The Purpose of a Business


Imagine if you were an entrepreneur with the ability to be in whatever business you want but for the sake of simplicity let’s pretend that you’re an ophthalmologist trying to set up shop. But, there’s just one caveat and that is you’re stranded on a deserted island all by yourself.

Will your business succeed or will it fail? You’re probably like… WHO CARES?! THERE ARE BIGGER PROBLEMS.

Indeed, but that brings me to the first point that I would like to make and that is, businesses cannot exist on their own. Even if I tilt it completely in your favor and tell you that you’re the world’s most renowned and decorated ophthalmologist, would that make a difference? The end result would still be the same. All of that knowledge and skill that you possess is absolutely worthless when there is no one there to receive your service. Self-consumption is also out of the question because you can only practice eye surgery on yourself so many times…

Therefore, a prerequisite for a business to exist is a community that has an unfulfilled need.

Now let’s invert the scenario where you have a community but with no businesses present. What are people supposed to do? How will their needs be met? I believe that over time, members of the community would naturally figure out ways to meet the unmet needs. Whether you want to call them businesses or other entities is up to you…

This is why I believe that neither a community nor a business can exist exclusively of one another. Peter Drucker described it best IMO:

Businesses are organs of society.

If your business was the lungs of the body, the body could not survive without you but at the same time if it was just the lungs that were present… the lungs itself would not survive either. They both work with each other to create a whole system that functions harmoniously. Therefore, businesses and the community it serves co-exist in a mutually beneficial way.

. . .

But, of course we live in a capitalistic society and there are many businesses that attempt to serve the same function. An unprofitable business cannot stay in existence. Indeed, capital to business enterprise is akin to oxygen for living organisms.

We should think about what happens when a customer makes a purchase. At this point in time, when you want something there are most likely a plethora of options available to you. So, when you make a decision to purchase from one place, you deprive an opportunity to all the other places competing in the same space. If you think about it in that way, it is basically a voting machine where each purchase is a vote of confidence. The ones with the most votes will thrive and the ones with the least will perish.

This is precisely why for my own enterprise we strongly believe that:

We persist not because we insist but because you need us so.

The burden or survival has shifted from the business and onto the community. Enterprises do not get to decided whether or not they are needed because the one who chooses is the community that it serves.

Opinion end but am I wrong?

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