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Code Of Honor

Principles or profits. Can you have both?

Embedded in any decision between what will soothe your soul and what will boost your profitability exists a moment in which many an ethics-conscious entrepreneur has dwelled. It's the space where, before your principles kick in, all the temptations of avarice beckon.

For Ralph Warner, co-founder and owner of Nolo Press in Berkeley, California, that moment occurred when, on the eve of shipping out his self-help law books, a major tax overhaul was announced, suddenly rendering the books' contents moot. Warner's decision: whether to feign ignorance and send the books out anyway, or scrap the books and start over, at great expense.

"In the short run, sure, it's cheaper to cut corners, to go against your principles," says Warner. "We're all human." And it's our nature to flirt with the prospect of compromising our principles. But then-if you're like Warner, at least-the moment passes and you muster up the strength to back off.

Warner's strength lies in his perspective: This type of decision, he realizes, is not a pain but a privilege of entrepreneurship. In the late '60s, when he worked as a legal aid attorney, Warner wasn't allowed the luxury of making decisions based on his principles. He had to turn away scores of middle-income people who weren't poor enough to qualify for federally funded legal services, yet who were unable to afford private attorneys. Grieved by having to deny a woman seeking a restraining order against her abusive husband, angered by the shortcomings of the legal system, Warner was finally incensed enough to start Nolo Press in 1971. "I saw, frankly, that [turning needy people away] was a crappy thing to do," he says. "And it occurred even to me, someone with no business background, that there must be a market here."

Even then, Warner was adept at mastering the relationship between principles and profits: Profits, clearly, were the means and principles the end. "I thought if you could actually put out a product that people wanted to buy and that could change things," he reasons, "that would be much more powerful than starting a nonprofit [organization] and just lecturing the world."

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This article was originally published in the August 1996 print edition of Entrepreneur with the headline: Code Of Honor.

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