The Moral Entrepreneur

One man’s experience through an internship with eWired Auctions, LLC.

By Nicholas SalvatorielloAdvised by Prosser Hislope

June 2nd, 2005

The Moral Entrepreneur

Success for Moral Man-A lifetime of proof:

Looking over my life, my parents have served as constant inspiration since they started

my family on how investing in love and happiness can bring unmeasured success.

By running his own orthodontic practice, my father was able to achieve a great deal of

success along with my mother who also worked her own private business. This hard earned

wealth allowed them to invest in a great deal of ventures around our hometown of NH. One of

their great moves was purchasing a Ben & Jerry’s franchise as well as acquiring a small amount

of real estate in our hometown. Though the scoop shop never made much money, my family has

had a great time scooping some of the best ice-cream made by the most interesting people and

giving it away to various school and community functions.

My parents took calculated business risks since the day they were married, putting their

$2000 dollar wedding purse in the bank and keeping track of every penny they spent from their

tiny Boston apartment until they turned it into what I can only describe as a small fortune over

the course of two decades. To this day, my parents have been able to put six children through

college and are prepared to do it for the other five. These two people could have taken the

money they’ve spent on their eleven children and used it to cruise around the world. I even

made that point to my father when I saw him recently and told him about my internship and my

study of moral entrepreneurship. I asked him how he can work day in and day out to earn money

that was going to be spent on someone else? His answer to me was that without the motivation

to provide for his children, without his great love of his family, he and my mom would never

have had close to the success they have now. It has been, he said, a labor of love.

The story of my family is what I believe moral entrepreneurship is all about. Being

motivated by a sincere want for happiness. Can it really be done? Can “goodness” be the

business model and can reciprocal happiness both from buyer and seller alike be the profit? I

believe I can because I’ve read famous minds of the past and spoke with good people of the

present who together form a positive view for the future.

Modern “Power Capitalism” gone wrong:

From my experience with eWired, through my assigned readings and from my research

on major businesses in current events, I have learned that indeed values greatly affect the long-

term fates of businesses. I believe that the success of business in the long run depends on human

nature and how buyers treat the sellers. A number of different issues demonstrate this. The

public’s greater awareness that exploitive labor practices are occurring at very well-known

corporations, that the environment is being treated poorly, and that there as well documented

cases of corruption and bribery at the highest levels of business have brought companies like

Enron and Tyco to their knees.

Of course, companies have historically been making economic value decisions such as

trade or environmental policies, but more and more, as corporations cross cultural borders at

home and abroad, corporate policies create controversy and hurt their image. The media steps in

and can portray corporations as “wrong” and “evil” by showing this lack of morals. Nike and

Kathy Lee’s sweatshops in South East Asia are just a couple of examples.

During the savings and loans scandals over the past two decades, corrupt businessmen

bribed otherwise aboveboard politicians into overlooking their shady business practices and

corruption. The S&L crisis was an example of bad business/government practices and human

nature primed for taking advantage of it. It exemplifies what Hobbes talked about as far as man

always being out for himself. The purpose of government enforcing unethical practices is to

place limitations on human corruptibility. The S&L scandals and the “Keating 5” among whom

Senator John Mc Cain is a member, shows how selfishness will hurt us in the long run. Not even

Senators are immune. Overall, I feel that morality is consistently being compromised in the

pursuit of money and power and businesses who pursue power in the long run lose.

No matter what side is taken in the debate over the social responsibilities of a

corporation, there is another question that arises quite naturally. Would it be more or less

profitable for a corporation to act with social responsibility in mind? Answering this question

could make the initial debate meaningless. If it were profitable to act without an ethical model

then why would firms not choose to do so? In order to answer this question, I have met people

who are member of organizations such as my boss that have looked at socially responsible

business as a way for a company to show its consumers that it is concerned with societal issues,

thus gaining greater sales and producing increased profit.

New light for “Enlightened Capitalism”?

There is more than one way to play the game. There is hope for businesses that seek to

use ethics to draw in clients even if it is in a superficial way. The Moral Entrepreneur will find

success when we understand that the human need to feel important and that they are making a

difference is just as important as their desire for material things. The Moral Entrepreneur must

innovatively sell the values of the culture along with a service. In this way, empowerment

becomes the product and participation is the customer service. The most perfect example of a

modern business achieving this perfect blend is Starbucks.

Starbucks Corporation: Making moral business “trendy”

Starbucks’ growth from a tiny Seattle coffee shop to a trans-national corporation is a

success story built upon creating a business that goes well beyond the product (coffee) but

exudes a life-style and a way of mind that is reflected in their business model. By creating a

whole “feel-good” image around their own (more expensive) brand of coffee, Starbucks has been

instrumental in introducing many consumers to specialty coffee and has helped to create a

coffeehouse culture in North America.

“Our customers’ willingness to pay high prices for our coffee is largely based on

Starbucks promise to deliver exceptional quality. Compromising on quality could erode the

trust our customers have in Starbucks and undermine our business in the long run (6).” Given

their example, one can see that buyers don’t merely come to a seller for a product, they come for

an exceptional experience of participating in the “coffee culture” of America(6).

Starbucks’ high-quality coffee is more expensive to produce than lower-grade coffee. In

2004, Starbucks paid $1.20 per pound on average in an effort to ensure that coffee farmers can

cover their production costs and earn a profit (6). Their approach is not only the right thing to

do for farmers, it’s also essential to the long-term sustainability of quality coffee production and

thus a part of Starbucks success. Therefore, we can see that big business can help others and

thus help themselves. The capitalist model would dictate that Starbucks should do whatever

possible to generate the most profit regardless of “the right thing.” Being able to be the most

competitive (lowest prices) is the “right” capitalist thing to do. However, I would argue that this

ideal of sustaining the quality of their product from bean to mug using (fairly) ethical practices

has allowed them to pay more and still make more.

I asked my cousin, Scott Birchler, who is a long-time employee at a Starbucks in

Fairfield, NJ what he thought about this idea of “culture” having a positive effect on profits for

business.

“I think it is that cultural umbrella of the corporation where people wont feel intimidated to

hang in close niche coffee house. People feel involved in the trendy, intellectual culture when

they attend. It’s definitely inviting in its the colors and music. Go into a McDonalds or Burger

King there colors are purposely ugly and the environment is cold steel, very plastic they want

much turnover.”

I couldn’t agree more. Products are far more then material things, they carry ideas and

opinions along with them. Through my internship as well, I’ve learned culture is very much tied

to a societies values and businesses can harness trends in society and shape their mission around

them. This is exactly what eWired is doing with fundraising. The trends clearly show that

traditional fund-raising isn’t making as much money as it used to. Meanwhile, online selling and

charitable giving through eBay is making millions. It is a wave of the future in “digital feel-

good” We harnessed that trend and infused it into the mission of the business.

The example of Starbuck’s success challenges the traditional idea of the duties of a corporation

which for many would have been for the corporation to maximize their profits. Adan Smith would

probably agree with this answer as well because the more money businesses make at the top, the more

flows down to those at the bottom, bettering the lots of all.

When thinking more about the question though, maximizing profits seems to be an incomplete

answer. Doesn’t a firm also have some sort of a responsibility to its community and society?

I asked my cousin the real questions that I wanted to get to the bottom of in regards to American

socially responsible business trends. I asked, “Is all that stuff just for show? Do companies like

Starbucks REALLY care, or does it just look good to care?

He replied, “The deal is Starbucks has the resources. They have the resources to embark

on all these community events and make themselves look good, regardless if it’s a show or not

they still are doing some good things. You cant fake attending and participating in charity or

donations. It is a good outlet for reaching and helping ones community.”

Who doesn’t like a good guy who helps out his community? This is the ideal we all

would like to strive for and yet it receives often only lip service from some of largest, most

influential corporations in the world.

“I think their charity and high standards are what make them very successful even if they

are show you really cant fake it, plus they are selling one of the only really legal drugs

COFFEE, you should see people that come in if the espresso bar is having problems and they

cant get their drink. Americans have ego-centered, addictive personalities and what better way

to keep them coming back then to serve them addictive substances that they feel good about

paying more for?”-Scott Birchler

Clearly, there are individuals that feel corporations are very influential in society and

communities, thus they should go above and beyond the pursuit of profit to help society. This

view is called Corporate Social Responsibility (CSR). Investment in this type of business

practice is in the billions. Yet, there are others who feel that the responsibility of corporations is

to provide the best products for the lowest prices, consistent with marketwise profit and owe

nothing more than that.

How I became interested in Business at Union:

A little research into the most famous philosophers has revealed contrasting views on

human nature and different models on just what running a “moral” business means. Yet through

it all, there is a common message that humans don’t survive on piles of cash. They don’t eat

their money, they spend it on the things that they need, and I believe that happiness and knowing

you’re making a difference and by doing so, you matter, is a fundamental human need. My aim

in taking on this internship was to study and see if businesses thrive on meeting this need or if it

suffers by not doing so. Once this was surmised, I asked, can we apply the knowledge of ethics,

human nature, and political philosophy to the cold, calculated realm of economics? This is my

challenge. This is the search for the Moral Entrepreneur.

I personally have been interested in business because success, as I understand it, is found

through making money and one needs money to survive and be happy. This was the

understanding I grew up with up to this year with and it guided my choices and plans throughout

my life. Money=Happiness.

So, Do businesses do better when they seek to promote social responsibility, participation and

other ethical rewards rather than power? I hypothesize the answer will be yes for my business, and the

aim of my study is to prove the “Moral Entrepreneur” can succeed even against the traditional

assumptions of capitalism. When I delved into what we really desire as humans and why we should go

into business, the answer went beyond economics and began to venture into the other “responsibilities”

we may have as moral beings. The old conclusions are simple: Humans are self centered and thus the

nature of business is selfish. Therefore, I’ve learned that in order for an ethics-promoting business to

succeed, the client’s self-centeredness must be explored and exposed and then harnessed in a positive

way. Moral business to me could be defined as actions that appear to further a social good, while also

going beyond interests of the firm and the law. It means a firm taking its resources and using them

towards an end that is not of direct benefit to themselves but instead to society or the community. I

believe this is a legitimate possibility for collectively, all businesses profit from helping their community

because they too are members of it.

Joining the eWired Team and studying their mission:

It was with this knowledge that drove me to accept Brian Selchick’s offer to join his

vision and work for his little company. Being a native of Albany, Brian entered Union with a

keen interest and understanding of the Capital Region. From there, he acquired a NYS real

estate salesperson license and began buying and selling real estate. In performing this job, he

assisted several clients in starting a new life, in a new home with a new family. This opened my

eyes to the opportunities that business could offer a moral man. In working with kind, traditional

and well-meaning families, Brian was in his own way of viewing his work, a person who helped

to build neighborhoods, communities through his job. It was a labor of mutual benefit for

customer and employee alike.

After a year at Union, the college announced its interest in Tech Valley (the industrial

region in which Schenectady is a part) as an entity. Taking their cue, Brian began to realize that

he was empowered because he was a local capital region resident. “Something special was (and

is) happening in this area,” Brian told me in an interview. “I wanted to be a part of it.

Normally, everyone knocked this place as the hole of society, but to me, being a lifelong and

hopefully lifetime resident of the area was unable to accept that. I realized that there was a true

opportunity here for an entrepreneur like me, someone who was willing to take on the time

constraints and pressure of working for causes all over the region with little or no compensation

(5).”

eWired Auctions was founded as a localized, professional fundraising company that is

dedicated to serving local non-for-profits. It is a moral business first and foremost because

eWired Auctions is a company that was founded to strengthen the presence and capabilities of

local non-for-profit organizations that serve this region. It was a brand new idea that required

progressive, bold, idealistic clients.

The plan seemed simple at first and the pitch incredibly enticing. “Basically, we make it

so any alum can donate a portion of their eBay auction sale to their college, immediately get a

tax return for it, get thanked for it, and turn their in-kind donation into cash,” Brian told me. I

had not realized just how hard a sell this program would be for Union’s fundraising staff. It had

no past history of success, it depended on an already established structure that was present on the

internet, and it required a tremendous amount of faith on the part of Alumni Relations. Never

the less, working with economics professors, experienced eBay sellers, and fellow student

entrepreneurs (myself), Brian and eWired slowly developed our image, our approach, our

prospective clients, and our values.

“My values absolutely are my business. I created my company because I have values.

Using this new fun, innovative method of fundraising I have been hoping to get people involved

and excited on a grassroots level about serving the local community.” -Brian Selchick.

It is this grassroots involvement and universal empowerment which makes a “people

helping people” business so exciting philosophically when viewed as a new approach to winning

in the game of capitalism. The traditional view of capitalism demands quality products at low

prices. By this definition, any business action which does not contribute to the over all quality of

the product and drives up its price, is not worth it.

One might take this maxim and conclude that businesses that are attempting to be socially

conscious are wasting their money. But the question I had to ask myself is, just what is quality

of a product or service? If a business I’m involved with provides a service that is not only useful

but morally gratifying in some way, I call that an increase in quality over the same service that

does no such thing. Over this term, I have interviewed and interacted with a student

entrepreneur, an employee at a major corporation that publicly practice Corporate Social

Responsibility, and the President of Union University to find out why putting a premium on

“doing the right thing” pays off and why putting the pursuit of profit first causes businesses to

lose in this modern game of “capitalism with a friendly face”.

This is why I chose to take up a job in a business with a “moral vision.” The more I think

about it, it’s really a funny phenomenon for humans to have “jobs.” No other animal on Earth

conducts “business” in the way that we must to survive. It is an art form we have created. It is

artificial and its values are indeed artificial. Since we made them, they can be molded and

changed. Enlightenment thinkers like Adam Smith said, ‘The division of Labour was the

gradual consequence, of a certain principle of propensity in human nature.’ This ‘propensity,

common to all men, and to be found in no other race of animals; is a propensity to truck, barter,

and exchange one thing for another (7).’

For Adam Smith, business is the catalyst for civil society. In addition, capitalism allows

individuals freedom of choice in different business areas such as employment, investment and

purchase which in time form the norms, and ethics of the business game.

In The Wealth of Nations, Smith claims that “Every man thus lives by changing or

becomes in some measure a merchant, and the society itself grows to be what is properly a

commercial society (7).” Our ‘commercial society’, Smith is quick to point out, is based on

selfish interest. He believes that a man who has ‘almost constant occasion for the help of his

brethren’ would be mistaken if he thought their help would come ‘from their benevolence only.’

Everyone is out for themselves, and a successful entrepreneur seeking clients “will be much

more likely to prevail if he can interest their self-love in his favour, and show them that it is for

their own advantage to do for him what he requires of them. Smith then famously concludes, “It

is not from the benevolence of the butcher, the brewer and the baker that we expect our dinner,

but from their regard for their own interest. We address ourselves, not to their humanity, but to

their self love, and never talk to them of our own necessities, but of their own advantages (7).”

In this mode of self-centered capitalism, what unites us is not our humanity or compassion for

one another. Instead we merely use each other to seek our own ends which through Smith’s

“invisible hand” should benefit us all on a profit based level, but certainly not on an ethical level.

Using one another as ‘means’ cannot be called just in my mind. It produces an ‘unsociable

society’ and this is what I mean by immoral business.

Traditional capitalism’s triumph and eWired’s first defeat:

eWired’s model teaches alums to give and still profit. Confident in these advantages,

there really was no doubt in my mind that the intrinsic value of our “moral entrepreneurship”

would be recognized. Empowerment and participation of less wealthy donors however, was not

enough to seal the deal for Union. Apparently, there were different forces of human nature and

business at work.

“My interns and I met with the development officers of the college many times. Each

time they seemed more and more interested in our style of services. However, for some

reason, they were unable to get around the concept of a philanthropic student business

that was intended to serve the college. For them, it was literally, “all about the numbers

(5).”

“I was getting frustrated with going into meetings and having people say ‘give me the

numbers’, well the truth is, is that this business is not about the numbers, its about getting people

involved, its about group participation, its about empowering people to make a difference. . . it

certainly is not about money (5).”

Many proponents of traditional business would look at this situation and state that

perhaps the Moral Entrepreneurs have the odds stacked against them and cannot win in our

capitalist society that follows the “numbers”. I would answer that the odds more often than not

are absolutely stacked against us in a game of capitalism that advocates for profit above all else.

For if a business owner is shrewd, deceptive, and selfish, they may achieve great profit in the

short run. Yet, as the savings and loans scandals, ENRON, and Martha Stewart have shown us,

those who behave dishonestly and selfishly not only bring ruin to their business, but their own

lives.

Meeting the “Moral Executive”:

Two weeks ago, I was lucky enough to sit down with the President of my college, Roger

Hull and ask the head of one of America’s top liberal arts colleges how infusing service to the

community into his own life and the Union educational experience made him one of the most

respected and sought after people in the area.

He was co-founder of Schenectady 2000, creator of the Schenectady Initiative, and has

facilitated over $26 million dollars in projects for the city. Recently, he was named “Executive of

the Year” by the Schenectady Chamber of Commerce. Next year, there will be a street next to

campus named after him.

I approached President Hull because all that I have observed about him suggests that he

found success through sticking to values and recognizing the importance of others through

service to your school and community.

“Service is the way one should do things. We all have an obligation to give back to the

communities of which we are apart” Roger told me in his office one Monday morning. “Make a

difference, do well and do good. These are not mutually exclusive objectives.” He said, “You

have to live by the idea that if you do good, you get good.” And Roger Hull is certainly an

example of an organizational head for whom “doing good” has paid off. Through this work,

Union and Schenectady were able to mutually benefit and these practices can serve as an

encouraging example to follow in the business world.

Certainly it hasn’t always been easy for President Hull through his 15 year tenure with

the college and Schenectady. As one of the longest serving college presidents in the country, I

was curious to learn what made it possible for this “Executive of the year” to stay here with

Union even as Schenectady suffered as a city and some students seemed less than grateful for the

extensive work done here on their behalf over the years. I asked him, Why Schenectady? Why

was it worth it for so long?

Roger answered, “For two reasons, provide stability for my kids” (he is a single father),

“And two, because I felt I could make a contribution. Most presidents make a commitment of a

minimum of 5 years to a school and a maximum of ten. I’m someone who makes the maximum

commitment.” Instantly I could appreciate the motive of providing for those you love as a reason

to do good business and not simply to gain power and advantage over your neighbors. As we

have seen in Roger’s case, character and integrity draw success in their own unique way that is

not tied to selfish advantage.

“It would be nice to have everyone feel grateful for what you do on their behalf,” he told

me, “but that’s not why you do something. You do what you think is right. Disraeli said, ‘if you

do something, two people will feel that you’ve done two much, two people will think that you’ve

done too little, and five people will think that you’ve done the wrong thing.’”

True to these words, President Hull has over the years made service one of the pillars of the

Union experience. Through the Kenney Community Center, more than 60 percent of Union's

students perform volunteer service in the local community and schools.

I asked Roger why in his opinion community service makes better graduates out of Union

students. “Service gives your life meaning. I’ve met some of the richest people in the world and

they’re the unhappiest. Most people say, ‘well first I’ll make some money and I’ll do good

AFTER I make that money.’ You feel good as a result of what you do and the reward is the

opportunity to do more.”

That conversation taught me a valuable lesson: Believe your job matters and have fun

doing it, and others will believe in you too. If I feel good with what I am doing even as an

intern, it is going to shine through and make everybody else I interacted want to be a part of that

same good feeling. Therefore, I have realized how important it is important for any business to

conduct itself in a way that its employees have fun and are genuinely inspired first and foremost.

Whether you’re scooping ice-cream, running a University, or running eWired Auctions. If

one’s business isn’t fulfilling on a personal level, your clients will not feel fulfilled either.

It was this type of belief that brought eWired its biggest success over the year, The

Regional Food Bank. We pitched the regional food bank the services of eWired. They

immediately noticed the inherent value of this type of fundraising method. Before we could

explain the specifics, they wanted to sign a contract. When Brian and I recapped on this great

success, he remarked keenly, “They did this because I have a long standing relationship with

them and as a local resident they trust me to do the right thing.” Again the same themes of

success keep coming up, reciprocal trust, proving good intentions from right actions, seeking and

then serving clientele in a manner consistent with one’s values/morals.

In working with eWired’s clients, I have realized that they love dealing with a local

entrepreneur like Brian who is going to be accountable for his actions. I’m part of a business

that is willing to come to weekly meetings and discuss its client’s progress without necessarily

bringing that corporate attitude to the table. As a local resident and a familiar face, Brian is a

person who brings a certain level of trust and dignity to the impersonality and trans-nationality of

the internet business sphere. In Brian’s words, “We have taken global concepts and made them

local initiatives.”

This change should be led by young, energized Union undergrads who can count on the

support of their school who shares our vision. As I am seeing more and more from my work with

eWired, moral entrepreneurship can start right now at school and it is as challenging to the soul

as it educational and rewarding.

In Conclusion: Some of the most important lessons I took away from this term:

Results: I learned that people want to see results from your idea before they buy into it.

They want to see examples of success. I learned this is very hard to do if you’re trying to get

your first client. Somebody has to be the first to believe in you.

References: People also want references, they want to know that there’s experienced

people who can vouch for your idea. People also want to see websites and other tangible

evidence of your company’s structure.

Uniqueness: People must be convinced of why they cannot take on this job themselves.

People want to know why your business more than anybody on their staff or any of your

competitors has the ability to generate at LEAST more participation but especially revenue for

their organization.

Presentation: Presentation is everything. You must dress, speak, and act like you’re

already running a fortune 500 in order to be taken seriously. You have to really believe in the

idea to get others to believe in it.

Understanding: The internet is a murky, not well trusted place, people need to know “in

plain English” how your company will preserve the delicate integrity of their organization and

their fundraising efforts. A trust must be established. Familiar clients (business connections)

foster this trust the easiest.

Conviction: No matter what business you do, make sure its worth your time.

Great ideas may take months if not years of hard work before you see a substantial return on

your investment of time and energy. More than this, make sure whatever you do, it is rewarding

and that the work motivates you spiritually.

Besides what I’ve learned this term, I’m the most pleased over how every member of this

tiny fledging company had weighed in their time-proven morals and ethical beliefs to bring this

grand experiment to life. My internship, my research, and my wonderful boss and the good faith

of my advisor, Professor Hislope are all a testament to the validity of this extremely enlightening

study. It has helped all of us grow.

“When I came to Union in 2002 I was ready and willing to be shaped by the system, but

as I watched my mother pass in the spring, I realized that there was much more to life than paper

accomplishments – life is about changing the lives of others. Ever since that day I have

contemplated how to do so.

After a long search, I came up with eWired. I thought that if I gave people something

new, something fun, something different that they would want to contribute to all of the causes

that have been begging for their attention over the years.” -Brian Selchick

When I reflect on how fulfilling building a “moral business” can be, I am continually

affirmed in my belief that our values should shape our dreams and business based on caring for

not just their customers, but on the community in which they live will achieve the most success

in the long run.