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July 15, 2004
BBBT: Ethics and Bootstrapping
Question: What are some of the ethical challenges that can be created when building a business through bootstrapping and how best can an entrepreneur avoid them?
Answer: Do the right thing, always. I find it very difficult to discuss ethics in a generalized way. Starting a business can push individuals to stretch the truth for competitive advantage. This can come in any number of ways. Owners might claim to be bigger and more established to lure investors or clients. They could attract employees or customers with exaggerated tales of prospects. They might claim to have certain key elements in place before they are locked down simply to calm key players. The opportunities for fudging will only multiply as a company gains traction. Founder/owners can justify their extreme behavior by saying its all for the company—that it’s business, not personal. But of course it really is all personal, to someone.
So I think the real issue is quite simple. Do the right thing always. Be honest to people. Practice the golden rule. And always do what you say you will do. I truly believe that a culture of openness and honesty foments more of the same, while one that sanctions untruths will inevitably create more lies.
Posted July 15, 2004 05:09 PM
Comments
I absolutely agree with you on this. I feel that even though you may feel the pressure to lure an investor/client to your business, getting caught in a lie will only lead to more problems and probably ruin your business reputation. My uncle told me that before he started his business and he was evaluting different opportunities, he caught a potential partner in a lie. This opportunity looked very attractive, but once he found out that he had been lied to he would not even consider going to into business with this individual. This business has gone to do quite well, but my uncle said he has no regrets because if this person lied once, he'll lie again.
Posted by: Bill Baker at July 15, 2004 05:33 PM
It never ceases to amaze me what people will be dishonest about. I was shopping for a mattress one day when the salesman and I got into a conversation about where I worked. He told me that he had dated the owner's daughter a year ago but did not seem to know her name. The funny thing is that I was the Maid of Honor in her wedding about the same time he was referring to dating her and we have been frineds for sixteen years. I know she never dated him. He lost a good sale that day due to that lie. I was prepared to purchase the mattress set before told me a lie for no reason.
Once someone has lied to me once I can't believe anything they say in the future. In order to protect myself I can't allow myself to trust them.
Posted by: Jennifer Baird at July 16, 2004 12:50 PM
Telling the truth gives you a singular advantage, you have so little attention on what you told to whom that you can concentrate on getting your work done and expanding your business.
When you have untruths to hide, life get very complicated in a hurry and it affects your ability to reach out and promote yourself. This is a killer in a small business.
Posted by: David St Lawrence at July 16, 2004 11:01 PM
at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
