The formation of groups is one of the oldest human endeavors. The history of mankind includes a number of civilizations, but no single civilization could have existed without its founders and leaders. Nowadays, when developed countries choose democracy, this political system seems to enable a group of people to create something worthwhile on their own. But after a more thorough evaluation, it becomes apparent that no single group has achieved considerable success unless that success was purposefully and persistently pursued by the leader of the group. The modern kingdom of corporations, brands, and corporate management creates an illusion that some kind of collective intelligence is responsible for building a successful enterprise. But the fact remains that behind every tremendous success is a talented leader who is loyal to his ideals. Mankind admires this kind of person and remembers his or her name. However, for some strange reason, people try to imitate the external demonstration of success while ignoring its very basis. They focus on the what, but give too little consideration to the why.

Two Types of Business Owners

In coming to understand the true role of a business owner, it is important to be aware of the two most common types of owners. The ancient works of Indian literature known as the Vedas help give us a way to describe them. Vedic religious traditions, including various characters and philosophic concepts, became a part of such religious and philosophical systems as Brahmanism, Hinduism, Jainism, and Buddhism, all of which were based on the Vedas. The Vedas are a source of socioeconomic and cultural information about ancient Indian history.

According to the Vedas, every person achieves his own level of spiritual development and has the traits and abilities inherent to someone at that level. Ancient Indians called these social levels varnas. The Vedas maintained that during his lifetime a person progresses up the levels while forming and developing particular personality characteristics. A person on the highest stage of spiritual personality development is called a Brahmin. Scientists, artists, and religious figures fall into this category. The stage below Brahmin is called Kshatriya. Kings, military commanders, leaders, and all people who devote their lives to service achieve this stage. Then there is the Vaishya stage, mostly represented by merchants and craftsmen. Those at the Vaishya stage can create groups as well, but due to their particular traits, they are fundamentally different from the Kshatriya. The Kshatriya serve their own group and have the group’s benefit as their main goal. In contrast, someone at the Vaishya stage needs a group to achieve his own personal success and enrichment. I am not claiming that this classification is very scientific, but it seems to be an apt way to assess different types of leadership. If you study various companies carefully, you will find that particular aspirations and traits inherent to the Kshatriya and the Vaishya are dominant in certain business owners.

A group’s achievements depend on its leader. And it is quite valuable to know that any group has a much greater chance of becoming successful if a Kshatriya is the leader, rather than a Vaishya. In contemporary terms, it can be said that a group whose leader does not have a genuine desire to ensure the prosperity of the entire group will never be truly successful. This is not based on conjecture, but on empirical evidence.

In Shanghai, I met the founder, owner, and manager (all one individual) of the B&Y Marketing Agency. At the time, B&Y employed twenty-five people who produced wonderful TV commercials and outdoor advertisements, in addition to designing shopping malls. For the previous few years, the company had stalled out and its yearly revenues had remained at about $1.5 million. I was interested in the discrepancy between the company’s high-quality products and its lack of growth, given China’s rapid economic development. During my conversation with the owner, I found that his main motive when starting the company was to provide an affluent lifestyle for himself and his family. This business owner was a perfect example of a highly qualified professional Vaishya who was trying to surround himself with assistants just to produce a quality product and enrich himself. It quickly became apparent to me that unless he changed his viewpoint about the way to run his business, his company would never advance.

In 1995, my friends and I started the MacCenter Company in Ukraine. We specialized in selling and servicing Apple computers, and for several years I was the CEO and chairman of the board of directors. Even though the company was relatively small, it was highly professional. Now when I look back, I see that the main reason I founded the company was my personal desire to have a well-paid job that I liked doing.

Like many other enterprises, our company started from nothing. We renovated the office ourselves, tried to get our hands on some affordable office equipment, and had to come up with various schemes to get our first orders. For the first few months, we had to take part-time jobs as security guards because we did not have enough money to pay our staff. We even took turns spending nights at the office, cleaning it, and working as chauffeurs, couriers and porters. At the time, we were not even an authorized Apple reseller and service provider. But we were able to buy a shipment of Macintosh computers from an authorized dealer and, functioning as an intermediary, resell them to another authorized dealer. Our profit from the transactions consisted of two computers, which represented the main “capital” of our company. When we became authorized resellers, our first customers included some Western organizations like Motorola, the U.S. Peace Corps, and USAID, which were just opening offices in Ukraine. We were selling computers to offices and publishing houses, and by the end of our first year, we were the number one reseller in Ukraine. This was the height of our success. We were able to hire a sufficient number of personnel, and we had loyal customers and stable revenues. This was a time when the market was increasing steadily and the opportunities were almost limitless.

However, at the time the company was founded, my partners and I had the motives of a Vaishya—each of us was thinking of increasing personal wealth. That is why, upon achieving some success, the company stopped growing. At the time, I did not realize why that had happened. After operating for three years, I noticed that our competitors had surpassed us, and that it was important for us to expand. But in all of my attempts to reform the company, I encountered resistance from my cofounders. My partners held key executive positions, and as they were satisfied with the company's current level of performance, I was unable to pass my ideas on to them. Neither the other company owners nor I actually understood our functions, nor the tools for growth that were at our disposal. Eventually, after my attempts to turn the situation around were defeated, I left the company. I departed with my chin held high and made a promise to myself: There is no way in hell I will ever have business partners again. In that moment, I had not yet realized that it was my own incompetence that was the reason for my failure. One could say that the inner, adventurous Kshatriya had awakened in me, but my own incompetence had led me to defeat.

Since then, I’ve had many conversations with various company owners and have come to the conclusion that only a small number of them start out as Kshatriyas. Modern culture, at best, aims to raise obedient and hardworking executors, rather than develop leaders. Characteristically, a leader is fanatically loyal to his goals and persistent in their achievement. In his book, Grinding It Out: The Making of McDonald’s,1 Ray Kroc wrote:

Press On: Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.

Yet when children are raised in a civilized society, the first thing they learn is to follow the rules. While doing so may make children socially comfortable, it also often suppresses their leadership traits. A child wants to play, but he is forced to go to bed; he wants to get on top of the dresser and jump onto the bed, but his parents don’t encourage such acrobatics. Of course, you should not let your children do whatever they want whenever they want—after all, your job is to keep them from harm. But keep in mind that all the behavioral rules imposed by the society, while nurturing, also tend to destroy leadership abilities.