There is a surge of wanna be entrepreneurs in India. You see college kids – and not just from the IITs/RECs – carrying cards saying “Co-founder”. One regularly comes across men and women in their mid-thirties (or lately even mid-forties) who are quitting their cushy jobs, getting out of their comfort zones, and jumping into the unknown and, if i may say, insecure world of entrepreneurship.
This is great! It reflects the changing aspirations of a new India; an India which is willing to take risks; a changing environment which is enabling such risk taking; and breaking the mindset of finding security of “a government job” or an “MNC”.
However, there is a problem as well. Most people are reinventing the wheel all over again. This is true for services companies, specifically. Mostly, in such companies it is a “work-for-myself” factor, more than any other value proposition that they have on their mind in taking the entrepreneurial plunge. I find this self-defeating.
Most such entrepreneurial ventures are created when the economy is on the upturn. It is opportunistic in that sense; ride the wave, work for yourself – is the motive.
However, there will be a downturn – for sure! Most of such mushrooming companies will collapse with that. The reasons are evident. They do not have the depth of “time” behind them. “Time” brings, employee loyalties, brand recognition (thus, word-of-mouth references), cash reserves, repeat business client base, maintenance projects, and existing investments in infrastructure. This is difficult to replicate for self-funded start-ups.
There is a different model which both employees and employers, in start-ups and small enterprises can work with.
This is the model of co-creation; of participation in a business as a co-owner.
In his book “Companies We Keep“, John Abrams of recalls the incident which took him on the journey of employee ownership at the company – South Mountain Company (SMC) – he promoted and ran successfully for several years. One of his key employees, Peter, came one day to him and said that he wanted to build his career at SMC, and wanted to belong there in a capacity more than that of an employee. This conversation led John Abrams to engage an ESOP consulting company, eventually leading to formation of SMC as an employees co-operative. Today SMC has $1.5 million in cash reserves; continuous stream of business; has 42 employees, half of whom are co-owners. John writes, “…no one at SMC is rich; but each one of us has enough”. There is long-term security that its people have working in the company; it has demonstrated longevity; employee and customer loyalty is high – basically SMC has everything that companies should be like.
Do note the distinction John makes between being “rich” and having “enough”. “Having enough” does not mean “having less” – it simply means that everyone is not out to become a billionaire at SMC. They all want to have a good life – enough money to live well, have long-term security, find self-expression at work, and come back home to enjoy family and relationships. Employee-participation at SMC has led to the creation of a great workplace and win-win situations.
The maturity demonstrated, and trust put forth by Peter, in John, was to me the high point of this book.
Becoming is a co-operative is not the only model. Legal structures in countries such as Spain and USA encourage co-operatives and enable them to run like corporations with serious retirement and tax benefits. However, legal structures in India for co-operatives and for ESOPs are archaic and in very nascent stages of evolution.
Yet, different partner structures can be created if the motivation at both the employee and employer side is strong; and there can be an opportunity of clear communication.
This would be my advise, based on my years of perseverance, mistakes, struggles and successes. Go and reach out to your company’s management/promoters; tell them that you’d like to work as an entrepreneur and a co-owner; work with them in addressing insecurities across the board; create win-win situations; be reasonable and negotiate; yet do not be greedy (i as an entrepreneur can vouch for the amount of sweat and blood that most entrepreneurs put in their companies to build them; and they do deserve the lion’s share of profits/shares). And if you do not find a headway, find another company which is willing.
If you find none – start your own enterprise – but remember to implement these values!