Leigh Buchanan recently wrote a piece for Inc. Magazine titled, “How Entrepreneurs Think,” exploring a recent study on entrepreneurial psychology by Saras Sarasvathy, a professor at the University of Virginia’s Darden School of Business. (HT)
Sarasvathy likes to compare expert entrepreneurs to Iron Chefs: at their best when presented with an assortment of motley ingredients and challenged to whip up whatever dish expediency and imagination suggest. Corporate leaders, by contrast, decide they are going to make Swedish meatballs. They then proceed to shop, measure, mix, and cook Swedish meatballs in the most efficient, cost-effective manner possible.
But this doesn’t mean that entrepreneurs are wandering aimlessly through life. Their approach is simply not static. Like an Iron Chef, they are highly mobile and highly adaptable.
The distinction here, according to Buchanan, is as follows:
That is not to say entrepreneurs don’t have goals, only that those goals are broad and — like luggage — may shift during flight. Rather than meticulously segment customers according to potential return, they itch to get to market as quickly and cheaply as possible, a principle Sarasvathy calls affordable loss. Repeatedly, the entrepreneurs in her study expressed impatience with anything that smacked of extensive planning, particularly traditional market research. (Inc.’s own research backs this up. One survey of Inc. 500 CEOs found that 60 percent had not written business plans before launching their companies. Just 12 percent had done market research.)
…Sarasvathy explains that entrepreneurs’ aversion to market research is symptomatic of a larger lesson they have learned: They do not believe in prediction of any kind. “If you give them data that has to do with the future, they just dismiss it,” she says. “They don’t believe the future is predictable…or they don’t want to be in a space that is very predictable.”
Jim Manzi, in his commentary on the article, points out that one must make another distinction between risk and uncertainty, with risk being somewhat quantifiable and uncertainty more open to the wind.
As Manzi explains:
Entrepreneurs choose to operate in sectors in which uncertainty dominates. This is inherent to what entrepreneurship is. The kind of predictive tools that work well for the U.S. aluminum market don’t work very well when you’re inventing the Software-as-a-Service business model. What works better is trial and error learning or, more formally, experimentation. As an entrepreneur, you throw yourself into an evolutionary competition, and use whatever resources you have to succeed. You don’t believe that you (or anybody else) can predict the multi-step game in advance.
What can we learn from this as Christians?
In many ways, God has called each of us to an entrepreneurial pursuit. Although there will be mid-game moments of security and peace, our natural disposition leaves us in constant tension with goals that are fundamentally supernatural and spiritual. The spiritual life certainly has its “rules,” but the way the game is executed on the ground (i.e. on earth) is highly unpredictable and relies on in-the-moment discernment, very similar to the effectual reasoning of entrepreneurs.
As Buchanan explains:
Brilliant improvisers, the entrepreneurs don’t start out with concrete goals. Instead, they constantly assess how to use their personal strengths and whatever resources they have at hand to develop goals on the fly, while creatively reacting to contingencies.
When we speak of Christians as “improvisers,” we must be careful. In this comparison, any “improvisation” by Christians must be spirit-led and spirit-driven. It is only “improvisational” in an earthly sense, not in a superrational one. It is not “on the fly” or impulsive in real terms, but from an earthly perspective, it may very well feel that way.
A successful earthly execution of the Gospel, for example, often depends on God’s view of love and humanity rather than our own. Making the right decisions on where we work, who we partner with, and what we invest in often requires in-the-moment wisdom and discernment. Our eventual decision can only be “Christian” to the extent by which we ground our entrepreneurial activities in God’s ultimate will. The truth is absolute, but it takes quite a bit of trial and error to get there.
What we can learn from the entrepreneur, therefore, is that a life filled with risk and uncertainty may appear to be a scrambling, shifting, random, and (sometimes) failing struggle, but it is only through such a struggle – as argued by Hayek, Knight, and North – that we will reach long-term order.
Come on, church. Let’s get entrepreneurial.