The top paid athletes in the world have dazzling net worths (https://www.celebritynetworth.com/articles/sports-news/the-25-richest-athletes-in-the-world-2020/). Pick a sport. Basketball. Michael Jordan leads all athletes with a net worth of $2.2 billion. LaBron James, the third most wealthy basketball player stands at less than 22% of Jordan’s value at $480 million, over $100 million behind #2, Magic Johnson who owns a movie studio, promotional product marketing company, and part of the Los Angeles Dodgers baseball team. Golf. Tiger Woods has a net worth of $800 million. Auto Racing. Michael Schumacher has a net worth of $600 million. Boxing. Floyd Mayweather has a net worth of $505 million. Now compare those individuals with entrepreneurs who successfully competed in the business world (https://wealthygorilla.com/top-20-richest-people-world/). Jeff Bezos, founder of Amazon, at a net worth of $183.8 billion is approximately 84 times more wealthy than the person at the top of the athletic financial pyramid. Microsoft co-founder Bill Gates has a net worth of $115 billion with Facebook founder, Mark Zuckerberg, close to joining the $100 billion club with a net worth of $98 billion. Barely breaking the top 25, at #24 is Phil Knight, the visionary behind Nike and a strong collaborative partner with Mr. Jordan, with a net worth of $45.5 billion, still over 20 times more than the most financially successfully athlete in history. If financial assets are the metric that success is judged on, it is clear that the top entrepreneurs in America tower over the individuals who have had success on the field, court, ring, golf course, or track.
However, it has been my experience based on almost thirty years working with a demographic of entrepreneurs that money rarely fuels the competitive engine of business owners. I have found that entrepreneurial motivation traditionally comes from a desire to satisfy one of three psychological needs.
Achievement – The desire to be the best fuels achievement in every profession from business to sports to art to science. A prime example is the competition created through Project Warp Speed among America’s best and brightest scientists and pharmaceutical companies to create and distribute the best possible COVID-19 vaccine for the American people and in the future the world, as the United States through innovation and intelligent deployment of resources steps forward and leads again. Six companies were invited to this competition ( https://www.cnbc.com/2020/08/14/the-us-has-already-invested-billions-on-potential-coronavirus-vaccines-heres-where-the-deals-stand.html). History will judge who achieved the best results with their team. It is my hope that multiple gold medals are ultimately awarded in this competition. Achievement is a regular occurrence for publicly traded companies with significant talent and resources, however a better paved pathway to success also exists than for privately held companies and family businesses.
Success in basketball often starts with a single individual shooting hoops by street light. That was the pathway taken by Mahmoud Abdul Rauf (Chris Jackson) to become one of the best college basketball players in history and the best free throw shooter in NBA history, if he had managed to have enough free throw attempts (https://bleacherreport.com/articles/288651-mahmoud-abdul-rauf-a-portrait-of-perfection). As a former college basketball coach, I will eternally admire the beauty and perfection of Rauf’s shot. The road to success for an entrepreneur is also commonly turbulent, stressful, requiring long hours, perseverance, and strong faith. It often starts in an apartment, garage, or on a kitchen table or desk with little more than an idea. The idea needs to be developed, modified, and introduced for critical scrutiny in the marketplace. The navigation star for a willingness to set out on this voyage is a need for achievement. Achievement can be quantified in a variety of forms. It can be creation of a competitive or superior product or service, market share thresholds, geographic area coverage, or financial achievement.
Achievement can be obtained by first generation owners of a company and successor generations. It is common at IBA, as the oldest business brokerage firm in the Pacific Northwest, to see first generation owners take a business from idea to one successful plateau of achievement and then “take their chips off the table” and sell passing the helm to a successor through a professionally facilitated exit strategy who with vision, skill, and execution takes the company to a higher plateau of achievement. Any person who has reviewed the history of a companies knows that progression from $1 million in sales to $10 million to $100 million involves periods where the climb is steep and treacherous and others where it is downhill in the sun. The climb also frequently requires different knowledge, experience, and skills at different stages of a company’s life cycle. The relentless pursuit of excellence is a personality characteristic of every individual motivated by achievement from a golfer practicing pitches to a manufacturer trying to get to a specific tolerance threshold.
Recognition – A second motivational force driving high achieving individuals is a need for recognition. In sports, the recognition can take the form of personal awards and/or team trophies. In business, recognition of quality is provided in financial performance (People vote for products and services they like with their dollars), reviews from media to peers to online venues like Google & Yelp, and being deemed an expert by an industry, the public, and community. Many entrepreneurs, and this may be surprising, are not motivated by money. Money is a byproduct of achievement. They are motivated by recognition and in constant pursuit of a continual flow of positive reinforcement.
Social Connection – Humans are social animals. People need people. I believe this summer we will see a surge in social engagement as society gains herd immunity through vaccinations combined with prior infection in the population. Many people organically build relationships in a circle of friends and family. However, for many extrovert entrepreneurs that is not enough. They desire more people in their lives to support and collaborate with on the road to achievement. One of the benefits of business ownership is that you get to build a team of like minded people. It is a wonderful feeling to be wanted and needed. It can also be an emotional and mental burden. Many entrepreneurs seek to build a better world and create opportunities for others. This can take the form of creating a diverse employment space, hiring people with disabilities, or bringing job opportunities to an underserved or desired area.
No matter whether you want to create a business or buy and enhance an existing business, the opportunities for achievement, recognition, and social connection are limitless as an entrepreneur. IBA is honored to work with people with the entrepreneurial demographic daily. They are many of the best and brightest society has to offer. As an entrepreneur myself, I can say I have personally felt the adrenaline rush that results from achievement, recognition, and building a quality team who through mentorship and support achieve their professional goals. I have also stressed over bills on my desk and finding solutions to problems that impact my company, our clients, and staff. The above said, I cannot picture a better life than one spent “lacing up my sneakers” and “running the court” as an entrepreneur.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, accounting, legal, wealth advisory, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.