Dictionary.com defines a business as: “a person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern.”
I’d like to draw your attention to that last bit: “profit-seeking enterprise.”
In today’s world, we have a relatively rigid notion of what we believe constitutes business. DJ Quik once said “If it don't make dollars, it don't make sense,” and I’d be willing to go out on a limb and say he’s not the only person who feels that way. If our central definition of a business is based on the notion of making dollars, everything else doesn’t make sense.
Definitions matter. If you have a contract with a supplier to deliver your crystal glassware to a warehouse, and you’re unclear on the word “deliver,” they could drop it on your doorstep without violating the letter of the agreement, if perhaps not the spirit. You’ve probably seen some Ring camera videos of Amazon employees doing similar things before.
I’d like to propose a different defintion for a business that I think would serve us better in the world we live in today:
“A business is a tool designed to accomplish a clearly-defined mission and achieve a vision as its outcome.”
In this framework, profit is a means, but not the end.
When I talk to my clients, I tell them that money is like blood. You can loosely imagine a business as a sort of organism: it has DNA (the philosophy that dictates how all the cells are fashioned, operate, and fit together,) organs (departments that serve specialized functions,) a nervous system and brain (management, executive decision making, and information processing,) and a heart that pumps blood to all the limbs (the finances.)
Your body uses blood to send oxygen to your cells so they can do their job, and money works in a very similar way in a business. If you’ve ever worked in a startup that’s running out of money, you may have noticed that decisions start being made increasingly poorly, much like a person who isn’t getting enough oxygen to their brain.
Scarcity is a bad state to be in.
However, there’s a difference between the local scarcity of trying to figure out how you’re going to run payroll or keep the lights on, and the sort of metaphysical, big picture notion of scarcity versus abundance that philosophers, economists, and affirmation gurus like to debate.
Consider the fact that the majority of the things you own not only didn’t exist 100 years ago, but could not have existed at all. One of the beautiful things about the human mind is that we have the ability to create new value where it didn’t exist before, and this process of creating new value compounds on itself in new, exponential ways over time.
A good example of this is genome sequencing. It cost nearly $3B and took over a decade to sequence the first complete human genome, which was completed in the early 2000’s. Today, companies like Illumina can sequence your entire genome 30 times in a total of 25 minutes, and for consumers, it’s possible to get your whole genome sequenced for less than a thousand dollars.
Think about that for a moment. It went from a billion dollars to under a thousand in less than 30 years. What’s more, it spawned not only an entire industry built on genomics, but amplified many more, including precision medicine, AgTech, pharma, and countless others.
It’s anti-scarcity. New value emerges from insights. There isn’t a finite supply of value in the world, and as new value emerges, more value can be unlocked in exponential ways. One of my clients, GenRAIT, exists to help organizations in the life sciences and genomics capture this enormous amount of data, and they couldn’t have existed at all more than a decade or so ago because the market just wasn’t there.
When you look at the numbers or the sheer rate and scope of innovations occuring in the world, our commonly-held beliefs around scarcity start to break down. New value, like hope, seemingly springs eternal, and we’re able to gain more and more benefit with the careful application of insight to the world we live in.
Another story I love that illustrates this point is the invention of the Haber-Bosch process for fixing atmospheric nitrogen, which you can read about in more detail in the phenomenal, captivating book The Alchemy of Air. In a nutshell, during the 1800s the equivalent existential threat to our modern climate crisis was the usage of nitrogen-rich fertilizers. These had a finite supply, sourced from two locations (the Atacama desert and an island with a mountain of bird guano,) and we were running out, which spelled global starvation on an unprecedented scale. Haber and Bosch dedicated many years to the problem and finally figured out how to harness the nitrogen in the air to produce synthetic fertilizer, saving the world.
(The reason you don’t know this story is because the same technology they developed led to the mass manufacture of bullets, prolonging the first World War, and the invention of gas weapons, which led to many horrific things in both WWI and WWII, including the gas chambers.)
Like much of human invention, it’s simultaneously wildly optimistic and miserable, and we see something essential about humanity there. Invention is neither inherently good or bad, although I’d argue it’s inevitable. Every new technology opens the door for a hundred more, and we’re the deciders of how that new technology gets used.
This is why, more than anything else, it’s critically important to think about the long-term in today’s world. Just aiming at profit is not enough, we have to change the way we think about business to be more precise. We need to aim at a mission with clear criteria for success and failure, and we need to have a vision of what we want to achieve.
When we don’t do this, we open the door for all sorts of terrible decisions.
“Hey, we can save a bunch of money if we use south Asian slaves labor,” is an acceptable choice if your first and last focus is on profit, but if your company is on a mission to sustainably and ethically manufacture shoes, that prior ethical trade-off isn’t even on the table.
Scale is a dangerous thing, and if we’re going to scale in a way that’s sustainable for someone other than the company, we have to think about how we’re even defining what we’re doing. Business philosophy isn’t just helpful, it’s essential for us to navigate the increasingly complex and demanding world we find ourselves in.