Date: Sun, 3 Oct 1993 00:31:05 -0400 (EDT)
From: Jonathan Priluck <jamcorp@world.std.com>
Subject: Updated version of lecture/discussion
To: rdshydur@MIT.EDU
Message-Id: <Pine.3.07.9310030005.A1641-e100000@world.std.com>
Mime-Version: 1.0
Content-Type: TEXT/PLAIN; charset=US-ASCII


Richard,

	I went over my notes and incorporated many of the fine suggestions
which you and Joost made.  Since I do not have that much time to edit and
re-edit what I have will have to suffice.  Look it over and decide if you
want to circulate it.  It makes little difference to me if the class has
it before hand or not as long as you tell me which it will be.

The following is the text:
       I will try and present this material on two levels.  On one level I
will be presenting choices and ideas which I have had to deal with in
starting a business.  On this level I will not be providing any answers,
only asking you to think about certain topics, which are likely to be
important issues someday, if you decide to follow a similar path.  The
questions I will be raising are questions which I think you are going to
have to confront if you are to become a successful entrepreneur.
       On the second level I will be presenting some of the answers to
these questions which I have chosen.  My answers may not be the same
as yours, and what works for me may not be ideal for you.  Because I see
ethics and morality as the guiding principles in life, I have refused to
carve off business and treat it differently from other aspects of my life. 
The answers and approaches I have taken when confronting these
questions reflects this basic outlook.  These approaches are a reflection
of my personal philosophy and I will do my best to present my views in
as unbiased a fashion as possible, but please keep this bias in mind as I
speak.  What I hope to show you is that there are real advantages to my
particular approach, and if I am successful then I will have demonstrated
the utility of my approach by setting an example which I hope others will
follow. 


                    Ethics in Entrepreneurship

0.  What is ethics?

       Jonathan Priluck's definition is:  A set of moral codes that
       produce good results for everyone.

       One of the primary principles of ethics is that you must "put
       yourself in other people's shoes", to decide if what you are doing
       is good for them.  Self-serving arguments do not hold water
       against actions which adversely affect others.  If people are to be
       adequately compensated, the term "adequate" must be from their
       prospective, not yours.  Ethics speaks strongly against the abuse
       of power and the rationalization of means through ends.

1.  "Business Ethics".

       This should be an irrelevant redundancy.  Why should ethics be
       different for business matters than for personal ones?  Title of
       the lecture might be "ethics is NOT naive".  Also mention that the
       actual question we will be addressing is the application of ethics
       to business.

2.  Entrepreneurs aren't beggars.

       This is absolutely critical to the E.  E's are necessary to society. 
       People need to invest, just as strongly as E's need the
       investment.  Approaching the negotiations for money, with an
       attitude of begging, places the E in an inferior stance
       immediately.

       E's must meet some standards of the investor; so must the
       investor meet some standards of the E.  The situation is a
       *negotiation*, not a *beg*.  The first step to exercising your
       rights is the recognition that you *have rights*.

       Those who make the rules are always in control; "whoever makes
       the rules wins the game".  E's must be strong enough to make
       their own rules.  If you allow people to dictate to you just because
       they have money, then you are allowing them to make the rules,
       and this is not good.  It is not a forgone conclusion that you must
       allow this; this is inescapable when you view yourself as a beggar
       and view your position as weak.  This is akin to giving up without
       a fight.

3.  Doing it NOT for the money.

       Money is the measure of wealth and value, and should not be an
       object or goal in itself.  If it is treated like an object in itself, it
       can be created without connection to wealth and value;
       consequently, it will be falsely representing.  Entire economies
       have crashed due to this disconnection of wealth from money.  
       Also obtaining wealth without creating value means the wealth
       was gotten in a zero-sum situation.  When you create new wealth
       you are not participating in a zero-sum game, and you do not
       need to have losers in order for you to win.

       What should be the goal instead is *value*.  From the creation of
       value, which is wealth, the measure (money) will naturally follow. 
       You must convince people that a paper entity has value (like
       mutual funds, futures trading, commodity and stock brokering,
       etc.); you don't need to convince anyone that a running factory
       has value -- it is too real for them, and the value is obvious.

       There are many arguments to rationalize every profession and
       every action; the question is:  are the arguments self-serving?  If
       the arguments are self-serving, then we must question the ethical
       value of the work being done under these justifications.

       There are plenty of excellent reasons -- besides money -- which
       can motivate a person to succeed.  It is my belief that those who
       are motivated by money alone are necessarily short sighted.  For
       me the greatest reward may be to fly on a plane made of LBMs;
       or to leave behind a better world than the one I entered, to be
       remembered as one who contributed far more than I took.  These
       are ethical and moral reasons for taking action and they are in
       my opinion far more potent a motivation than money alone.  
               I have found that people who allow money to dominate
       their motivational structure suffer certain very specific ills.  One
       is egotism in which people accumulate/hoard cash to boost their
       self esteem; many of those who pursue money for security find
       there is never enough.  I believe this is because true security can
       only exist within a community as a member of it.   Most people
       wish to be admired and respected by their peers.  Those who use
       the accumulation of wealth to impress others generally fail
       because hoarding can only inflate our own opinion of ourselves;
       generally, it is giving which can inflate others' opinions of us and
       thereby help us achieve the security which we truly seek/need.  


4.  Patience and self-promotion; actions speak louder than words.

       Patience is necessary.  Real things take time to develop.  Typical
       self-promotion is considered crass and generally undermines your
       efforts.  The key to successful self promotion lies in patience.  Do
       not attempt to impress people at your first meeting.  Go out and
       be yourself, do not actively attempt to impress people.   Say what
       you are going to do, and do what you say.  Later when you meet
       again present the evidence of your actions in a firm but
       diplomatic fashion.  In this way people will come to know you by
       your basic competence and not by some facade which you will be
       at pains to maintain for any great length of time.  

       Self promotion is necessary, but when done through patience and
       actions, it need not be painful.  When meeting a prospective
       investor I do not expect them to invest at the first meeting.  I
       know that if I tell them my plans, and go about my business, the
       next time we meet I will be able to tell them the things I have
       accomplished since our last meeting.  This, along with some
       tangible proof of these actions, is generally all the self-promotion
       I have ever needed.  The other advantage to this approach is that
       I need not track every contact and new investor.  By
       concentrating on doing the things I am trying to accomplish I can
       be assured that whenever I next run across the individual again
       I will have some results to present to them.

5.  Self protection AND trusting others.

       Self protection is necessary, since larger businesses have the
       advantage of size, or certain other people have the advantage of
       wealth.  Established business and wealth can shove the E from
       the market immediately.

       Despite this need for protection, the E must perform a seeming
       contradiction in action, by trusting certain other people.  There
       can't be a written contract for every person the E comes into
       contact with.  There is a difference between doing business "fast
       and loose", and doing business informally.

6.  Don't forget where you came from!

       a.  Good ideas need champions.
       b.  Nothing happens without capital investment.
       c.  The wealthy don't have a monopoly on good ideas.

       These statements give a certain result:  support the small E.  It
       is what you needed; now, give it back.  A country full of
       individuals is NOT a society.

       If you are a successful entrepreneur remember where you came
       from and reinvest in the next person with vision.  I know I am
       better off when people like myself help the next generation,
       because than I can expect the previous generation to assist me.

7.  Responsibilities.

       We each have a responsibility to our community and to our fellow
       man; those of us who are the most privileged in society have the
       greatest responsibility.  It is my belief that only when by
       accepting these responsibilities and making an honest effort carry
       them out to the best of my ability can I develop the skills needed
       to carry out my plans.

       We need to fight and combat the feelings of entitlement which is
       so prevalent amongst our middle and upper classes.  Do not be a
       fool and allow the advertisers -- who line their pockets at your
       expense -- to bolster your ego with their views/lies.  They are
       selling you something, and if you buy into it you are under their
       control, no matter how "successful" you become.  Do not accept
       compliments from people who are taking your money and living
       off your vanity and ego.  These folks are not your friends.  They
       are telling you to ignore your responsibilities and manipulating
       your efforts to meet their ends through emotional responses. 
       When you accept you responsibility you immunize yourself against
       these manipulations and free yourself to accomplish up to your
       full potential.
       
       If someone chases material wealth, a fancy BMW for example,
       they see the add for the BMW and they feel what is associated
       with the car; respect and wealth.  So they end up trying to obtain
       that car for the respect they think it will bring them without
       actually doing anything genuinely worthy of respect; even if you
       get the car it will be an empty victory.


8. There are plenty of things that still need our attention.

       Discussion of all the things one can still do.  Improving existing
things or creation of new ones.  In almost ever field there is room for vast
improvement, the first step is to be aware of what is out there already. 
When you know how things work and why they are done you can think
of improvements.  And you can best find things to improve in the fields
which you have a genuine interest.  The more you know the better your
chances of seeing a better way or finding what needs improvement.  And
remember better can mean not only cheaper but also faster, safer, lighter,
cleaner, more effective, tougher, more attractive, easier to use, etc.


If you choose to distribute this before I come then I will do a lot more
elucidation; if you chpoose not to distribute it to the class ahead of
time then I will stick pretty closely to the text.  I trust your judgement
on this issue, do whatever you think is best.

Regards Jon Priluck


*   Jonathan Aerospace Materials Corp., 41 Naples Road, Brookline MA 02146  *
*            Tel (617) 731-3637, Internet:  jamcorp@world.std.com           *
*     Developers and future manufacturers of Lattice Block Materials ...    *
*                the world's strongest and lightest materials.              *
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