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Principles of Entrepreneurship: Start Up Your Company

by Jeffrey Barg

October 15, 2014

There was a time when the first company a young person worked for was their employer for life. This company would invest numerous hours into the training of this new employee, who would then reciprocate with a lifetime of loyalty and dutiful service.

That business model has come and gone, according to best-selling author and tech entrepreneur Ben Casnocha.

“We have seen a shift to the opposite extreme of the family business model,” he said. “They’ve minimized the employer/employee relationship, and they are increasingly treating employees like free agents.”

Mr. Casnocha feels that neither system is optimal.

“A company should treat its employees as allies,” he said, adding that this alliance would be beneficial for both sides, and forego any misconception about either side’s devotion to the work at hand.

“In an alliance, a company treats an employee as a fully autonomous individual talent. An employee treats a company as a place where they can do great, innovative work in a reasonable amount of time,” he added.

The change from other business models to an alliance represents a paradigm shift in the face of managerial innovation.

“The most innovative companies in the world are able to recruit, effectively manage, and retain amazingly innovative people,” he said.

The responsibility for success, however, lies with the company, not on the individual.

“It’s up to the company to choreograph the progressive levels of commitment between the company and the employee,” Mr. Casnocha said.

Companies unable to adjust will find themselves without the necessary human resources for success. Mr. Casnocha related an anecdote about The Walt Disney Company firing Jon Lasseter, who went on to great success as the founder of Pixar, which was in turn bought by Disney.

Mr.Casnocha reiterated the importance of human capital.

“To discuss the future of the knowledge economy and not analyze the people that make up the ecosystem is like taking a bus trip around the country but then forgetting to hire a driver,” he said.

Globalization has resulted in shorter obligations between companies and employees, he suggested, but the goal of companies has not changed. They wish to make a profit, and Mr. Casnocha believes it is up to the employee to invest in and educate themselves to acquire the skills they need to succeed.

For those of us that may be uncertain how to make those investments, Mr. Casnocha added a little advice.

“The fastest way to become the person you want to be is to surround yourself with people who are already