The Vertically Integrated Entrepreneur

exxon-2Vertical integration describes how involved an organization is within its supply chain. Products are sourced from suppliers at the top of a channel and distributed down through manufacturers, wholesalers, distributors, and retailers where it finally reaches the consumer. ExxonMobil is an example of a vertically integrated company that is actively involved in most areas of its supply chain from sourcing oil deposits, drilling, transporting, refining and distributing it to consumers through corporately-owned retail stations. Doing this gives Exxon more control over the operations at each point of distribution and helps to cut costs.

Being The Guy

Start-up entrepreneurs must also be vertically integrated. They must must develop the marketing strategies, compile financial reports, manage operations, receive phone calls, and develop corporate strategy. They must wear the hats of the CEO, CFO, COO, CMO, and CTO. And when entrepreneurs are not preoccupied by all of these responsibilities then they’re out trying to sell the product. If there is any time in the calendar to spare then it is probably filled pacing the hallway worrying about how you are going to make payroll.

The Blessings of Vertical Integration

Being almost everything within the context of our start-up is not done out of a need for control. It is done out of necessity due to lack of resources. If all entrepreneurs had unlimited resources then there would be no need to wear multiple hats; duties and positions could be outsourced and filled immediately upon incorporation. But there are advantages to being vertically integrated. It helps you develop empathy for future employees who will fill those positions. It gives you a well-rounded understanding of all functions of the business. And it emotionally binds you to the company.

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