The essence of entrepreneurship

Introduction

In keeping with the standard connotation of the term, Wikipedia defines entrepreneurship as the “process of identifying and starting a business venture, sourcing and organizing the required resources and taking both the risks and rewards associated with the venture.” We are all familiar with stories of successful entrepreneurs; indeed, how can we not be – magazines and books are filled with anecdotes and case studies of entrepreneurial folks whose example we are urged to follow…the inventors of a certain search engine being particularly favoured role models.

Yet, after we are done digesting the rhetoric of gurus and ghostwriters, we seem to be none the wiser. The stories, as entertaining as they are, fail to capture the essence of entrepreneurship.

There is a good reason for this: entrepreneurship is not a process as Wikipedia (and books/gurus) would have us believe. Rather it is about developing sensitivities towards anomalies or disharmonies in our day-to-day lives and then attempting to do something about them.  This post, which is based on portions of a brilliant book entitled, Disclosing New Worlds, is an attempt to elaborate on this point. The book is written by an unusual set of authors including a philosopher and an entrepreneur, so it is not surprising that it offers a completely fresh perspective of the topic.

Before I dive into it, a few words about how this article is organized: I begin with some background material that is necessary in order to understand the main arguments in the book. Despite my best efforts, this section is rather long and somewhat involved (I’d appreciate any feedback and/or suggestions for improvement). Following that, I present the authors’ critique of conventional views of entrepreneurship and discuss why they are inadequate.  I then (finally!) get to the main topic: a discussion of the essence of entrepreneurship, illustrating some of the key points through a concrete, though somewhat unusual example.

Background: Heidegger, rationalism and postmodernism

The central thesis of the book is based on the philosophy of Martin Heidegger, in particular his thoughts on how we perceive, encounter and deal with the world. For this reason, I will spend some time discussing Heidegger’s philosophy as it pertains to the discussion of entrepreneurship presented in the book.

The best way to understand to Heidegger’s perspective is to contrast it with the two dominant worldviews of our times: the  scientific-rational (or Cartesian) worldview that forms the basis of scientific thinking and the postmodern view which emphasizes the role of human choice and radical change.  I elaborate on the differences between the Heideggerean worldview on the one hand and Cartesianism and postmodernism on the other. I focus mainly on the Cartesian worldview as it is by far the more dominant one of the two, and will discuss postmodernism only briefly towards the end of this section.

A Cartesian observer perceives the world as being comprised of things and processes that can be observed and analysed in an objective manner.  To be sure, the importance of such a mode of thinking cannot be overstated; it is after all what makes science and technology possible.  However, and this is a key point, such a view does not come naturally to humans. As Heidegger noted, our actual day-to-day interactions with the world are not objective: we see tables, desks or computers not as objects to be analysed, but as things to be used in a natural way – i.e. without conscious thought. Heidegger coined the term ready-to-hand to denote this non-objective, natural way in which we deal with the world.

Heidegger claimed that we encounter things in the world primarily as being ready-to-hand rather than as objects in their own right. We take an objective attitude towards them only when they breakdown – i.e. when they stop functioning as we expect them to. For example, I become consciously aware of my computer as a computer only when it starts to malfunction.  In other words, it is only when the computer stops being ready-to-hand that I see it as an object to be examined in its own right. When it is functioning correctly, however, it is simply a tool that I use without conscious awareness that it is a computer. It is in this sense that the rational-scientific way of viewing the world is not a natural one. Indeed, the rational-scientific mode of thinking completely misses this natural way in which we encounter the world.

Although the foregoing might sound a bit “out there”, it is important to note that Heidegger’s philosophy is primarily practical for it deals with the day-to-day aspects of life. Indeed, our daily lives consist of a number of relatively self-contained worlds: home, work, friends – each with their own set of practices, i.e. things that we do within them in a natural way. A key Heideggerean concept in this connection is that of a disclosive space – which is a set of interrelated practices and ready-to-hand objects that define a particular aspect of our lives. For example, a disclosive space for a writer might include his or her equipment (computer, desk etc.) and practices (writing habits, rituals etc) that he or she may follow when writing.

I’ll use the example of writers to illustrate another important point. Different writers may have different ways of working – each of these define different disclosive spaces although all writers engage in essentially the same activity (i.e. that of writing). The differences between similar disclosive spaces amount to differences in what Heidegger called style.  Different writers have different working styles (not to be confused with their writing styles) as do different scientists, bakers, or even IT managers.   A style is the way in which our practices within a disclosive space hang together as a whole – that is, it is the way in which we perform our tasks at work or when writing, doing science, baking or even when managing people, projects and processes.  This is pretty much in line with the way in which we use the word “style” when we say, “that is (or is not) my style” or simply, “that’s (not) me.”

Another important aspect of Heideggerian thought is the notion of authenticity (see this article for a very readable discussion of authenticity in online interactions). According to Heidegger, being authentic means to act in a way that is true to oneself. This amounts to acting in a way that is consistent with what one really thinks or believes. Among other things, being authentic implies a deep awareness of who one is and what one stands for.  Indeed, authenticity (or the lack of it) is reflected in one’s style (Reminder: style is what defines differences between similar disclosive spaces). Authenticity is inconsistent with a rational scientific worldview because it necessarily implies that one acts in an engaged and involved way – the polar opposite of the detached, dispassionate attitude that is valued by rationalism.

From the foregoing, it should be clear that Heidegger emphasizes the “involvedness” with which we engage in our day to day activities, at least, when we are immersed in what we are doing. It is impossible to be objective when one is totally involved with what one is doing. This is completely antithetical to the scientific rational view in which we are supposed to maintain a detached, dispassionate view of the world.

An important corollary of the above is that the scientific-rational view sees the world in an ahistorical (or non-historical) way – i.e. one does not consider one’s actions as being part of an ongoing story.  Such an attitude can only result in partial knowledge, for to know things as they really are, one must understand their antecedents. Consider, for example, our current attitude to natural resources:  we see them as objects being available for uncontrolled exploitation rather than as non-renewable products of a (historical) process of evolution that ought to be used in a sustainable way.  Such a mindset is common to most rational-scientific thinking – history and social consequences are considered to be sideshows that have at best a peripheral relevance to the matter at hand. The dangers of such thinking are becoming increasingly apparent.

The postmodern worldview is at the other end of the spectrum from the rational one. Postmodernism originally developed as a challenge to commonly accepted worldviews such as the scientific-rational one as well as those rooted in cultural traditions.   Postmodernism tells us that the scientific worldview does not have universal applicability, and that other modes of thinking (humanism, religion) may be more appropriate in certain domains. Apart from choice, the notion of radical change is central to postmodernism.  So, although it is opposed to the rational worldview, it shares with a lack of due consideration of history because it advocates a discontinuous break with the past.

Before going on, it is worth summarizing the key messages of this section. In contrast to the Cartesian and postmodern views, Heidegger tells us that we experience the world (and its contents) in a ready-to-hand manner; that is, we encounter them not as objects to be analysed (as the rational view would have us believe) or to be interpreted as we please (as the postmodernists tell us), but as natural aspects of our day-to-day world.  Heidegger emphasized that our identities arise largely from the way we encounter and deal with these aspects of our lives. Different people deal with the same situation in different ways – and each of these ways constitutes a style.  As we shall see later, entrepreneurship is a certain style of encountering the world. However, before doing so, let us look at some conventional interpretations of entrepreneurship and see why they are deeply mistaken.

Conventional treatments of entrepreneurship

The authors critique the three major mainstream strands of thought on entrepreneurship:

1. The theoretical approach
2. The empirical approach
3. The virtue-based (or devotional) approach

The theoretical approach is championed by writers such as Peter Drucker, who seek to build theoretical models of entrepreneurship. As he wrote in his classic, Innovation and Entrepreneurship, “Every practice rests on theory.”  It is easy to see that this claim is mistake by noting that there are many everyday practices that do not rest on theory – riding a bicycle for example.  In the case of entrepreneurship the gap between practice and theory is even wider because there is no well-defined process for entrepreneurship. In his book, Drucker claimed that entrepreneurship can be boiled down to a purposeful search for the “symptoms that indicate opportunities for innovation” and to “know and apply the principles of successful innovation” to these opportunities.

The problem with this viewpoint is that the “symptoms that indicate opportunities” are never obvious. At this very instant there are likely to be many such “symptoms” that we cannot see simply because they are not attuned to them. Some of these might be picked up people who are sensitive to such anomalies…and a small fraction of those who sense these anomalies might care enough to develop a concrete vision to do something about them. This is not a process in the usual sense of the word; it is a deeply personal journey that even the entrepreneur who experiences it would have difficulty articulating.

The empirical viewpoint is championed by those who believe that the “skill” of entrepreneurship is best learnt by studying examples of successful entrepreneurs. This approach consists of analysing a wide variety of case studies through which one develops an understanding of “different types” of entrepreneurship.  Indeed, the whole point of case-study based learning is that it is supposed to be a substitute for real world experience – a sort of short-cut to wisdom. The flaw with this logic is easy to see – reading detailed biographies of, say, Barack Obama or Stephen Hawking will not help one internalize the qualities that make a successful politician or physicist.

The virtue-based approach takes the view that successful entrepreneurs have certain qualities or virtues that makes them sensitive to potential entrepreneurial opportunities. George Gilder, a proponent of this view, suggests that the virtues of the successful entrepreneur are giving (philanthropy), humility and commitment. The problem with this view is again easy to see: there are many non-entrepreneurs who have these virtues and, perhaps more important, there are a great many entrepreneurs who have none of them. Nevertheless, the virtue-based approach is possibly closer to the mark it highlights the importance of second order practices – that is, practices that change the way we look at the world. Indeed, as we shall see next, entrepreneurship is a second-order practice.

History making – the essence of entrepreneurship

The concept of a disclosive space discussed above is the key to understanding what entrepreneurship is. As a reminder, a disclosive space is a set of interrelated practices and objects that define a certain aspect of our lives – for example, our driving a car, gardening etc.

When we act within a disclosive space, we are in effect disclosing (or, making apparent) an aspect of our lives.  These disclosures are usually unsurprising because we act in customary or expected ways. For example, when we see someone driving or gardening, we have a pretty good idea of what they are doing without having to be told what they are up to. Their actions more or less explain themselves because they correspond to normal or well accepted ways in which humans act.  However it is important to note that even though the practices are seen as normal, it doesn’t mean that they cannot be changed or improved – it is only that most of us do not see any scope for improvement.

This brings us to the crux of the argument: an entrepreneur is someone who sees scope for changing customary practices in a novel way. Moreover, since such changes completely transform the style of a disclosive space, in effect they disclose new worlds. Put another way, an entrepreneur is someone who sees anomalies in our customary ways of disclosing. He or she then holds on to those anomalies and attempts to fix or transform them by making changes in customary practices. Indeed, this is precisely what that much overused, overhyped and misunderstood term, innovation, is all about. Quoting from the book:

The kind of thinking that leads to innovation requires an openness to anomalies in life. It requires an interest in holding on to these anomalies in one’s daily life and in seeing clearly how the anomalies look under different conditions. If people do this in an enterprise….then they cannot see their lives and the …space in which they work as being settled…If one is living in the natural settled way of doing things then things happen as they should.  The unordinary will appear unnatural and monstrous, not a truth worthy of preservation or [more important] a focus for reorganizing one’s life.

It should also be clear, now, that an entrepreneur must have a good sense of history – to understand what changes he or she wants to bring about and why, an entrepreneur must have a deep understanding of the current situation and its antecedents.  Moreover, since such a person transforms established practices, in a more or less radical fashion, he or she is actually making history.

The book describes different ways in which historical disclosing can occur. These have applicability not only to entrepreneurship but also in the social and political sphere. However, for reasons of space I will not go into this. Instead, I will close this article with an example that illustrates the points I have made about entrepreneurship.

An example

In the early 1900s, a clerk at a patent office in Bern wrote a number of landmark papers that transformed physics and our understanding of the world. Indeed, Albert Einstein is a perfect example of entrepreneurship in action.  I will focus on just one of his contributions to physics – the special theory of relativity – and show how the way in which he arrived at this theory embodies the points I have made in the previous section (Note: I’ve glossed over some technical details below; the discussion is involved enough as it is!) :

1. The pre-Einsteinian worldview was based on classical mechanics, which came out of the work of Newton and others. When Einstein proposed his theory of special relativity, classical mechanics had been around for more than 200 years, and had been successfully used to solve many scientific and engineering problems.
2. One of the consequences of classical mechanics is that the speed of any object depends on the state of motion of the person who is observing it. An example will help make this cryptic statement clearer:  two trains travelling at the same speed in the same direction are motionless with respect to each other – i.e. to an observer located on one of the trains, the other train will appear to be motionless. However, an observer located on the ground will see both trains as moving.
3. The work of James Clerk Maxwell on electromagnetic theory in the late 1800s predicted that the speed of light in a vacuum is a constant – approx. 300,000 km/sec.  Experiments showed that the speed of light turned out to be this value regardless of the state of motion of the observer.
4. There is a contradiction between (2) and (3), for if Maxwell’s theory is to be consistent with classical mechanics, the speed of light ought to depend on the speed of the observer. However, although many experiments were devised to detect such a dependence, none was ever found.
5. Einstein realized that either Newton or Maxwell had to be wrong. He held on to this anomaly for a long time, pondering the best way to resolve it. He finally surmised (for reasons I won’t go into here) that the fault lay with classical mechanics rather than Maxwell’s electromagnetic theory. Very simply, he made the bold guess that classical mechanics is wrong at speeds close to that of light.  In effect, Einstein resolved the anomaly by “fixing up” classical mechanics in such a way as to make it consistent with electromagnetic theory. The special theory of relativity is basically the resolution of this anomaly.  Indeed, most major scientific advances are made through the resolution of such anomalies.

In brief, then, the special theory of relativity:

• Resolved a key anomaly of late 19^th century physics in a completely novel way.
• Disclosed a new world – literally!

In developing the theory, Einstein displayed a unique style of doing physics – for example, since it is impossible to travel at speeds close to that of light, he devised thought experiments to work out the consequences of travelling at such speeds. He also displayed a deep sense of the history of the problem that he was working on: without a thorough understanding of the work of Newton, Maxwell and others, it would have been impossible for him to develop his theory.

In short, Einstein is the quintessential entrepreneur because he made history by disclosing a new world.

Conclusion

Entrepreneurs are those who care deeply about anomalies and have the ability to hold on to and think about them over extended periods of time. In doing so they sometimes resolve the anomalies that worry them, and are then recognized as entrepreneurs. However, there are many who struggle without success, and they are no less entrepreneurial than those who succeed. Such people, whether successful or not, necessarily possess a deep sense of the history of the problem they attempt to address. Indeed, this is must be so, for in resolving the anomaly they care about, they write another chapter of that history.