As a practicing Mormon and active entrepreneur I’ve had my share of time to ponder on the intersection of faith and business, especially as the principle of faith relates to startups, those businesses that at their most vulnerable stage of life.
First, let’s get semantics out of the way. Some use the word “faith” to refer specifically to faith in God in Jesus Christ. Others refer to their “faith” as a term synonymous with their religion, or the specific denomination of which they are a member. For the purposes of this post I am using the term to refer to the process of acting without complete knowledge of the results of one’s actions.
Faith Is Action
As Joseph Smith Jr., the first prophet of The Church of Jesus Christ of Latter-day Saints (“Mormon” is a nickname for members of the LDS Church), aptly put it as he was teaching a class of Church members:
If men were duly to consider themselves, and turn their thoughts and reflections to the operations of their own minds, they would readily discover that it is faith, and faith only, which is the moving cause of all action in them; that without it both mind and body would be in a state of inactivity, and all their exertions would cease, both physical and mental.
Were each of you in this class to go back and reflect upon the history of your lives from the period of your first recollection, and ask yourselves what principle excited you to action, or what gave you energy and activity in all your lawful avocations, callings, and pursuits, what would be the answer? Would it not be that it was the assurance which you had of the existence of things which you had not seen as yet? Was it not the hope which you had, in consequence of your belief in the existence of unseen things, which stimulated you to action and faith, or belief, for the acquisition of all knowledge, wisdom and intelligence unless you did believe that you could obtain them? Would you have ever sown if you had not believed that you would reap? Would you have ever planted if you had not believed that you would gather? Would you have ever asked, unless you had believed that you would receive? Would you have ever sought unless you had believed that you would find? Or, would you have ever knocked, unless you had believed that it would be opened unto you? In a word, is there anything that you would have done, either physical or mental, if you had not previously believed? Are not all your exertions of every kind dependent on your faith? Or may we not ask, what have you or what do you possess which you have not obtained by reason of your faith? Your food, your raiment, your lodgings—are they not all by reason of your faith? Reflect, and ask yourselves if these things are not so. Turn your thoughts to your own minds and see if faith is not the moving cause of all action in yourselves, and if it is the moving cause in you, is it not also the moving cause in all other intelligent beings?
It should not be difficult for any entrepreneur to see how applicable these words are to their own experience. Would you have started your business if you had no hope of success? Did you ever say to yourself “I know this isn’t going to work out, and I’ll get nothing from it, but hey, you only live once.”
No, you likely thought you would make a billion dollars, or at a minimum receive a good education from the school of hard knocks. You believed there would be some benefit from the experience to redeem it from merely a waste of time and money. And you then acted upon that belief.
Faith Is Based On Things
Faith must be based on or in something. When I start a business I exercise faith in myself, my employees, the strength of my idea, the market, karma, God, the humanity of man, research, data, stats, the economy, my spouse’s support, my children being quiet during important phone calls, my health, catching the bus on time, clients/customers being honest, the Internet being fast enough, or a host of other factors not entirely within my control.
Faith Is Based On Things That Are True
In the Book of Mormon, a collection of scriptures we Mormons consider to be on par with the Bible, an ancient prophet named Alma said this about faith, “If ye have faith ye hope for things which are not seen, which are true.” (Alma 32:21)
In other words, if you exercise faith that a client will appear out of a blue and write you a check for $10 million, when this has never happened before and is completely improbably, and then it doesn’t happen, the problem isn’t that your faith wasn’t strong enough, it’s that you had faith in something that wasn’t true. In fact, you could say you didn’t have faith at all, or that your faith was vain or incorrect. Ill-placed faith can be downright harmful.
I had a business I sold in 2003. I received restricted stock in a NASDAQ listed firm and once the restriction was lifted I should have been able to sell the stock for around $800,000. In addition, the company that bought my company also made certain promises to take over equipment leases I had personally guaranteed, amongst other commitments. I exercised faith the company buying my company was acting in good faith, and would keep their commitments.
As it turned out, the company had no intention of keeping its commitments, and even if it had it lost the ability to do so. Less than a year later the company was bankrupt, my stock was worthless, and I was left to pay off $15,000 of leases for equipment I didn’t own anymore, but which was being used by the company I had sold my business to. My faith hurt me, because it wasn’t based in something true.
Faith Is Not Knowing Everything
By definition, faith and knowledge in the same thing cannot coexist. If I had a perfect knowledge that my business would be successful I would be starting it based on knowledge, not faith. But since we have perfect knowledge of precious few things in this life, virtually all our actions can be chalked up to faith.
Granted, we may easily confuse faith to be knowledge. I say I know what my company’s revenues will be next month. I know I’m hiring the right VP of Sales. I know if we all work hard as a team that we’ll hit our deadline. We use the word a lot, but you don’t even know if you’ll be alive 15 seconds from now. Most of your actions, if you’re honest with yourself, are based on faith and not having all the facts.
There’s nothing wrong with this, it’s just reality. Where we run into problems is the point where we think we’re acting on knowledge when we’re really acting on faith. This, combined with an excessive amount of optimism, can lead us to make poor decisions and be unprepared to confront all the potential situations.
Great, So Now What?
Acting in faith is good, if our faith is based on something true. Acting in knowledge is more likely to produce the results we want. But since knowledge is difficult to come by, we must balance the time and money required to gain knowledge with the risk of missing out on an opportunity altogether. Many entrepreneurs would do well to spend more time acquiring knowledge and acting less on faith. And yet it is this ability to move forward on faith that is almost a defining characteristic of entrepreneurs. Many others would do well to spend less time acquiring knowledge and act with more faith. Knowing when and where to strike the balance…ah, well, therein lies the mystery.