Category: entrepreneurship

An entrepreneur differentiates her new venture from others by emphasising its novel qualities, yet she must simultaneously attempt to overcome the ‘liability of newness’. This relates to the idea that young organisations are more likely to fail than established firms because they are perceived as less legitimate, must rely on unfamiliar outside parties for resources and often find themselves unable to outcompete market leaders.

For start-ups experiencing valuation lag, it is particularly important to pair the material practices of innovation with symbolic work aimed at building current and potential stakeholders’ confidence. As sociologists Paul DiMaggio and Walter Powell have argued, industrial conditions of uncertainty often give rise to imitation. Firms in unsettled fields model themselves on organisations and organisational forms that are widely recognised as successful. In other words, entrepreneurs can benefit from emphasising the ways in which their ventures are similar to other start-ups that have already made it big.

Presenting and promoting potential

Silicon Valley workplaces generally conform to the tech industry’s institutionalised rules of legitimacy. Google’s campus in Mountain View, California, spawned countless imitators of its open offices, comfortable and whimsical common spaces, as well as its provision of amenities, such as free meals for employees.

A single managerial decision can therefore have both intrinsic and symbolic dimensions. When a company’s founder installs a keg refrigerator in a corner of the office and wears T-shirts and hoodies to work, he is signalling that his company sprang from the same mould as previous start-up unicorns.

For founders and executives, presenting convincing displays of a start-up’s prospects is a crucial precondition for acquiring resources and generating wealth. As founders seek to address valuation lag, they find that investors’ confidence in their companies’ future potential matters far more than the value they have created in the present. Entrepreneurs attempt to manage investors’ collective beliefs about the company, building current and potential stakeholders’ faith in an enterprise that has yet to demonstrate its worth by presenting an image of success and promoting excitement about the start-up’s future.

Building and meeting expectations

Entrepreneurs are deeply aware that they must convincingly perform their self-assurance. Founders calibrate their emotional displays to build external parties’ confidence in their start-ups. As economic geographer Daniel Cockayne notes, entrepreneurs “perform their own human capital, demonstrating both their personal capacities for production and their affective attachments to their work” when expressing unfailing enthusiasm for their roles and their faith in their ventures.

Like a start-up’s founders, its employees, too, find that labouring in organisations is not simply a matter of engaging in productive physical or mental activity. Work also requires individuals to learn the proper affective tone for their social setting. Employees regulate their emotional expression to match the expectations that accord to their role.

Workers engage in ‘surface acting’ when they manage their outer expressions — which may conflict with their inner feelings. But they may also engage in ‘deep acting’ when they try to control their own thoughts and feelings so that they match external expectations for emotional display. When people engage in deep acting that matches what sociologist Arlie Hochschild calls a workplace’s ‘feeling rules’, it can be difficult to say where the ‘true’ self ends and mere emotional display begins.

Bolstering commitment

In venture capital (VC)-backed firms, stock options link the interests of the workers who receive them with those of VCs and entrepreneurs, bolstering employee commitment to the organisations for which they labour. In practice, this means that the speculative logic of finance capital can pervade the upper echelons of the shop floor.

The promise of stock options incentivises even mid-level workers to engage in emotional displays aimed at bolstering the legitimacy of the companies in which they hold a financial stake. In this context, hiring a ‘director of happiness’ focused on keeping employees in a positive mindset makes sense as a concrete investment.

This is an edited excerpt from Behind the Startup: How Venture Capital Shapes Work, Innovation and Inequality by Benjamin Shestakofsky, reprinted courtesy of the University of California Press. Copyright 2024. 

AMBA & BGA members in the UK and Europe can enjoy a 30% discount on a copy of Behind the Startup, courtesy of the Book Club. Please click here for details.

I can’t say I set out to be a social entrepreneur. Although the term has been in use since the 1970s, it wasn’t part of the conversation when I was doing my MBA with Concordia University’s John Molson School of Business in the way it would be now. I knew I would end up as an entrepreneur, but equally I needed training and a few years spent as a commercial banker helped bolster my education with the practicalities of what businesses need to do to succeed.

However, there was also a downside for a person of my perspective in that job. As is the case with many large employers, perception management was common during my time there. One colleague even asked me to act “more stressed out”.  Life in a big organisation just wasn’t for me.

I moved to the UK soon after, with little to my name, and started Bantam Materials UK in 2011. We were, and still are, a supply and distribution company that works with overseas recyclers to provide recycled plastic for the UK and European markets, but we’ve expanded to become so much more. Today, you can find our Prevented Ocean Plastic in products ranging from Lidl and Louis Vuitton to Patagonia and the NHS – and it’s been a period of discovery for all of us.

Combatting the problem of ocean-bound plastic

Through the course of our work, I learned about the pioneering research conducted by Jenna Jambeck and her team at the University of Georgia. Although they weren’t the ones to define ocean-bound plastic, they helped popularise the term and raise awareness of it.

Found within 50 kilometres of an ocean coastline or major waterway that feeds into the ocean, the problem of ocean-bound plastic arises due to a lack of proper waste management infrastructure and collection incentives. In many places, infrastructure is also overwhelmed by population growth and/or increased tourism. If plastic contaminates ecosystems, there is a significant risk to wildlife and biodiversity.

I came to realise that a vast majority of our efforts were aligned with these factors, as we were working directly with local recyclers in areas at-risk of ocean plastic pollution. We quickly identified an opportunity to expand our offering in this space and do something good, while supplying businesses with traceable, quality material that would allow them to better communicate their sustainability journey. After workshopping several names for our programme, Prevented Ocean Plastic was launched towards the end of 2019.

Establishing standards and infrastructure worldwide

As more and more businesses are required to report on sustainability and hit certain thresholds, our business taps into a rapidly growing area. Our efforts also prove that doing the right thing and making a profit are not mutually exclusive, as many people still believe. No matter your career field, we should each ask ourselves at the end of the day if we did more good than harm. If the answer is “no” then we should strive to do better the next day.

The Prevented Ocean Plastic programme has taken Bantam Materials beyond a supply and distribution business, elevating the areas in which it operates. Last year, we launched our ‘25 by 2025’ initiative to develop 25 high-capacity collection centres in areas that need them by 2025. This move follows investment in the establishment of our Bali Collection Centre in 2019 and could be expanded through our work with other investment partners, such as Circulate Capital and USAID’s Clean Cities Blue Ocean initiative through our Prevented Ocean Plastic Southeast Asia arm. Over the last six months, we’ve also seen the grand opening of our first USAID-sponsored aggregation centre in Semarang and the grand opening of our facility in North Jakarta.

We are working to establish waste management infrastructure where it didn’t previously exist and helping to implement standards in relation to prevented ocean plastic. In the past, the recycling industry resembled a ‘Wild West’ where businesses did as they pleased, so establishing guidelines that go beyond regulatory requirements has been essential.

Giving back to further inspiration

This has led us to invest a further $250,000 in University of Georgia research into the hydraulic movement of litter from land to sea. Beyond the coastline, it’s important to understand how river systems, flooding and weather conditions impact the flow of litter, so we can better manage its collection and reintroduction into the circular economy. Our company doesn’t stand to benefit directly from the studies being conducted but, for me, it felt right to give back and contribute to the areas that inspired us on this journey.

Our data collection efforts have also led us to look more closely at the conditions of frontline workers (also known as first collectors) in the informal waste sector, resulting in a groundbreaking study profiling the lives of 100 first collectors to better understand their needs. I am confident this continued investment will benefit our work in the long-term and provide further opportunities to seek purpose and profit for all involved.

The School of Management Sciences at the University of Quebec in Montreal (ESG‑Uqam) has had a donation of CAD$2 million in support of its Impact Entrepreneurship Crossroads.

The Crossroads, or Carrefour, initiative, seeks to contribute towards a more inclusive society in Quebec through the medium of entrepreneurship, with a special focus on under-represented groups. 

Komlan Sedzro, dean of ESG-Uqam, explained: “The Carrefour is of central importance for our school because it contributes to the influence of research activities in entrepreneurship and makes it possible to connect research, the know-how of companies and graduates for the benefit of innovation and entrepreneurship with positive impact.”

The $2 million donation, from Canadian packaging firm Cascades, is scheduled to be disbursed over the next 10 years. “This exceptional support is invaluable and will allow our university to continue to stand out by innovating, training and supporting the entrepreneurs of tomorrow. The Impact Entrepreneurship Crossroads is one of the flagship projects of Uqam’s major 100 million ideas campaign,” said president of the Uqam Foundation’s board of directors, Philippe Rainville.

Headline image credit: Louis Renaudineau on Unsplash

This article is adapted from one that originally appeared in Business Impact magazine (Issue 4 2023, volume 18)