12 Entrepreneurs Describe Ethical Challenges They Faced—And How They Overcame Them

Brett Farmiloe
Thu, 17 Jul 2025 15:52:24 +0000
Ethical-small-businesses, Ethical-marketing, Ethical-use-of-ai, Ethical-challenges, Ethical-dilemmas, Entrepreneurship-decisions, Integrity, Ethics

Ethical challenges are an inevitable part of entrepreneurship, requiring founders to make difficult decisions that can shape the future of their companies. This article explores real ethical dilemmas faced by business owners, offering practical insights and advice on how to maintain your integrity while navigating the complexities of modern business.

1. Uphold Professional Integrity

Ethical Dilemma: "One ethical decision I faced came when a prospective client asked me to revise drafts that had already been sealed by another professional. They wanted modifications without going back to the original engineer or architect. On paper, the project was lucrative and the client was insistent, but I knew accepting the job would violate professional boundaries and potentially put lives at risk if changes weren't vetted properly.

"That is why I declined the work. Not only because it was outside my scope as a drafting provider, but because revising sealed work without coordination undermines the entire chain of professional accountability. This decision cost me the client, but it protected the integrity of my practice."

Best Advice: "Always remember that short-term gains aren't worth the long-term consequences of compromising your standards. If something doesn't feel right, slow down, ask questions, and consider the precedent you're setting. Remember that your company's reputation will outlast any single project and the trust you build through integrity is your most valuable asset."
—Brian Curran, Drafting Services

2. Focus on Long-Term Solutions Versus Immediate Satisfaction

Ethical Dilemma: "We had to make a really tough call early on when we discovered a major competitor was essentially copying our entire approach, down to the marketing messaging and feature set. We had evidence they were using our materials as templates.

"The knee-jerk reaction was to get lawyers involved immediately, send cease and desist letters, and employ the whole aggressive playbook. My co-founder was pushing hard for this route, and honestly, part of me wanted to as well. But I took a step back and thought about what we were actually trying to achieve. Were we building to win some kind of legal battle, or were we trying to solve real problems for people who need better networking tools?

"I decided to focus entirely on execution instead. Rather than spending months and tons of cash on legal fights, we doubled down on product development and customer experience. The competitor might have copied our initial ideas, but they couldn't copy our team's ability to iterate and improve based on actual user feedback.

"It turns out that was the right call—they're still stuck with a version 1.0 mindset while we've moved way beyond where we started. Plus, our customers noticed the difference in quality and support."

Best advice: "Always ask yourself what actually moves your business forward versus what just feels satisfying in the moment. Sometimes the 'tough' ethical choice is actually just the smart business choice with a longer time horizon. Legal action has its place, but usually there's a better path if you're willing to outwork the competition instead of just out-lawyer them. Also, get input from people you trust, but make sure you're not just looking for validation of what you already want to do."
—Haydn Price, V1CE

3. Maintain Core Values Despite Financial Pressures

Ethical Dilemma: "Perhaps the most challenging ethical judgment we faced was a result of a top tradeshow client's pressure to remove negative but fair reviews from their event page. The loss of the client would have had a substantial financial impact, but our determination to stick to transparency did not waver.

"We showed them data that suggested even negative, more authentic reviews actually inspired trust in attendees when they were addressed adequately. We assisted the client in drafting thoughtful responses and taking action steps to address their issues, and in the end, our working relationship survived while we preserved our integrity."

Best Advice: "Ground these decisions in your core values from day one. We enshrined our 'Transparency First' policy into our incorporation documents, which made this decision easier when put to the test. Play out scenarios now, before the crises come, and rely on data to show the long-term value of doing right by your users. Remember, too, that clients worth keeping will respect your principles."
—Joseph Cochrane, Tradefest.io

4. Stay Grounded in Your Mission

Ethical Dilemma: "We were in talks with a large hospital network that would have doubled our revenue, but during the process, I discovered they planned to use our platform to collect patient-reported outcomes without updating their consent policies. Legally, it was defensible under implied consent, but ethically, it didn't sit right. Our company's mission had always been rooted in transparency and patient empowerment, and compromising on that felt like betraying our values.

"After consulting external compliance experts and revisiting our patient advisory board, it became clear that we couldn't move forward. Patients expected clarity and consent. Walking away from the deal was hard. It led to tough conversations with investors and delayed our growth plans. But six months later, we landed a partner who cited our ethical stance as a key reason for choosing us."

Best Advice: "Looking back, that moment defined our company culture. It reinforced that ethical decisions are rarely easy, but they are essential for long-term credibility, especially in healthcare. For any founder in a similar situation, my guidance would be to stay grounded in your mission. Revenue can recover, but broken trust rarely does."
—Riken Shah, OSP Labs

5. Protect Brand Integrity Over Short-Term Gains

Ethical Dilemma: "We were approached by a large supplier offering bulk meat at a significantly lower cost, which would have dramatically improved our margins during a high-growth phase. However, after reviewing the source, it became clear the meat didn't meet our quality or traceability standards. It wasn't unsafe, but it wasn't aligned with our commitment to human-grade, ethically sourced ingredients.

"It was tempting, as cheaper supply meant better short-term profitability while we were managing cash flow and scaling. But I asked myself, if I wouldn't feed this to my pet, how could I expect others to? We walked away from the deal. That decision cost us in the short term but protected our long-term brand integrity and reinforced what our company stands for."

Best Advice: "Have a clear line in the sand. When values are tested, it won't be convenient or easy, but that's when they matter most. Build a brand you can stand behind with pride, even when nobody's watching."
—Omar Malaika, Soluky Pet

6. Implement Guardrails and Adopt a Moral Position

Ethical Dilemma: "One of the ethical decisions I have had to experience as a founder is on the usage of web scraping technologies for content aggregation and republication. Some customers were using our tool to gather and distribute material from creators without giving appropriate credit. This spurred internal discussions on our accountability for the way our technology is applied commercially.

"We developed content recognition tools to handle this problem that can find possible copyright infringement in the data our tool is gathering. Before they can access our web scraping features, our enterprise-level users must now also specifically acknowledge creator rights and licensing requirements in our terms of service."

Best Advice: "You cannot always control every possible application for your technology. On ethical concerns, though, you can be proactive in establishing suitable guardrails and adopting a moral position. This could sometimes mean losing some clients or aggravating your product experience with more friction. But the short-term cost is often worth maintaining the long-term integrity of your business and technology."
—Shuai Guan, Thunderbit

7. Protect Your Name

Ethical Dilemma: "Years ago, a major crypto startup approached us. They needed a development team fast, and the paycheck was huge. But in the vetting process, I realized their real goal wasn't innovation—it was to prop up a token they were quietly offloading. Legal? Barely. Ethical? Not even close.

"I wrestled with it. We were growing Zibtek, and that kind of cash could've covered several hires. But I kept coming back to this: if we help build something designed to mislead people, we're part of the problem. So I said no, and meant it. I told them plainly why we were passing. They didn't like it. But a few months later, the project unraveled, and I was grateful we weren't anywhere near it."

Best Advice: "Founders will hit these moments where values and revenue collide. When that happens, don't overthink the math. Protect your name. You only get one, and in this industry, it carries further than any client ever will."
—Cache Merrill, Zibtek

8. Prioritize Your Company's Integrity

Ethical Dilemma: "There was a time we were deeply involved in a project for a new tech startup. Things were going well, and we were excited about the work. Then, a few weeks into the project, we received a call from a much larger, established company, a direct competitor of our startup client. They wanted to hire us for a significant project, one that would have brought in much more money and prestige.

"The challenging part was that this new offer, while very attractive, felt like a conflict of interest. We had already invested time and effort into the startup's project, and we knew a lot about their strategy and unique selling points. Taking on the competitor's work, even if it was a different kind of project, felt like it could compromise our commitment to the first client, or at least appear that way.

"We ultimately decided to turn down the larger company's offer. It was a difficult decision financially, and it meant letting go of a big opportunity. However, we felt it was the right thing to do to protect our values and our relationship with the startup."

Best Advice: "Always prioritize your existing client relationships and your agency's integrity. Money is important, but a good reputation and trust are far more valuable in the long run."
—Shantanu Pandey, Tenet

9. Don't Be Afraid to Be Honest

Ethnical Dilemma: "When I was just starting to build my company, I had a team with whom we went through the first tough stages—the launch, the first clients, and all the initial phases of growing the business. However, over time, I began to feel that our approaches to work, our visions, and our values were starting to diverge. It was a very difficult period because the emotional connection with those people was strong.

"But I understood that if I wanted the business to grow, I would have to make a tough decision and part ways with some of the team members. It wasn't about resentment, it was about honesty—with myself, with them, and with the future of the company.

Best Advice: "Don't be afraid to be honest, even if it hurts."
—Alexandr Korshykov, DreamX

10. Imagine Your Decision Becoming Tomorrow's Headlines

Ethical Dilemma: "One of the toughest ethical decisions I had to make as a founder came during a partnership opportunity that looked promising on paper. It offered strong distribution and a decent revenue split, but after some due diligence, we discovered the partner had a history of aggressive data collection practices that didn't align with our privacy values.

"Saying no wasn't easy. It meant passing up a short-term growth bump and potentially disappointing our team. But long-term trust with our users mattered more. We approached it with open internal dialogue, laid out the facts, weighed the risks, and ultimately chose integrity over speed."

Best Advice: "When in doubt, imagine your decision becoming tomorrow's headline. If you wouldn't be proud of it being public, reconsider. Ethical clarity often lies not in complex legalese but in basic human principles: transparency, fairness, and respect for those you serve. Ethics aren't a PR strategy; they're the backbone of sustainable growth."
—Jayanti Katariya, Moon Invoice

11. Revenue Should Not Override Responsibility

Ethical Dilemma: "As the founder of a surveillance electronics company, one of the toughest ethical decisions I faced was whether to continue selling a particular covert camera model that was technically legal but raised privacy concerns. We received feedback from a few customers that it could be too easily misused.

"After reviewing potential use cases, consulting legal experts, and reflecting on our company's values, I decided to discontinue the product. It cost us short-term revenue, but it strengthened our brand's integrity and built trust with our customers in the long term."

Best Advice: "Revenue shouldn't override responsibility. In industries where technology can impact privacy or security, always ask not just 'Can we sell this?' but 'Should we?'"
—Edward Shklovsky, Zetronix

12. Would You Proudly Display Your Decision on the Front Door?

Ethical Dilemma: "When we first opened our private healthcare practice, one of the toughest ethical decisions we faced was how much care to offer complimentarily to individuals who clearly needed support but couldn't afford it. As a founder, you carry both the responsibility to serve your community and the financial burden of keeping the doors open. There were moments when we were deeply moved by a patient's story—the pull to provide free care was strong. But as we looked at our rent, payroll, and supply costs, we realized that giving too much away, too often, could put the entire business—and all the employees—at risk.

"I remembered a piece of advice from a supervisor early in my career as a CPA: 'Never do or say something that you would not be proud to have posted on the front door of your company.' That principle became a compass. I asked myself: would I be proud of this decision if my staff, patients, and community all knew about it?

"Ultimately, I created a structured policy: we offered a limited number of complimentary exams per month through a quiet, needs-based process. This allowed us to give generously—but sustainably. It also gave my team a consistent and fair framework to follow."

Best Advice: "Generosity must be paired with wisdom. Build systems that reflect your values, not just your emotions in the moment. And when you're in doubt, ask yourself if your decision is one you'd proudly display on the front door. If it is, you're likely on the right path."
—Alaina King, King Family Eye Care, LLC

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About the Author
Post by:
Brett Farmiloe

Brett Farmiloe is the founder and CEO of Featured, a platform where business leaders can answer questions related to their expertise and get published in articles featuring their insights.

Company: Featured
Website: www.featured.com