How Good Karma Creates Successful Entrepreneurs

by Ash Kumra

This chapter is a free excerpt from Confessions from an Entrepreneur (Volume 1).

Ryan Paugh: Co-Founder of Young Entrepreneurs Council

When I first moved to Madison, WI to launch Brazen Careerist with Penelope Trunk—a well-known career advice expert, author, and syndicated columnist—everything changed. My support system was thrown out the window, and I spent the majority of my time with two people who were remarkably different from me.

At first, Penelope and I spent a lot of time hating each other. She thought I wasn't cut out to do a start-up; I fired back by calling her a bad person. The truth is, I was just upset at being so unanchored. It takes time to learn to deal with that feeling.

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Ryan Paugh: Co-Founder of Young Entrepreneurs Council

When I first moved to Madison, WI to launch Brazen Careerist with Penelope Trunk—a well-known career advice expert, author, and syndicated columnist—everything changed. My support system was thrown out the window, and I spent the majority of my time with two people who were remarkably different from me.

At first, Penelope and I spent a lot of time hating each other. She thought I wasn't cut out to do a start-up; I fired back by calling her a bad person. The truth is, I was just upset at being so unanchored. It takes time to learn to deal with that feeling.

When "community manager" first became a buzzword among start-ups, my role as a founding team member finally started to come together for me. I could see that our company needed to build more good karma with our early adopters to succeed—and that I was the man to do it. Our team started working well together, and eventually got funded.

Today I know that good karma is what got Brazen Careerist through those early rough patches and helped the company become the sustainable business it is today.

Having good karma isn’t practical business advice, of course. You can’t measure it. And entrepreneurs are too often taught that “nice guys finish last.” However, in today’s hyperconnected world, being likeable can do remarkable things for your business, from keeping customers happy even when you have a buggy minimum viable product (MVP) to attracting the best talent to your start-up team.

Good Karma + User Experience

Most early-stage start-ups have MVPs that are full of holes, uber-buggy and hacked together in an effort to test and iterate. This is an important phase of the start-up process, but also creates a certain amount of angst for your earliest of adopters.

This was a real problem during year one at Brazen Careerist. We shifted our focus every month. It was frustrating for us as the founders, but even worse, it was annoying our users. The only thing that kept them engaged was a level of support they wouldn’t find anywhere else.

Early on we attracted mostly Gen Y professionals stuck in jobs they were unhappy with. Our goal, of course, was to help them get unstuck and find a job that they loved. But until we cracked that nut, we spent a lot of time using good karma to keep them engaged.

Because we had a high-profile career advice expert, Penelope, on our founding team, we were able to attract early users—but keeping them engaged required a lot of hands-on work. We had Penelope doing everything from scheduling one-on-one phone mentorship calls with users to strategically link back to their blogs in her columns.

These types of high-touch gives were time-consuming, but they were also what kept our most valuable users engaged during that critical first year.

Good Karma + Great Talent

Good karma is especially attractive to top young talent who, despite being in the worst job market ever, are also more idealistic than ever.

According to a 2011 Deloitte study on Millennial talent, 92 percent of young people (born after 1981) believe that an organization’s success should be measured by more than just profit. When asked what other measures should encapsulate an organization’s success, the most popular responses were innovation and societal development.

At my second start-up, the Young Entrepreneur Council (YEC), we see these measures in action every day. Our mission is to promote entrepreneurship as a solution to youth unemployment and underemployment, but as an early-stage 501(c)3 nonprofit organization, we aren’t always privy to the incentives that traditionally draw top talent. Yet, somehow we have been able to recruit and retain some of the most hireable people out there.

When we ask our employees what makes being a part of the YEC team so special, the most common response is: “We believe in what we are doing.”

Good Karma + Effective Leadership

Through my work with the YEC I have been able to meet some of the most successful entrepreneurs in the world. One common trait these leaders share is that they understand, intrinsically, that taking care of themselves is an important part of running a successful company. Effective leadership requires a person who is both physically and mentally healthy.

When asking some of the top founders in my network what they do to show good karma to themselves, I’ve found a variety of answers. Yael Cohen, founder of FCancer, boxes to relieve stress and re-focus. Ben Lerer, founder of Thrillist, simply enjoys a beer on the couch.

Or there’s Jason Fried of 37signals, who implements four-day workweeks for part of the year to keep him and his 34-person staff fresh. We’re not talking about 40-plus hours crammed into four days, either, but four manageable work days averaging about 32 hours per week. The result? The same amount of productive work is completed in four days per week instead of five.

My point is this: although karma is not something measurable, it is incredibly important to your company, your customers—and the talent that keeps your business in motion.

So what are you doing to instill good karma in your business?

* * * * *

Ryan Paugh is the Co-Founder of the Young Entrepreneur Council (YEC), an invite-only nonprofit membership organization that promotes entrepreneurship as a solution to youth unemployment and underemployment. Members include the founders of the world’s most elite companies including LivingSocial, Reddit, Airbnb, Klout and Threadless. Paugh also Co-Founded Brazen Careerist which helps professionals discover their strengths, refine their skills and find a job they love. Follow him on Twitter: @ryanpaugh.
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