If You have Employees, Your Company Doesn't Belong to You
One of the most heated arguments I ever had with my significant other was about Elon Musk. (We don't fight a lot.) It was right after Musk made his series of tweets about Tesla's stock price, the ones that eventually got Tesla fined by the SEC. I was incensed, because I saw his actions as those of a self-aggrandizing narcissist with no regard for the consequences of his actions. My boyfriend defended him as a brilliant visionary who just says and does what he wants and has been incredibly successful at coming up with groundbreaking ideas and pushing our narrative about technology.
After we'd both calmed down, I realized we were both right. (Isn't that the most satisfying end to any argument with someone you care about?) Musk is a brilliant visionary, AND he often doesn't think through the consequences of his actions, because he thinks the consequences only apply to him. In this case, he had to pay a $20 million fine, but so did Tesla—a publicly-held company with 45,000 employees at the time. His decision to fire off those tweets cost shareholders and no doubt affected budgeting decisions that impacted tens of thousands of Tesla employees. (Are we really supposed to believe that the layoff of 7% of Tesla's workforce in January 2019 wasn't predicated at all by that $20 million fine?)
And this gets at the heart of my argument with my boyfriend, and my long-distance frustration with Elon Musk—once you have employees, your company doesn't just belong to you. You have to see every decision you make through the filter of stewardship. Your number one responsibility, if you sit in the founder/CEO seat, is to ensure that you are making smart decisions that provide stability for the people who have entrusted you, their leader, with their livelihood. This is doubly important for public companies, who are making decisions with other people's money. Shareholders have invested in your company, and if you are playing it fast and loose with your company's financial decisions, public image, or legal standing, you are violating that trust. It's one thing to poke the SEC when you are a footloose and fancy-free inventor with big ideas and no one to answer to but yourself. It's quite another when the only way you can make your dreams a reality is to employ thousands, and when your dreams require serious investment from outside sources. That changes the game.
In the ten years I've owned a business with employees (my previous ventures were all solopreneurships or partnerships without W-2 employees), that responsibility has loomed large. I have never treated the company's money as my personal checkbook, as many small-business owners do—using the company's profits to pay for vacations, country-club memberships, second homes, luxury cars, putting family members on payroll who don't work for the company, etc.—and I've carefully considered the impact of my decisions on my employees. I'm often stunned at the carefree way some business owners I know approach the co-mingling of their personal and professional expenses, not batting an eye at having their business pay for Botox treatments or $1000-a-month tea habits (true story, and that must be some incredible tea), but then complain about having to give pay raises or ask about how they can get around paying for health insurance. They treat their own needs and wants as paramount, but the needs and wants of the people doing the work that earns them money as a nuisance, something that gets in the way of them having free reign to spend even more.
It's something I talk about a lot with new entrepreneurs or students interested in starting their own businesses. I think it is important to counteract the toxic tech-culture maverick image of entrepreneurship that many people have developed, based on what they see on TV and in social media. Owning a business is not about having a big ideas and then suddenly making enough money to have a fancy car and maybe someday, a private jet. It's not about suddenly being able to "write off" vacations because you took a book about business to the beach with you, or you had one lunch with a customer during your week in Hawaii. Owning a business is about creating an organization that is stable and sustainable, and seeing how your idea sparked the growth of a company that is providing a livelihood for others—real people who are working hard every day to make your vision a reality. Owning a business means accepting responsibility for that organization, and treating it carefully, so those people who either entrusted you with their careers (employees) or their money (investors, if you have them) aren't left hanging because you wanted to mouth off to a government agency, or buy a home in the Bahamas with company money, "for entertaining clients," of course.
This idea of business ownership—one of stewardship and responsibility—is not as sexy as the vision of a jet-setting visionary telling the world to go pound sand as they climb the ladder to their Gulfstream on the way to Monaco, but it's a hell of a lot more realistic. Small businesses (as defined by the SBA) make up 99.9% of businesses in the United States, and employ 47.5% of the workforce. That means, if you start a business in the US, you are nearly guaranteed to fall into this category. You will not be making a billion-dollar exit or buying a $400 million yacht. You will be working closely with your employees every day, and your investors will be the local bank, not faceless millions on Wall Street. Your actions will directly impact your community. On the plus side, it means the SEC won't be monitoring your Twitter feed, but on the downside, it means that if you screw up, you'll have to see the people your bad decision affected at the grocery store. You don't get to be a maverick, but you get to build something meaningful. I think that trade-off is worth it, but you need to, as well, before you start your own business.
The world needs visionaries—people like Elon Musk who are bold and brave enough to push the boundaries of what's possible—but businesses need stable leadership and a steady hand on the wheel. It's why Apple worked so well with Steve Jobs and Tim Cook. They balanced each other, and led the company to great heights. In your own business, you need to find that balance as well.