What do Sir John Templeton, Henry Ford, Sam Walton, and Steve Jobs have in common? A desire to improve the lives of others.
by Lauren Templeton, principal of Lauren Templeton Capital Management, LLC
Here is a simple question: what if the large majority of people engaged in commerce, business, and investment are taking the wrong approach right out of the gate? We can all recognize that many people are motivated to act on the basis of “getting” something. That something people try to “get” can range from the material to the emotive, i.e., from a new car to the admiration of peers. Ludwig Von Mises explained it well in his book Human Action, in our opinion, when he stated that the cause of human action is owed to a feeling of unease.
Acting man is eager to substitute a more satisfactory state of affairs for a less satisfactory. His mind imagines conditions which suit him better, and his action aims at bringing about this desired state. The incentive that impels a man to act is always some uneasiness.
Therefore, this relative unease in a person may help explain, why they do, what they do, i.e., the means and the ends. The specific why’s and what’s depend on the individual and what they assign the highest values to in their life. With that said, most people toil in the hopes of getting that one thing, or even the several things that will calm their own personal state of unease. Some are successful, some are not, and many who are driven solely to get money may discover the irony that it eludes them the most. The reason for this is simple. The individuals who are most successful in the free-market system are those who best address and calm the unease in their fellow man, not themselves.
In sum, the individual focused on giving rather than getting is the one most likely to create value for others. For this individual it is seeing the value they create for others that represents the reward, although great material wealth often coincides with success in addressing the needs of others in the market economy.
Taken in this light, entrepreneurs and innovative businesses are expressions of generosity. Entrepreneurs give the full breadth of their minds, skills, hours, and talents to the market in the hopes of delivering a good or service that is better than the present experience of their customer. Entrepreneurs pool all the resources they can discover in themselves and coordinate the talent they see in partners to address the needs of someone they probably do not know or have even met.
This discussion is easily surmised by a piece of advice a young John Templeton received from his parents when discussing how to start a business, “find a need, and fill it.” This later prompted him to deliver wealth to the masses as a pioneer in both global investing and the mutual fund industry. Here are some other examples:
- Henry Ford set out to manufacture an automobile that every man could afford, and was not only successful in meeting this need, but also forever changed manufacturing processes.
- Sam Walton’s goal was to lower the cost of living for Americans, and thereby increase their standard of living.
- Steve Jobs connected humanity through personal computing that was easy, intuitive, and broadly universal.
Even a brief review of these entrepreneurs (and many others) and their biographical information quickly reveals a pattern of pouring all of their talents, or giving themselves over to a singular goal of improving the lives of others.
We feel that one of the most important observations we can share is that each of the entrepreneurs described above (and countless others) introduced a new idea, product, or service that improved the lives of their end user. In each instance the entrepreneur takes a group of people and leaves them better off than they found them, often raising their productivity. This is the basis of progress for human beings. When we find large collections of people engaged in this behavior, an entire society will likely progress. Conversely, when not enough people are engaged in this behavior, progress may stagnate. This is, in our view, the simplest explanation for the dramatic increase in the standard of living experienced across the United States during the twentieth century.
This originally appeared as an investment letter written in early 2013.