We fear so much losing what little we have that we dare not take a stance against something we know is wrong, or to fight for something we know to be noble. We fail to see that we should have much more than what we have because we have had nothing for so long. We have fallen into the trap of thinking true economic liberation can only come from self-employment. This is what we have been taught to believe. This is what, at least in our country, is the prevailing wisdom.
In fact, it is so deeply ingrained that you might find it hard to reconcile these words with common sense. I mean, of course you need to be an entrepreneur to make it in this world, at least financially. Everyone knows that! I believe this to be very far from the truth. Or if not far from true then significantly skewed towards what is merely one alternative.
The richest in South Africa are entrepreneurs (but are not self-employed)
The list of the richest people in South Africa – and how much they are worth – from Forbes is mind boggling. Incidentally, there is only one black billionaire in this country. That’s one. In the entire top ten there are only two black people. And there are no females.
Rupert is the chairman of Richemont and Remgro; Gore is CEO of Discovery; Bekker is Naspers CEO; Ackerman was chairman of Pick ‘n Pay; Dippenar is chairman (and co-founder) of First Rand Group; Oppenheimer was chairman of De Beers before he sold it for $5.1 billion in cash; GT is also co-founder of First Rand; Saad is co-founder and CEO of Aspen; Wiese is executive director for Shoprite which he bought for R1M; Gray is the founder of Allan Gray; Noutton is chairman of PSG (his son is CEO); Sacco inherited Assore Group from his father; Attridge is co-founder and deputy CEO of Aspen; Ramaphosa chairman and founder of Shanduka Group; and Motsepe owner of ARM.
Although they are all CEO’s or Chairmen of their respective companies they are also co-founders of these companies or they got very lucky with some risky investments. I’m not an economist so I will not try to analyse their situations and what allowed them to make it when so many others did not. Maybe you can read Jim Collins’ Built To Last and Good To Great for that. The point is that it is clear that some form of entrepreneurship was vital in making these men as wealthy and successful as they are. So at this point I want to clarify: there is a difference between entrepreneurship and being self-employed.
The difference between an entrepreneur and being self-employed
There was some research done to try to understand why self-employed people in the US on average earn less than their salaried counterparts. What the researchers found was that they had to separate entrepreneurs from other types of the self-employed by “disaggregate(ing) the self-employed into two groups—the incorporated and unincorporated.” They described the incorporated as having “limited liability” and “a separate legal identity”. This simply means you have your own business but you are owned by a bigger corporation or they have a significant stake in your company. The research they found was that these individuals earn 28% more than their salaried counterparts. They found that unincorporated self-employed individuals earned less than their salaried counterparts. Interesting.
They also found that successful incorporated entrepreneurs were successful salaried employees before they ventured out on their own and that those who remained unincorporated were never successful as salaried employees. Very interesting.
Entrepreneurs in the corporate world
We’ve heard about the incorporated self-employed, what about entrepreneurs in the corporate world? Can they exist? The answer, if you buy into the above argument of incorporated self-employed, is that of course they can and they do. In fact, I would argue that what encourages them to leave and start their own businesses is a recognition that the corporate world is holding them back from achieving their goals of changing the world. The same researchers found that there are have been organisations for a while now, long before Google and Apple that actively encouraged the spirit of entrepreneurship within their employees because they understood the role these people played in the success of the organisation. And think about these guys mentioned above. They are the leaders of their organisations. Is it not feasible and even probable that they will be looking for people like them to continue their businesses? I see a trend in corporate towards building a culture of entrepreneurship. The more forward thinking organisations have this already inculcated in their people and it is a key factor for new hires.
But for some reason we view people who stay in the corporate world as not being brave enough to tackle the outside world on their own. We use terms like the rat race (I saw a poster saying that even if you win the rat race you’re still a rat!). We make being self-employed sound sexy and earning a salary sound boring. You even see it with your friends and acquaintances. They walk around like heroes with the slightest bit of self-importance around them. It’s like people who have this insatiable need to tell everyone how difficult their MBA is while they’re doing it and how hard it is to have to attend lectures after-hours. MBAeish!
The sad thing is I used to feel inferior somehow (I could never really understand the exactly how I was inferior) for not following my friends’ and former colleagues examples of starting my own business. I think about it now and there really is no reason that I can see right now to leave the corporate world and start my own business. If a company is no longer fulfilling my passions then I need to find one that will. I need to rise high enough in the organisation to be able to influence decisions on things like culture change, contribution to economic development, the building of leaders in-house and whatever else you may be passionate about. And if you are truly entrepreneurial you will know when corporate is no longer sufficient to fulfil your passions and then you will build your own little corporate or big corporate to satisfy those passions. Not because you want to make money!
There is nothing less inspiring than money. I had a debate with my little cousin some time back. He was adamant that his goal in life is to make money. I asked why he wants to make money. He was unable to answer not because he didn’t have an answer but because he felt it was self-explanatory. It is not. If you one of those people whose goal is to ‘make a lot money’ ask yourself why? Why do you want to make money? Is it so you can be comfortable? If so would you accept other sources of this comfort other than money? Is it to provide for your kids? I would argue that staying in corporate is the best way to do this. You can’t get any more stability than that. Ask yourself why you want to make money and then stop focussing on the money and start focussing on the reason!
This is where the economical difference between an entrepreneur and someone who is self-employed. The entrepreneur is not focussed on being self-employed for the sake of being self-employed or for the sake of making money. They engage in entrepreneurship because they thrive on invention and innovation, on creating and finding needs to fulfil. A Forbes reader commenting on an article about entrepreneurship wrote that an entrepreneur has “an insatiable need to make the world a better place through… improved services or products.” Richard Branson said “There is no point in going into a business unless you can make a radical difference in other people’s lives.”
So the next time you feel under pressure to ‘start your own business’ think about whether you will be changing the world or not. Think about what difference you will make in this country with your invention. Think about the impact you have in your current job and whether or not you can do more. Ask yourself if you have not been successful in the corporate world where you are given all the resources at your disposal what makes you think you will be successful on your own with significantly less resources. Think about your driving passion and if it is compelling enough for you to say fuck it I’m doing it.