The 12 Laws Of Entrepreneurial Power


A version of this article previously appeared on Forbes.

A number of my UC Santa Barbara entrepreneurial students have asked my opinion of Robert Greene’s The 48 Laws Of Power, prompting me to check it out. Given the book’s commercial success, I had high hopes. Sadly, I was disappointed by Greene’s Machiavellian cynicism.

When I later learned that Mr. Greeene wrote the book while struggling to suceed as a Hollywood screenwriter, I wasn’t surprised. A more accurate title for the book is: 48 Ways To Be A Worldclass Douchebag.

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Mr. Greene’s book might be applicable to Hollywood’s super-competitive, mean-spirited culture. However, most of his rules are anathema to establishing a healthy startup culture.

For instance, his second law encourages power seekers to, “Never put too much trust in friends, learn how to use enemies.” Greene goes on to state that, “you have more to fear from friends than from enemies.  If you have no enemies, find a way to make them.” Huh?!

This might be wise counsel for Jerry Maguire, but it is the exact opposite approach an entrepreneur should take.

Successful startups rely on a network of stakeholder who have a vested interest in the venture’s success. These mutually advantageous relationships are optimized when they are built on a foundation of trust, rather than coercion, trickery or fear.

If an entrepreneur were to strictly follow Mr. Greene’s rules, they might have a shot at producing a screenplay, but they would almost certainly fail in business. Yet when viewed through the prism of honor and transparency, a handful of Mr. Greene’s laws offer helpful counsel to forthright entrepreneurs.

Note: the following italics text is excerpted from Mr. Greene’s book.

1) Law 4 – Always Say Less than Necessary

Greene: When you are trying to impress people with words, the more you say, the more common you appear, and the less in control.  

Few customer pitches are too brief – fulfill your customers’ needs by saying less and listening more.

2) Law 5 – So Much Depends On Reputation – Guard It With Your Life

Greene: Reputation is the cornerstone of power.  

As noted in Honesty Is An Entrepreneur’s Secret Weapon, your character is precious, just as your company’s reputation is its most valuable intangible asset. In the digital age, reputations are easily besmirched and difficult to rehabilitate. Protect your personal and corporate brands by always doing what you should do, rather than what you could do.

3) Law 8 – Make Other People Come To You – Use Bait If Necessary

Greene: When you force the other person to act, you are the one in control. 

Introductions by a trusted third parties are generally more effective than cold calls. Build your network by asking your stakeholders for introductions and references.

4) Law 9 – Win Through Your Actions, Never Through Argument

Greene: Any momentary triumph you think gained through argument is really a Pyrrhic victory. The resentment and ill will you stir up is stronger and lasts longer than any momentary change of opinion.  

Let your actions convey your capabilities – deliver value to your customers rather than promises of future greatness.

5) Law 10 – Infection: Avoid The Unhappy And Unlucky

Greene: You can die from someone else’s misery – emotional states are as infectious as disease.  

Some people are inherently unhappy and it is beyond your power to change them. Perpetually dissatisfied people are toxic to your culture and will poison their compatriots with their persecution complex. Startups simply cannot afford gratuitous drama. As such, when hiring, be suspect of any candidate who bad mouths a former employer, boss or peer and does not accept responsibility for the setbacks in their career.

6) Law 11 – Learn To Keep People Dependent On You

Greene: To maintain your independence you must always be needed and wanted.  

Customers should remain dependent on your solution(s) because of its compelling value proposition, not due to onerous contracts or other artificial controls.

7) Law 25 – Re-Create Yourself

Greene: Do not accept the roles that society foists on you.  

Don’t let the market define your venture, its culture or its go-to-market strategy. Contrarians founders usually win the day – revel in your non-conformity and ignore conventional wisdom.

8) Law 26 – Keep Your Hands Clean

Greene: You must seem a paragon of civility and efficiency.

Don’t just maintain the appearance of impropriety, avoid acts that would shame you if they were made public.

9) Law 27 – Play On People’s Need To Believe To Create A Cultlike Following

Greene: People have an overwhelming desire to believe in something.  

Instill a strong belief among your stakeholders, based on promises you can uphold.

10) Law 28 – Enter Action With Boldness

Greene: Timidity is dangerous (it is) better to enter with boldness. Everyone admires the bold; no one honors the timid.

Hesitancy in the land of startups is seldom rewarded.

11) Law 42 – Strike The Shepherd And The Sheep Will Scatter

Greene: Trouble can often be traced to a single strong individual – the stirrer, the arrogant underling, the poisoned of goodwill.  

Maintain a healthy culture by ruthlessly eliminating people whose are ill suited to the company’s ethos.

12) Law 47 – Do Not Go Past The Mark You Aimed For; In Victory, Learn When To Stop

Greene: The moment of victory is often the moment of greatest peril.  

Companies often fail by overextending themselves after initially experiencing small-scale success. Past success is irrelevant, you must earn each future victory.

Follow my startup-oriented Twitter feed here: @johngreathouse. I’ll never tweet about clueless politicians or that killer burrito I am about to devour – just startup stuff.

Image : Wikipedia

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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