With Independence Day, and the ensuing festivities and trappings, taking center stage this week, we thought it was the perfect time to unpack a question about entrepreneurship that comes up again and again.
Why Do Entrepreneurs Need Freedom?
Freedom itself is a critical part of successful entrepreneurial efforts. At their core, entrepreneurs are creative problem-solvers. Though some problems or puzzles may be small, many others are quite large and complex, involving a great deal of investment. Time and capital are at risk. When conceiving, launching and growing a business, entrepreneurs must focus on the specific needs of their customers as well as the context of the marketplace around them. They need to know and believe that they have not only the freedom, but also the right, to create a better way to do things.
This isn’t to say that entrepreneurs cannot work within restrictions. After all, the given constraints and boundaries of a problem often contain that problem’s solution. And entrepreneurs need to know that the rule of law will remain sacrosanct, consistently upheld and observed. Thankfully, the US doesn’t hold the copyright to freedom, but rather we endorse it around the world. In the 21st Century, there are many other free nations that we count as allies, as well as many more that continue to make strides towards freedom. But here at home, freedom and entrepreneurialism are clearly tied together as part of our country’s original DNA.
Essential Entrepreneurial Freedoms
But what precise aspects of freedom are at play for entrepreneurs? It may be tempting to simply embrace the word freedom as one of our core American traits – along with baseball, mom, and apple pie – and leave it at that. But it’s much more useful to look at some of the exact ways that freedom buoys entrepreneurialism. While the list below isn’t exhaustive, it does help illustrate just how integral the role that freedom plays in the daily lives and activities of successful entrepreneurs.
- Freedom to Speak Your Mind – Before he or she takes a step towards launching a business, an entrepreneur sees something and says, “There’s a better way to do this.” Though this may start as an internal thought, it’s going to need to be expressed again and again in order to build a real business or endeavor. Entrepreneurs need to engage and enlist others as they launch and grow their initiatives. They need to appeal to customers, to partners, to employees, to investors, and to other stakeholders. And they need to be able to hear – to really understand – what all those stakeholders have to say to them in return. Without the freedom for all of these people to speak their minds, as guaranteed within the First Amendment to the US Constitution, this seemingly basic task becomes suddenly murky, difficult, and hard to achieve.
- Freedom to Quit Your Job – The decision to quit a job and dive headfirst into a business is often an emotional one for an entrepreneur. Risks include lost income, increased stress at home, and social pressure. However, one element that entrepreneurs in free societies do not have to consider is any government obligation that restricts them to their post. This simple freedom, perhaps best summed up by Johnny Paycheck, is so often taken for granted, that most Americans don’t even recognize that they have it.
- Freedom to Act – Similar to the freedom of speech, entrepreneurs must know that if they take action, they are not endangering their own well being or that of their families, employees, or partners. Certainly there are risks to starting a business or launching an initiative, and successful entrepreneurs embrace calculated risks as an integral part of their successes. But when entrepreneurs face a real threat of persecution and oppression for launching an enterprise, the incentive to act is dramatically diminished if not squashed entirely. Similarly, severe financial penalties can discourage otherwise eager entrepreneurs.
- Freedom to Fail – This may be the most oft-overlooked freedom afforded to entrepreneurs. While failure is never the desired outcome, it’s a critical part of learning and growing. It features in most entrepreneurial journeys. If people are not comfortable that they can learn, grow and recover from their mistakes, they’ll likely avoid them at all costs. If the penalty for an entrepreneurial failure was certain to be imprisonment, many people with strong entrepreneurial tendencies would never take even the most shrewd and calculated risk. While our legal and financial systems rarely reward failure (and they should not), they do provide processes and protection so that those who have failed may lick their wounds and try again.
- Freedom to Enjoy Success – We know that incentives are the key to getting things done, and while this talk often centers on the incentives we lay out for others, it is just as true for the entrepreneurs themselves. Entrepreneurs take risks, whether it is to change the world or change their own lives. But in free societies, they also rely on the knowledge that should they succeed, they stand to gain from the fruits of their risk, effort, and ingenuity. In societies where successful, profitable businesses become targets for government acquisition or extreme intervention, entrepreneurialism is strangled and effectively deported.
Lessons for Entrepreneurs
Freedom impacts entrepreneurs, and all of their stakeholders, in a dramatic way. It’s easy to take it for granted when it’s there, and becomes all too painful when it is taken anyway. Our freedom, and the protections that accompany it, allows any one of us option to see an opportunity, launch a business, grow it, and (if successful) ultimately harvest it and enjoy the rewards.
It’s important to remember the impact and value of this personal and economic freedom, not just during Fourth of July fireworks but every day of the year. When we don’t guard and uphold our freedoms, we risk losing them.
Photo Credit: AddyG
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