There are three key questions that every entrepreneur should ask while assessing to see if an idea is a real business opportunity. Is there really a market? Is there enough margin to make the business feasible? Is this business really for me in terms of my passion and my experience? Answering these questions is a process that entrepreneurs should go through with every idea they are seriously considering for a new business. As I have written earlier, answering these questions is a step long before pen is put to paper to write a business plan or a dime of money is raised. My students sometimes refer to this as answering the “3 M’s”.
There is also a fourth “M” that should be assessed, That is the morality of the business idea. Now what is moral is a tricky issue. But if we are going to be serious about running an ethical business, shouldn’t it begin at the very first steps of the start-up? But what makes a business moral?
The morality of a new business relates to two issues. First, do we have a vision to build a good business? Do we intend to business that creates a good culture for its employees? Do we intend intend to treat our external stakeholders, such as customers, suppliers and investors, with integrity and honesty?
The second part of building a good business from the very beginning relates to product or service that we offer to the market. Does our business idea make a positive contribution to society? I am not saying, for example, that only entrepreneurs who make new medical devices that save millions of people’s lives is the only type of moral businesses. That is not the point. Rather, do we have a vision to offer a product or service that in some way will make peoples lives a little bit better, even if in some small and insignificant way.
In many ways the issue here comes down to intent. The same business concept can be moral when implemented by one entrepreneur and not moral when started by another. Let me offer an example, but please know that I am not suggesting that I know the intent of either of these entrepreneurs nor pretend to know what is in their hearts and minds, for that is where this ultimately rests.
These examples come from a recent story in US News on genetic screening for the potential to come down with severe genetically related diseases. On the surface this sounds like a pretty good thing to offer to the market. Some of the companies offer this service in a way that clearly is intended to first and foremost help their customers. They only offer tests that are scientifically validated and do so with one-on-one genetic counseling as part of the service. Some other companies in this story offer tests that are of questionable validity and reliability and provide the results with vague and, according to the US News story, potentially misleading written explanation of the results. Again I do not pretend to judge what either entrepreneur intended here, but in looking at their actions and how they implemented the same basic concept, one can infer some possible differences in their visions for this same business concept.
A few years ago I was team-teaching this concept with my co-author Mike Naughton from the U of St. Thomas. One of our students asked us if his family business was a good business, a moral business. After all, their business simply planted bushes and tress along state and county highways. What did that really contribute to society, he asked? But Mike assured him that indeed this business could be good, as long as their vision included good intentions for their customers, their market and their community. The student said that they took pride in making people’s long and often tedious commutes a bit more pleasant and enjoyable.
“Then that is indeed a good business,” Mike assured him.
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