“It isn’t normal to know what we want. It is a rare and difficult psychological achievement.” ~ Abraham Maslow
All great entrepreneurs have this in common. They know what they want. But they didn’t always know what they really wanted. Most of them went through what I call Maslow’s Hierarchy of Entrepreneurial Needs, borrowed from Maslow’s Hierarchy of Needs depicted above. My experience was no different.
If you haven’t read it, you should. He argues that it’s very rare for someone to strive for self-actualization (top of the pyramid) without having their needs first met in other stages like physiological (water, food, sleep) at the bottom of the pyramid. In between physiological and self-actualization there are other needs like safety, love and esteem.
I believe the same psychological structure, a pyramid, can be used to think about building a company. You would hope that – out of the gate – you would discover your life’s purpose and start there, but from my experience, it doesn’t usually happen that way! Usually, it follows the same path, of needs requiring to be met, before you can move up to the next stage.
Here’s how I would define the Entrepreneurial Needs pyramid starting from the bottom:
Stage 1: Getting Paid For Something You Created (Physiological)
Starting a business is easy. You just create something that someone will pay for. For me, it started with a snow fort that I used to charge a quarter to play in when I was 8 years old. Do you remember your first “company?” You typically started with the motivation of money. Even though I was only getting paid a quarter, it gave me enough money to buy gum at the corner store. Getting paid for something you created leads to Stage 2.
Stage 2: Business That Supports Itself (Safety)
Once you’ve tasted the ability to make money, it usually grows from there. The next stage is when you’re working in your business full time and it easily supports itself. It gives you a sense of security to create a living. It took me many years to get to that stage. I was 21 working as a consultant making $150,000/year and all my expenses were paid. It felt great, but after a few years I started looking to do more than just supporting myself. That brings us to Stage 3.
Stage 3: Great Business Relationships (Love & Belonging)
This stage is all about people. Even though I was making money and living a lavish lifestyle, I realized that every time I started with a new company, I had to start from scratch with a new team of people. I felt the need to have more. So when I was 24, I started Spheric Technologies. We hired brilliant people and did great work with some amazing business partners. It really was about connecting and surrounding myself with people who understood me and who had shared values. You start to find a groove in regards to your friends and the people you spend time with. Everyone seems to “get it” and life feels integrated. Once you achieve that, you start looking higher, towards the next stage: Excellence in Business.
Stage 4: Excellence In Business (Esteem)
Once things get rolling on the business and people side, you start looking at your company from an outside perspective. You look for external validation. This can come in the form of awards, recognition from your peers or acknowledgement that you’ve built something special. It’s more than just about having a business, it’s about recognition and confidence. Once that happens, you graduate to the next stage: Purpose & Legacy.
Stage 5: Purpose & Legacy (Self-Actualization)
This is the point where you start questioning the purpose of your business. You ask yourself if it’s having an impact on the world, what your legacy will be and how the world will be better for you having lived in it. You get inspired by others that have had a lot of success and put it all aside to create something that will have a bigger impact. You ask yourself tough questions like, “What makes me happy?” or “Why am I here?” and “Can I do more?” You may modify your current business to accomplish this or leave to start something new. This is the highest point in the Entrepreneurial Needs Pyramid.
Looking at your journey in business through the lens of the Entrepreneurial Needs Pyramid will help you identify where you’re at, what to expect next and give you guidance in deciding what you want in your entrepreneurial life.
Can you jump stages? Maybe, but it’s unlikely. Here’s a list of people that are following their purpose and who all started at the bottom of the pyramid and worked their way up. Scott @ Charity: Water, Dale @ Sevenly, or Taylor @ Change Heroes.
Go do some research on other business leaders like Steve Jobs, Elon Musk or Bill Gates. They all went through the same stages. The key is being self aware.
Do you agree? If not, let me know below. Do you have any other examples that are worth mentioning? Leave a comment below.