The topic about making the choice between wealth and control is not a topic that any entrepreneur wants to have to think about. In Founder’s Dilemmas by Noam Wasserman, this is a choice that almost every entrepreneur has to make and it is never an easy one. Wasserman argues that entrepreneurs have to face the decision if they want to be “king” and maintain all of the control of the company, or if they want to be “rich” and have a lot of money while giving up control. When any entrepreneur is starting out, they have to make many decisions that will ultimately lead them to the end result of being “king” or being “rich”. As Wasserman states, these two desires will frequently exist in tension with one another which is called the “resource-dependence challenge.” Allow me to elaborate on how these two options are so different and such a struggle for founders.
When a founder wants to be “rich”, they must give up control of their business in order to make more money and achieve their ultimate goal of having an abundance of wealth. Founders who are after being “rich” will enlist the help of venture capitalists, employees, and seeking out information in order to grow their business. However, these resources will also want their share of the company, they will want to have their say in decisions , and want to protect themselves. These resources will all be looking for a piece of the pie and will want some aspect of control of the business. This is a dilemma that founders face when they are wanting to grow their business, if they want to make more money then they must be willing to give up some of the control.
On the other side of the coin, when a founder wants to be “king”, they are willing to give up on having mass amounts of wealth because they want to be able to make all of the decisions for the business. The founder does not want someone else calling the shots on how the business is run or how items are marketed. The founder who wants to maintain control gives up the opportunity to see their business grow and thrive past what their own abilities allow because they must control every aspect. This is a dilemma that founders face when they are not willing to give up control and see just how successful they could become if they allowed someone else to call the shots as well.
Wasserman also talks about knowing what you want to accomplish with your business with each decision you make. You should know what motivates you and why you are starting a business in the first place. Personally, I am the “king” founder type and I knew that from the start of my business. While it would be nice to have mass amounts of wealth, I enjoy being involved in every step of the process and having final say over everything that has my logo on it. I want to be in control of what my business does in the future and how my company is seen and represented in the public eye. If I was to allow someone to take over some decision making of my business, they could change the whole branding strategy from what I built the company on.
I often think about the issues that the founder of Burt’s Bees faced when his business partner took over the company. The company used to be very small and it only produced a few different products, perhaps 5 or 6. The company felt like a no-frills company that stayed with a few products that they knew they could do well focused on quality and sustainability. When Roxanne Quimby took over and Burt walked away, the company changed from a few items to now having over 100 different products and sold the company to Clorox in 2007. The reason I bring this up is because this is why I would not want to give up control of my company. Burt Shavitz had a small little business that he was happy with and when it was all said and done, he was not making any money off of his products and his partner had bought him out.
I enjoyed reading about the differences between having wealth or control and I learned about myself. I hope that you learned something about being a founder of a business. Leave me a comment below letting me know if you are the “king” or the “rich” when you think about running your own business,
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Until next time,