No, but really…

…why?

There’s that question again. And why shouldn’t it persist? For as long as my new company (non-profit in a for-profit world) exists into the future, perhaps the only thing that’s certain is that it will be the object of such curiosity. Why willingly forego the potential for significant financial gain? Why consume less when you can consume more? Why not take the middle ground: build a more conventional business that – sure, if it floats your boat – gives to charity, but also allows for the accumulation of economic value that can one day be converted into sweet, sweet cash?

What’s the catch?

If you’re keeping track, this will be the first time that I’ve explicitly written a second post about a particular topic (the first one being here), but I think the urgency of the question warrants that. As I said in that first post, to some extent I’m sure that the success of my venture will require that I come up with a good answer to it.

This second post about the ‘Why’ of what I’m doing isn’t meant to rehash my initial thoughts on the matter; they all still apply as much as they did when I first touched on them, so go ahead and reread those if you wish. I’ll use this post, instead, to do a bit of a ‘deeper dive’* on something that I only briefly touched on before.

(*Aside: jury’s out as to whether I’ll be able to tolerate this sort of corporate-speak in the context of a social enterprise. I think that much of what I’ve typically despised about business jargon in the past is that it’s used to either exaggerate the importance of the most spiritually empty busywork, or to obscure the plain truths of business activities that  ultimately seek only to maximize profit – in some cases, at all human or social cost… Whoa, that came out heavier than I thought it would… I’m okay, I swear. But yeah, will I hate corporate-speak in this new world? I don’t know. I’ll schedule a touchbase and loop back with you to discuss.)

The thing I’d like to explore a bit more closely is the cold, hard pragmatism in which my newly chosen path is rooted. That language stands in direct contrast to the ‘warm’, ‘soft’ feelings that you might assume underlie such a pursuit. I’m not saying I have none of those – but if I do, they’re not particularly interesting as a matter of academic exploration, so let’s set them aside for a moment. By the way, you can take the guy out of the quantitative analysis (where my professional background lies), but you can’t take the quantitative analysis out of the guy: I intend, here, to present a starkly rational evaluation of the career paths available to me, in light of some things I’ve learned to this point in my life. If you’re not titillated by experiments of logic, go ahead and roll your eyes preemptively.

…good. Ready now?

Premise 1: Social enterprise has utility.
Here, the word enterprise has a convenient dual meaning as both ‘business venture’ and ‘undertaking’. The latter is less obvious in this context, but most salient to my point: there is undeniable utility – a term I’m borrowing from intro Economics to denote some intangible value – in social pursuits of any variety. It’s not hard to observe this – just pay attention the next time you help someone get their car unstuck after a blizzard** or, even, hold a door open for a person whose hands are loaded with shopping bags. Big or small, these little gestures in assistance of others have some measure of value to their doer – maybe even (?) a more lasting effect than they have on their apparent beneficiary…

(**Editor’s Note: regional references may not apply to all.)

Relevant corollary: the inverse to this sort of feel-good utility is low or even negative utility of behavior… It’s not a distaste for candy that keeps most of us from stealing it from babies; it’s the fact that our love of candy is – usually – outweighed by the shame/guilt we know we’d feel from your garden-variety candy-from-baby heist.

Premise 2: Money has diminishing marginal utility.
‘Diminishing marginal utility’ is Economics’ fancy way of saying “more ain’t always as good as it once was”. If you’re like me and are offered a scoop of ice cream, you cancel all your appointments and hope that it hasn’t melted by the time you’re finished your victory dance. If you’re offered a tenth scoop of ice cream, you drop-kick the person offering it to you – either before or after projectile-heaving scoops six through nine. Somewhere along the way, each additional scoop of ice cream stopped offering as much joy as the one before it (eventually landing – like the stealing of candy from a baby – in the territory of negative value, but that’s beside the point).

Money, in the way of the ice cream you consume before you’d actually prefer not to have any more, has this same progressively diminishing value. The dollar that gets someone off the street has more value to that person than does a dollar to the multi-millionaire who spends it on the jukebox in his mezzanine bathroom. I don’t think I need to explain this further.

(What’s perhaps more interesting is the discussion of precisely when that marginal utility of a dollar begins to decline. Plenty of the research on this topic has hit the mainstream – you’ll hear income figures like $70-75K thrown around. I don’t know if that’s exactly the number; I’m not the expert. But my personal experience leads me to be a firm believer in the basic conclusion of the research: above a certain level of wealth, all else equal, humans return to some default level of baseline happiness or – said another way – perceived utility of that wealth.)

Premise 3: Humans seek to maximize utility, not money.
Of course, a generalization like this one would seem to be disproven by the actions of the money-driven. But I suggest that the actions of those people are either because they haven’t hit the point of diminishing marginal utility of money, or they haven’t recognized it (the latter being the basis for all the “money can’t buy happiness” literature out there). How do I know this?… Eh, call it a hunch. I can’t prove it to you, but pay attention: you’ll see miserable – or at least no-more-happy – wealthy people everywhere. Jim Carrey has a quote that, depending on where you read it, goes something along the lines of “I wish everyone could get rich and famous and have everything they ever dreamed of so they would know that’s not the answer.” There you have it. For every person who would have you believe that being rich is awesome and being more rich is more awesome, there are plenty of people who’ve gotten there and realized that sustained satisfaction is not found in consumption alone.

At any rate, my premise is this: if I offered you the options of being either (a) rich and miserable, or (b) comfortable and happy, you would take the latter. If you’re having a hard time grasping this, it’s because every marketing message you’ve ever been exposed to tells you to equate consumption with happiness. And if you’re picturing a life of tattered clothes and spiritual fulfillment, note that that’s not what I offered you. I referred to economic comfort and am suggesting that anything beyond that does not have inherent utility. Capisce?

(Aside: I need to throw this in somewhere and now seems like as good a time as any… I’m no better than anyone with respect to any of this stuff. I have been right there for virtually my entire life to date, mistaking money for utility and behaving accordingly. The next paragraph explains that, to large extent, it’s nothing more than dumb luck that’s allowed me to step back and reevaluate.)

Premise 4: Most people need to experience Premise 2 in order to get it.
Maybe the thing that I count myself most fortunate for is the opportunity to have arrived at these conclusions and the freedom to act on them. (Okay, that’s two things I’m thankful for…take it up with my editorial staff.) I don’t know what it is about money and consumption – be it just a matter of marketing or otherwise – but for a certain segment of the population, it is nearly impossible to let go of the notion that money has unlimited marginal utility. That applies to those who’ve achieved wealth beyond that mysterious threshold of ‘comfort’ and those that haven’t.

In my case, I would never have believed what I’m now saying, if not for the cosmic confluence of a whole bunch of personal and professional circumstances that ended up dumping proof in my lap. I think it’s the fact that I’ve been able to experiment with different lifestyles (including one that would probably register as ‘consumerist’) that’s enabled my now strong belief here. So it is that I suspect: it is far easier to let go of Consumerism once you’ve had the opportunity to try it on for size. (And even then…)

Putting it all together.
Who doesn’t love boiling down what would otherwise be warm fuzzies into a soulless bulleted list?:

  • Premise 3 tells me that in navigating my future, I ought to be more focused on what’s going to bring me the most satisfaction, not necessarily the most money.
  • Premise 2 tells me that I shouldn’t ignore money, but that I should be conscious of the point at which more of it brings me less value than other things would – which, in this case, includes things that the pursuit of maximum wealth rules out.
  • Premise 1 tells me that I might be able to derive a whole lot of incremental value from devoting my energy to social pursuits. And when taken in conjunction with Premise 2, it tells me that I can optimize overall satisfaction by pursuing money only up to the point where I can derive greater value from pursuing the utility of social goodwill instead.
  • And Premise 4 offers at least one explanation for why not everyone arrives at these same conclusions.

So…academic breakdowns are nice, but what are we really talking about here? Well, the way I see it, I have three choices from this point forward:

  1. Devote my efforts to the almighty Corporation in exchange for handsome financial reward… Big ‘X’ on that one. Even if I were to do this for the specific purpose of maximizing income to give to charity, I would end up hating it. (See concept of “negative utility of behavior” under Premise 1.) See? I’ve been saying all along that this whole thing is selfish, and here’s your proof: I would rather give $100 to charity in spending my livelihood as I see fit, than to give $200 to charity by working a conventional job for a conventional company.
  2. Start my own conventional business, seeking to maximize profit as much as the next entrepreneur… Sure, I would much prefer this to a life of corporate servitude, but it wouldn’t solve for the nagging disutility (not a word) of knowing that I could do more for others, and that my excessively comfortable lifestyle wasn’t necessary.
  3. Do what I’m doing. Trade the diminishing marginal utility of more dollars for the non-diminishing (believe it) marginal utility of social pursuits, unlock a whole world of potential with respect to the business model and the buy-in of the client base and community it supports, and have an absolute blast along the way.

Conventionally, we’re taught to maximize earnings so we can save for retirement, because oh man, wouldn’t it be sweet to love the living shit out of how we get to spend our time?

I’ll let that last rhetorical question hang. If you care to play it out in your mind, I bet you’ll understand…

why.

*****

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