THE MOUSETRAP (and the first key motivator for entrepreneurs).

The mousetrap

I once walked into a successful entrepreneur’s office to pitch for investment and noticed a mouse trap on her desk.?In an attempt to make small talk, I asked her whether she had a problem with mice, in the same way that I did. It was the early days of building my company Buzzmove, and so our ‘office’ at the time was a small, cramped basement room with no windows, which we shared with (at least) one mouse, which we affectionately named ‘Buzz’ (because it somehow made the rodent sitch seem less revolting).

The investor smiled at me and explained that the mousetrap served as a daily reminder.?‘A reminder of what?’ I naturally asked. The investor responded: “Well, do you want STP or LTJ?”?Confused, I asked her what that stood for.?She explained that “STP” stands for short-term pleasure,” and “LTJ” stands for “long-term joy.”?With a mousetrap, the mouse faces a dilemma:?To pursue the “free” cheese (but it’s ultimately a trap) or forgo the cheese altogether. The easy route may seem attractive in the moment, but it will only get you so far.

I never forgot this analogy and it’s a constant reminder that most worthwhile entrepreneurial desires in life are not easy to obtain. And while most life and business choices are not so black and white, I still always ask myself, “If I do this, what is the cost, and am I willing to pay it?”. This is normally followed by the question, “Can I accept the worst-case scenario?”. When it comes to innovation and entrepreneurial endeavours, the ‘cost’ is usually hard work and lots of risk. The worst-case scenario is generally the complete failure and loss of all time / financial investment.?

Hard work, pressure and risk comes with the territory of being an entrepreneur / intrapreneur. An important consideration in taking this path therefore is always: What is the trade off? What is the potential reward? Is it worth it? I believe the price of success is generally hard. There are no “easy” routes available when running a business (whether in the wild, within an established corporate or as spin-out business with the support of a corporate). I have found this to be constant and true, both when building startups in the wild and from within a corporate.

At this point you might be asking, why would anyone be motivate to be entrepreneurial. The answers lie in mankind’s inherent desire to pursue freedom (often facilitated by financial gain) and purpose / meaning. What specifically makes this journey worthwhile will vary from person to person. I have my own position in this respect, which – having had candid conversations with hundreds of other entrepreneurs, does not differ to wildly from the mean. With that in mind, I will, as promised, set out the top 3 motivational drivers for entrepreneurs (whether in the wild or from within a corporate).

You may be a manager or leading in an established company, and therefore think this article isn’t so relevant to you. But before you stop reading, let me explain to you why you should care.

Building new innovative products and ventures or opening into completely new markets comes with the inherent opportunity to significantly contribute to the bottom line, as well as retain and materially grow market share and compete with newcomers into the market. Contrast this with simply improving on existing products and business lines, which can only provide marginal increases in growth (and will likely hit a point of diminishing returns). As my colleague Andrew Jones recently wrote in a brilliant post: You can’t continuously improve a candle into a lightbulb!

This last point is beautifully illustrated by Nagji and Tuff’s innovation ambition framework. I won’t go into too much detail about it here, but in a nutshell: Nagji and Tuff looked at companies that outperformed the S&P 500 and found that these leaders shared a pattern of innovation investment: 70% in enhancements to core offerings, 20% in adjacent moves and 10% in transformational initiatives. However – when they looked at the financial returns from the entire portfolio of innovation investments, they discovered that the inverse applied…with 70% of the return on investment coming from transformational realm -- i.e. from the most innovative and disruptive projects.

My point? It is well worth investing in employees that have an entrepreneurial flair because companies stand to benefit significantly in the long-run from all contribution to transformational projects.

Ok, so I’m finally ready to share the top 3 motivators that I have discerned from countless conversations with fellow entrepreneurs:

1.????The chance of significant financial gain in the future (= FREEDOM);

2.????The desire for greater control in life (= FREEDOM);

3.????A strong vision and sense of purpose ( = MEANING).

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Rather than provide you with a long essay today, I will explain number 1. above first, and the other two in subsequent posts.

Number 1:?The chance of a significant financial gain in the future.

Like it or not, the opportunity for significant financial gain down the line, is the primary reason why entrepreneurs are prepared to accept risk and invest their sweat blood and tears into a new venture / product (rather than choose the ‘easy cheese’).?This is just the reality. That doesn’t mean that entrepreneurs are greedy or superficial. The motivation never is money for money’s sake. Rather, the deeper drive is one for financial (and overall) freedom and for a richer life for them and their loved ones.

Yes, not everyone is motivated by money (or at least not solely). But everyone is motivated by the idea of freedom and the fulfilling of their dreams: Whether that means travelling the world, buying their dream house or whatever else. It’s about designing and building their ideal lives. Don’t we all want that? Money is often considered to be a ‘dirty word’ and can be associated with greed or vanity. Many of us grew up hearing that ‘money is at the root of all evil’. But this fails to account for the fact that money is merely a means to an end – a route to a better life (for you and for your family), to greater freedom. ?All human beings inherently strive for greater freedom.

I can already feel CEO’s, Heads of Innovation and managers rolling their eyes at this, and I do have empathy for that, particularly because we are rarely gifted with an unlimited budget to compensate our employees!?But please don’t stop reading because there’s always a way forward that works for everyone.

?Remember my earlier point that new and transformational ventures / projects, when successful, have the massive potential to drive huge financial gain for the company (along with may other benefits including the strengthening of the company’s position in the market). And so the opportunity to financially participate in this success could and would unleash most people’s entrepreneurial side. Therefore, one way that an organisation can motivate individuals to be entrepreneurial and go the extra mile, is by allowing them to share in the profit / growth /equity / general success of the new venture that the entrepreneur is building or helping to build.

This represents a clear win-win situation where risk and reward is fairly shared. If the new venture is unsuccessful, then the company loses some upfront investment, but equally the intrapreneur does not get to participate in any upside. If it is successful however, the company has just gained an extremely valuable asset and the intrapreneur achieves a meaningful financial gain which could positively change their life for the better.

This can be achieved via an ESOP scheme, the provision of (meaningful) equity or the sharing of profits (but not in an unnecessarily uncapped way!). I know that it’s not necessarily easy (or even possible) for established organisations to incentivise their employees in this way. However, to drive truly rainmaking entrepreneurial behaviour, the yin-yang balance of risk and reward must be addressed and solved in a way that works for both parties.

This also includes addressing the other major motivational drivers, which I will address in future posts :)

#innovation #entrepreneurship #intrapreneurs