Why Entrepreneurs Trade in Favours

10/3/2016

A few weeks ago I put a call on my Lightning Lab cohorts Facebook group asking if I could borrow a car for a night for a meeting. The call was answered in 5 minutes by 2 amazing women, Nicola from PropertyPlot and Regina from MOOJ. Not 1 but 2 separate offers in 5 minutes.

That meeting was worth a lot to SuchCrowd. So, basically – I’m forever in Regina’s debt ;)

Last year I learned a lot about the sharing economy through my research on disruptive innovations in transportation, including carshare and bikeshare. This is something slightly different but with similar principles, it’s been coined the 'favour economy*'

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Hmmm yes, drinking coffee and pondering the favour economy ...

Sheena Tahilramani notes that ‘a favour can completely change the trajectory of a company’.

I couldn’t agree more. The reason why entrepreneurs trade in favours is because the value of a favour is worth so much more than money could ever buy.

Let’s look at how the favour economy plays out in different stages – comparing the bootstrapped entrepreneur to what I am going to call the ‘funded’ entrepreneur … just imagine an entrepreneur in a room filled with money bouncing around and throwing it up in the air in delight (or something like that) ...

Bootstrapped entrepreneurs can end up so cash starved they sleep in the back of their car, buy ‘grabaseat’ deals to get on flights at horrible hours, and work out of converted backsheds … in this stage a favour is literally the difference between them making a meeting with a potential client or missing the opportunity.

Ok but surely the ‘funded’ entrepreneur can just hire a car, book accommodation, rent an office – right? Why do they need a favour? The problem is that even the ‘funded’ entrepreneur needs what they can’t buy, they still need a favour. They need the introduction to the person that could become their largest customer yet, they need an in with the company that might want to partner with them to expand their reach, they need their advisors to walk with them into a meeting and shake the persons hand and help make the deal happen. This is stuff money can’t buy, only favours can.

At Startup Space Dunedin we have a slack channel titled ‘callsforhelp’. I absolutely encourage people to ask each other for favours. If it’s something I can help with I hands down will, no questions asked – because a favour from me today might ultimately end up as something amazing later and that is so cool.

Thanks to all my friends who’ve done me some pretty awesome favours lately. Regina for the car, Hazel for letting me sleep on her floor (she even gave me a mattress!!!), Sean and Varsha for ANOTHER car, and the THREE people who responded to my call for help on social media this morning. My friends are awesome … let me know if I can do anything to help you.

*Here's a couple of interesting reads on the favour economy:

Ginia Bellafante: A Favor Economy in Which Kind Acts Come With Expected Reciprocity

Sheena Tahilramani: The Entrepreneur's Secret Handbook of the Favor Economy

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