Thursday, May 2, 2013

Are you a socialist?

As noted in an earlier post I hosted a dinner to try and see if a group of entrepreneurs could come up with a straw man strategy to encourage entrepreneurs and entrepreneurship.

As a moderator/facilitator, I first framed the issues and the need to "connect the dots". During the course of the discussion (which I could have moderated better), I was guilty of making comments about what I believed in, i.e. the need to enable what I call the broad middle. In doing so I said such things as: "does anyone know what happened to people who came 5th to 10th in business plan or venture competitions?"; "nobody really cares about the middle, everyone is looking for the next big winner"; "we need to start a movement" and so on.

At the end of the evening, minutes before he left, one of the people asked me: "are you a socialist?". Taken aback (due apologies to socialists - so much of a bad rap in so many things has to do with poor execution, inability to evolve, the-other-way-is-wrong thinking etc.), I replied: "I am a capitalist. But it is strange you ask that because when I was a young MBA student, a friend asked me what I would do with a 100 million USD, and on hearing my reply said" "oh, so you are a socialist!"" (Note: History has shown that I had neither the luck nor the skill to be worth a 100 million USD!!). There was no time to discuss the point further as the person left.

After he left, I asked another invitee, for whom I have great respect, and who is familiar with my objectives and way of thinking, if he had heard the question and if he thought I was a socialist. This friend told me that there was nothing that even smelt of socialism about me and that there is often quite a bit wrong with labels anyway.

I reckon I am about socialist as Bill Gates or any other philanthropist who has made his/her money (except that in my case the funds are very limited and I deny myself many luxuries to do what I am doing). That you reach a point in your life when you have the luxury of stepping off of the job treadmill and doing something for society (whether society asks for it or not!!) does not necessarily make one a socialist.

I am not egoistic enough to believe that readers have any interest in knowing whether I am a socialist or not, or what my reasons may or may not be.

The point I did want to make is that what the question (possibly) implied was wrong. I got the impression that one implication of the question was that you cannot be a capitalist if you are trying to get an advantage for the "average" entrepreneur (i.e. the "best should win" theory). Another possible implication was that you cannot be capitalist if you do some good for the possible benefit of others without any benefit to yourself.

For one, I have long held with deep distrust anyone who is so sure that they can pick a (business/investment) winner. However expensive their suits and whatever their pedigree. On the other hand, I do believe that there are some who are far better able than others to make a winner given the same playing field.

One reason I want to help the "broad middle" (the "average" entrepreneur) is primarily because I feel that many of them are there (at least in this country) in the middle because of the environment. If that environment was more supportive, they would then be competing on a more level field and then the best business should win.

A second reason is that I do believe that not every entrepreneur has to become a  big player. Its OK to be "average" - so long as they are socially responsible and run their businesses efficiently and well, the economy cannot be worse off. They just do not need the hassles that currently come with the territory, and neither does the economy!

A third reason is that there are many Venture Capitalists (VC) and Angel Investors (AI) chasing the next firm that is going to be a runaway winner. Should the "broad middle" be more successful, they would only widen the investment pipeline for the VC's and AI's (and possibly even make feasible a small business exchange that would give VC's etc better exits and so on - see the dots do connect!)

Stay well, stay true.
Vishnu.