Randy Komisar, author of The Monk and the Riddle, talks about why it's important to have a business mission beyond just making money.
Courtesy Stanford University
Do you have a purpose in your business that goes beyond making money? Consider these companies:
Harley-Davidson's mission is to 'fulfill dreams through the experience of motorcycling.'
Southwest Airlines is trying to 'democratize air travel so that all Americans can visit a loved one or relative at a happy and sad time in their lives.'
Nike is attempting to 'bring inspiration and innovation to every athlete in the world.'
I first learned why a company needs a core purpose from Randy Komisar, who wrote the book The Monk and the Riddle, which was published just as the dot-com market went bust in 2001.
As people sobered up, Komisar became the conscience of a generation of start-ups that he encouraged to build businesses with a significant purpose beyond just making money.
As we approach the 10th anniversary of the release of The Monk and the Riddle, I spoke with Komisar, now a partner at Silicon Valley–based venture capital firm Kleiner Perkins Caufield & Byers, about how things have changed since he first released the book and if he sees any parallels between today's business environment and that of the period after the technology crash.
Warrillow: How has the world of entrepreneurship evolved in the past 10 years?
Komisar: I think today you have two kinds of entrepreneurs: mercenary and missionary company builders.
Mercenary entrepreneurs—today disproportionately running consumer-web businesses—are young, aggressive and ambitious people, which are all good qualities, but they have no broad picture or purpose. They are getting lots of 'eyeballs' and 'users' but aren't delivering any significant value.
Missionary entrepreneurs—more often found running life sciences, green technology, infrastructure or deep sciences businesses—have a bigger goal beyond just making money. For missionaries, it is not about buying low and selling high or getting out quickly; it's about building something sustainable so that you can have the kind of impact you want and accomplish your greater purpose.
Warrillow: How do you sniff out the mercenary entrepreneurs who come to Kleiner Perkins Caufield & Byers for a venture capital investment?
Komisar: When you probe a mercenary entrepreneur on their purpose, you get nothing substantive or a bit of jargon. You don't hear a motivating purpose. It's not that these people are trying to hide something or pull one over on me; they simply haven't taken a deeper look at what they are trying to accomplish.
These days, the game a lot of mercenary entrepreneurs are playing is to get a product out, get a lot of people using it, get a lot of hype online, turn that into a lot of hype in The New York Times and The Wall Street Journal, raise a lot of money and sell out.
It's leading to the 'game-ification' of the business world, where everything has become a gambit with a focus on superficial metrics as opposed to building a business that will make the world a better place.
Warrillow: When you meet mercenaries, do you try to coach them?
Komisar: Sometimes. But a lot of the time, they are not receptive to coaching on the bigger picture. For many it's a control thing. They say, 'I'm the founder, I'm 23, I want to be the CEO, I've been told that's important, (Facebook founder) Zuckerberg is still the CEO.'
The time I can reach somebody is when they have stumbled. That's when they are more open to the realization that there is more they could do or know.
The purpose can become so core to your business that it can survive well after you have left the company. William S. Harley and Arthur Davidson started their motorcycle company 100 years ago, and it has thrived through multiple ownership groups—in part, because of their big compelling vision that acts like a magnet for each new ownership group who wants to be part of the Harley-Davidson story.