Entrepreneurship: An Academic Discipline Built on Radical Mysteries

Ahh... the elusive hero, the entrepreneur. The risk loving, adventure seeking maverick that attempts to change the world as we know it and get rich in the process. So how do they do it? How can we teach someone to do it? And, how do we know that what is being done deserves to be called entrepreneurship, and not merely product development, or corporate venture capital, or some other stodgy process? Creative Destruction, Disruptive Innovation, Radical Innovation... Oh Myyyy! What does an entrepreneur do, exactly? Depending on who you ask, they do one of these three things: Creative Disruption. One of the foundational concepts of modern economics is that of creative destruction. https://en.wikipedia.org/wiki/Joseph_Schumpeter Joe Schumpeter argued, in 1934, that the ordinary, humdrum, non-innovative economy is circular flow that produces very little improvement, year over year. In the circular flow, people do the same routines as last year. They might drop routines that cease to work; or, through experience, they may tweak a routine to be more efficient and effective. They may learn their job over time, and become more masterful at it. But we're talking about middle ages Feudalism here : progress at a snail's pace, and as many setbacks as triumphs in a given cycle. Disruptive Innovation. Behold, the entrepreneur. The sanctified individual who partially "destroys" the old way of doing things and replaces it with a new way of doing things. While the popular buzzword of the century has been disruptive innovation, due to Clay Christiansen's https://en.wikipedia.org/wiki/Clayton_M._Christensen reign at Harvard University, we used to just call it creative destruction. Of course, there are differences. Disruptive innovation is all about innovating on the low end of the market - the shallow end of the pool, for the peasantry of the industry, or for some fringe group that is overlooked. Now, this low end innovation slowly overtakes the old one in terms of overall performance. For example, the personal computer slowly overtook the mainframe computer, MP3s overtook the original CD codex (which was initially a higher quality product), etc. The stodgy old businessfolk cannot see the coming change because at first the technology is inferior in the general market to what it replaces. For another example, consider 3D printing. Originally called rapid prototyping, these printers would build flimsy models so people can visualize an invention before it is produced. Indeed, even in the year 2017, most engineers still refer to 3D printing as rapid prototyping. But it is now a multi-billion dollar technology for producing final goods. This, of course, fits with Clay's disruptive innovation concept. So really, an entrepreneur, in this model, will typically 1) fill a gap that no current business will fill 2) will pursue a new technology while its value is still doubted 3) will identify, and then service, an underserved market segment until the technology matures to the point that it can service a broader market, and displace the old technology. In essence, Clay defines a frequently used sequence of events that results in radical innovations. Radical /Replicative Innovation. Whoa, wait a second. Who said that all entrepreneurs produce radical innovations? What about those who are really good at arbitrage? How about taking a good idea and replicating it in some other place, or replicating only the good parts of it and beating the competitor? Also, are all entrepreneurs technology oriented- can they innovate in some other way, such as a better organizational approach, or a better value proposition? Traditionally, economic minded experts like William Baumol https://en.wikipedia.org/wiki/William_Baumol argued that the replicative entrepreneur can be taught, but the radically innovative entrepreneur is a unique animal in every historical instance, and as such, radical insight cannot be taught. Indeed, other giants of the field like Barney https://en.wikipedia.org/wiki/Jay_Barney and David Audretch https://en.wikipedia.org/wiki/David_B._Audretsch agree that entrepreneurial foresight probably is a real thing but cannot be systematized; and, that a huge factor is luck - being in the right place at the right time. In essence, entrepreneurship scholars discourage individuals from attempting to become radical innovators, because of the severe unlikelihood of it, while encouraging their students at universities to be replicative, and perhaps follow some sort of "lean" startup process.

But Wait: What if Foresight for Radical Innovation can be Taught?

The biggest problem here is disentangling what it is the entrepreneur does - then we can talk about how to do it. in order to talk about entrepreneurial foresight, one must first talk about what it is they foresee. I find the circular flow metaphor useful enough for this casual conversation... What is circular about the circular flow? How do we divert this flow through a new enterprise?

Demand in the Present World vs. in a Future World: The Power of Science Fiction

The radical entrepreneur needs to listen to science fantasy and fiction. Either in casual conversation or in fully written form, people's dreams about future world provide evidence of demand for radical innovations. The radical entrepreneur looks for areas in which the present routines are not making people happy. Dissatisfaction (Necessity) being the mother of invention, the wise entrepreneur will seek out places where incremental innovation has hit some sort of brick wall. People don't want a slightly better widget - they want a completely different approach. Now, the fictional technologies are usually not feasible, but they are imagined solutions to a real problem. As such, any technology that imitates the ideal fictional technology is going to be exciting. By knowing what people want, entrepreneurs can look for intermediate fascimiles of it. Worlds Without Tedious Work. For example, bureaucrats in the early 20th century weren't truly satisfied with slightly better filing systems. People wanted radically better filing systems. They wanted, even though they didn't yet understand how to make, spreadsheets that would be saved and continuously updated. They wanted instant sending and receiving of documents long distance, but didn't know it was email. They wanted collaborative environments for simultaneous workflows, etc. People easily dreamed of not having to do tedious aspects of their jobs, and getting more work done in a day. In essence, nobody ever went broke by making the tedious work less tedious. And as a consequence of this, there are always people dreaming of future worlds without tedium, and machines which take care of tedium. Worlds That Empower New (hopefully safe) Thrills and Extensions of the Human Experience. If you look at emerging consumer trends in 2017, https://www.youtube.com/watch?v=h3KncurLfEQ you will notice that almost all of them involve seeking out the very limits of creative sensual experiences: extreme tourism, exotic food, collaborative retail experiences that don't feel like buying/selling, etc. Science Fiction has long been the depository of dreams of the cutting edge of experience. Indeed, transhumanists, singularists, etc. are the trendsetters in leaving behind the limitations of body and mind. They want to manipulate objects internal and external to the body. The Ghost in the Shell features plenty of examples of transhuman experience that we have yet to fulfill. It is likely that the 21st century is going to be the century of intentionally hacking one's own body and mind to create limitless possibilities of experience. Radical entrepreneurs KNOW this and hang around places where people are inventing stepping stone technologies, looking for the best of the speculative ideas.

Rather than get more specific about the future worlds, let us move on to the other stuff that entrepreneurs "must" do to be radically successful.

Technology Hotbeds: Circling the Circling Vultures

Where do entrepreneurs find emerging technologies? Obviously, they find them in places where inventors are breaking new research ground, but established authorities lack the creativity to understand how to apply it. Once the entrepreneur has a good idea of the kinds of things people want to see invented in the future, they look for technologies that might pull it off. Who Wants to Buy a Self-Replicator? Nobody, until they know that it is the simplest way to cobble together a personal factory. Adrien Bowyer knew that self replicating machines were a radical dream, and possibly essential to a future free of tedious work. If machines could self-replicate, then we could create the illusion of a perpetual motion society that required no tedious work. But what Bowyer needed to discover was an interim, low cost approach to partial self-replication. And, he found out that the only important patent he had to fight was the nozzle on existing rapid prototyping machines... so, he created an entirely new architecture for the machines, and developed his own open source extrusion nozzle for melting plastic like a hot glue gun does. Behold the 3D desktop printer. Bowyer decided that a 3D printer which could make at least half of its own parts could result in the bootstrapping of millions of small, low cost factories. So he purposely developed http://reprap.org/ as an open project to create such a machine. He and his friends created three viable separate models circa 2006-2008 Darwin, Mendel, and Mendel-Prusa. Once he displayed his proof of concept, dozens of ambitious engineers tried to create/market their own improvable hobby machines. By 2010, we had a new industry born with the launch of the Makerbot 3D printer. [Note: This author has a hunch that the reprap project will become the most important contemporary dataset for understanding radical innovation. I have done some study of it, and it reinforces everything I am saying in this article. ] The Makerbot team hung around Adrien Bowyer, the inventor. Bre Pettis and co. were three commercial vultures who circled the inventor vultures. Bowyer picked the bones of the rapid prototypers to make a self replicator. Pettis picked the bones of the self replicator to make a personal scale "factory for the people", just as Steve Jobs picked the bones of the Xerox Corporation to make a personal scale "computer for the people".

Institutional Access, Institutional Disdain. The key to this story is that Bowyer was an engineering professor at University of Bath, and he had access to ALL necessary technology through his personal social network of engineering and tinkering friends. Furthermore, Pettis was a hardware hacker in New York City makerspace labs who loved and worked with expensive rapid prototyping machines. Bre was only a few ideas short of manufacturing his own "little" prototyping machine for people who weren't able to go to a makerspace lab. Few other people had the combined assets of Bre and Bowyer, both necessary to attempt a commercial prototyping machine; and, given the uncertainty of its value, few private companies would consider developing a self-replicating machine for the pure sake of it. But most of the great inventions of modern times were indeed invented for the pure sake of it, before financial consideration. The entrepreneur's job is to commercialize the pure concept somehow, after it exists! And, often, the commercial version is built on loftier principles- often, the inventor disdains the current circular flow and the current institutions that manage it. Ironically, radical inventors rely on repurposing existing ideas and technologies to intentionally subvert themselves. Indeed, creative destruction is more than a metaphor: it is a hidden motivation of the inventor. The entrepreneur's job is to make subversion feel safe (not snake oil), acceptably functional, (minimum viable product) and inevitable (everyone will soon have it, folks, so you should get in on this new thing early). Community Building: The Essential Lead User Population

The third and final goal of a radical entrepreneur is to appeal to a new community of rabidly loyal, emotionally irrational, geeky individuals. If none exists, they have to create it. Everyone knows the story of the Homebrew Computing Club, the first hotbed of the personal computer industry. This club was a "who's who" of genius hobbyists in California who sought to make their own computers. Almost everyone in attendance was brilliant, had a bone to pick with society, and wanted a hand in contributing to the personal computer revolution over the next decade. The radical entrepreneur needs to sell to the curators of such communities. They need big time endorsements. They need to know what everyone else is thinking and buying and trying. They need to be sure that there is a feasible way to get money from these misfit lead users. So, the radical entrepreneur will, whenever possible, exploit budding communities like this, and then offer them what they are looking for: a halfway solution that everyone can get their hands on and attempt to improve, as a creative community. Then, of course, the commercial entrepreneur needs to rapidly take note of every good idea in the community and discard every bad one. Indeed, according to world wide web inventor https://en.wikipedia.org/wiki/Tim_Berners-Lee Tim Berners-Lee (re: his 1999 book), Marc Andressen used this approach to create the Netscape (Mosaic) web browser - he trolled every known world wide web techie and early user, and filtered out the good and bad ideas BEFORE launching his product. He knew what he was making when he made it- the only issue was making sure his version was the first best version. According to Berners-Lee, Andressen won the race because he was the only one actively and objectively filtering out good and bad ideas in real time while he developed his version. All others attempting to develop the quintessential web browser were working in a vacuum, either in tiny university enclaves, or secretively and arrogantly throwing money at farfetched ideas strange to the community that already existed. Knowing what the elite users want is critical to adoption, and more important than getting the ordinary user's ideas right at the start. The ordinary user comes later. Thus, a radical entrepreneur immediately involves the best minds in the world ... and then typically runs away with the money and the patent by selling out to any big fish investor they can find (nd of course, there are only a few ideal people in ideal places for that sort of investment process- and the radical entrepreneur finds out about those investors as rapidly as possible!).

Why This Matters

In short, there is a TON of information about exactly how Steve Jobs/ Steve Wozniak operated, or Tim Berners-Lee/ Marc Andressen , or Adrien Bowyer / Bre Pettis, or Gottleib Daimler / Wilhelm Maybach (auto industry). Ralph Baer, for example, invented the video game console while he was a lead engineer at a military contractor. https://en.wikipedia.org/wiki/Ralph_H._Baer The connection: little green dots on radar screens. He knew that kids loved those little blips, and that they would appreciate a game made from them. Behold- Pong, a game envisioned by turning radar blips into a household pastime. He invented his "Brown box" console in the 60s, and it took almost 8 years for Magnavox to pick up the idea and market it as the Magnavox Odyssey. (Atari was initially focused on placing game machines in bars and arcades, and Baer actually was hired away to design the original Atari console !) After studying all of these industries, I can assure you that there are common practices among radical entrepreneurs, and I find it appalling that none of the "great" business minds can elaborate these basic truths. Furthermore, the combined wisdom of startup gurus SHOULD spell this out, but often it does not. this is because the startup gurus are so focused on HOW TO COMMERCIALIZE that they forget HOW TO BUILD FORESIGHT OF GOOD IDEAS. Most startup gurus teach you how to not screw up your company, but they cannot teach you how to come up with a good company. I contend that we can do better, and that the economy could really benefit from it.

Obviously, if we want to increase the amount of game changing ideas, we need to teach how to develop game changing ideas. And, in my experience, it isn't that hard to teach. The hard part is finding THE RIGHT PEOPLE TO TEACH. The rarest part of radical entrepreneurship is the talent/drive to see it through. This stuff is really hard, even when made systematic... most people simply don't have the right stuff to launch a radical idea. And, it requires putting yourself into the right place and time on purpose, which involves dedicating your life to being well-connected to technology, futurism, and to communities of creators and curators of new ideas. Only some people have the chops to do ALL of that just in case they might be able to pull of a radical innovation.... and teaching too many people radical innovation concepts will only result in wasted resources and brain drain. So.... the best kept secret in entrepreneurship: the GLASS CEILING of radical entrepreneurship is as high as the glass ceiling for being a top exec of a fortune 500 company. But teaching geniuses should be the easy part.