provide labor for governance, policing, central banking, defense and bureaucracy etc.  Money would cease to exist together with taxation, shares and loans.  Land and raw materials would be whatever you could collect and personally defend.  Skills and knowledge would be passed down bloodlines, with opportunities to transfer to a new business by trial and error or if someone was willing teach you as part of their trade.  Even if we took today’s world as the starting point and everything (including technology) that has been designed is available for use, where would our energy supply come from?

Before I start humming John Lennon’s Imagine I’ll get to the point.  It is impossible for everyone to own their own business and be self-employed.  In a market economy capital and resources are limited.  Any new business needs to be sufficiently good at generating and meeting demand to be successful.      

If an entrepreneur has an idea, they will need to sacrifice time, effort and personal resources to launch and sustain their business.  To fund the new business, entrepreneurs will often need to raise additional capital on top of their own investment.  The higher the amount of capital required, the more control or autonomy is generally ceded.  Some of the perceived benefits of “not working for someone else” are eroded as you keep financing partners happy or, if you are dependent on one big client, what makes them happy.

Let’s take a quick look at employment versus self-employment and their own risk/reward profiles and a selection of pros and cons.

Most of the benefits of being employed typically involve clarity over your role and how much you are paid.  The rewards are largely known in advance and the risk of the organization failing is smaller than that of a new entrepreneurial enterprise and spread across more people.

There is another area of benefit.  Established organizations tend to be better capitalized and offer a platform for you to interact on bigger projects and larger deals.  In larger companies you will often find yourself part of a multi-functional team working with in-house and external specialists.  A colleague introduced me to the term “intrapreneur” when I was discussing this week’s post.  To me it perfectly sums up the opportunity that exists for those who want to create something new or better from within an organization rather than take the risk of doing so on their own. 

For the self-employed entrepreneur the rewards are potentially much higher, but far more uncertain with a lower probability.  The risks are not only higher, but they are also existential in nature.  A new business typically lacks the financing to be able to withstand a major failure without collapsing.  With the satisfaction of being a small business owner often comes the responsibility to fill resource gaps that would not normally trouble a CEO.  Everything you don’t want to manage directly can be outsourced, but those services are charged at a premium.  When all is said and done, even self-employed managers usually have stakeholders with a vested interest in the business.  There are successful entrepreneurs who can truly be said to work only for themselves, but many others have replaced corporate management for financing partners and shareholders. 

I also want to consider the separation of work life from home life.   It’s a personal choice, but I choose not to define myself primarily through my work.  I only ask people I meet in social situations what they do for a living when I have spent sufficient time trying to get to know them as individuals first.  Their career-choices usually have little bearing on how I feel about them as people.  I suspect that for entrepreneurs this is a much harder separation to make as their businesses can be extensions of themselves and like new-born babies require far more attention and care.  There are employees who make work their life, but this is usually by choice.

To wrap up this post, I believe that success is defined by your own values and chasing the rewards that balance with your appetite for risk.  For me, the romantic notions of starting my own business do not align with what I want from life and come with more risk than I want to take.  Your mileage will vary, but once you have clarity over what you want to do, success is simply a case of doing it well.

Next week’s post is on mentoring and defining a blueprint for what an effective mentoring program could look like.