Maslow’s Hierarchy of Entrepreneurial Needs

Maslow’s Hierarchy of Entrepreneurial Needs

Maslows-Hierarchy-of-Needs

“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.

  • natacha dugas

    This is a very interesting way of looking at it. Maybe that will help me stop putting too much pressure trying to jump up top without taking time to get the basic covered. Great article!! Thanks Dan!

    • http://twitter.com/danmartell Dan Martell

      It may… it’s almost like levels of accomplishment or self awareness. I’m not saying you can’t jump to the top… but I would imagine it’s a lot tougher without having the others needs met.

      Just a framework to think about your day.

      Appreciate the comment.

      DM

  • William Oliver

    Wonderful post, I’ve definitely gone through all of these stages, hopefully at the final stage now!

    • http://twitter.com/danmartell Dan Martell

      Great to hear.

      The last stage is one where you can spend the rest of your life, and try different things based on your beliefs. For me, there was a distinct way of looking at life before & after having kids and I think that’s o.k.

      DM

  • coffee_stewart

    Great post, enjoyed it a lot.

    I can’t help but think I find myself in striving for more in all of these categories at once.

    • http://twitter.com/danmartell Dan Martell

      That makes sense … since they all stack on each other. We can always improve on out impact.

  • Yasmine Mahmoudieh

    Hi, I believe you are absolutely right and I have read Masloff a while ago.
    In my case it is a bit different as I am in the process of implementing the last stage in my start up from the beginning as mykidsy is all Naomi improving life for children white they are still young and like sponges taking in all new experience. My motivation for my tech start up is to make it easy for parents to engage their children into many different activities that will. Inspire the, to find their passion in life. That is why I put my very successful architecture and design career aside to concentrate on creating the best global marketplace to discover and book kids activities. If the purpose of your business has the well being if future societies at its core you can mix the hierarchies a bit from my point of view.

  • http://www.nichesocialnetworks.com/ Chris Spurvey

    Great post Dan. You have me deep in thought here today 🙂

    • http://twitter.com/danmartell Dan Martell

      Thanks, that was the plan 🙂

      It’s heady stuff, but it’s worth understanding as we don’t get time back and I love sharing where I know it can help accelerate things.

      Glad to be of service.

  • http://www.atVenu.com Derek Ball

    Great post Dan! Like you, I’ve had more than one exit with different levels of ‘success’ and many different learnings from the experiences! It is easy to place myself in the stages of your modified Maslow’s hierarchy. From my experiences in building multiple startups, exiting some, crashing and burning (in one), you are bang on!

  • Arvind

    Cant we do the last step(Stage 5) parallel to each step, such as thinking of what can I contribute to society while I am growing or choosing the career or something which can help my neighbourhood or family or friends or society where I live in. My 2 cents cant all the stages go along with the 5th stage?

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