41 Entrepreneurship

Entrepreneurship is a salient feature of being in the world, in the flourishing of life. What drives entrepreneurs, and how do they operate? It can hardly be the rational design that economics traditionally prescribed, in the optimal use of given means for given goals. The radical uncertainty of entrepreneurial enterprise, and especially innovation, precludes that. Often one discovers what options for conduct there are only as they emerge from action.

This fits with the summary of the pragmatic perspective, and of being in the world, that I gave in the preceding item in this blog: At any moment we act from ideas, views, normative assumptions and goals that we have, but we adjust them depending on what we encounter in problems and new opportunities.

As a novel label on a new bottle with old wine, in the entrepreneurship literature the fashion now is to call this effectuation.

What drives entrepreneurs to act like this? One proposal has been to use the notion of conatus, the drive of anything that lives to persist in its existence, which goes back far in philosophy and was considered the essence of life and the fundamental nature of the human being by Spinoza, for example. This idea has had wide acceptance in the notion that the primary goal of firms and institutions is to survive.

Nietzsche resisted this, claiming that often people undertake actions that clearly jeopardize their survival, and he proposed that the fundamental drive of beings is will to power. The urge to survive may apply to existing organizations but not so much to entrepreneurs who set up novel ventures.

Another concept that goes back to classical (Greek) philosophy is that of thymos, the will to manifest oneself, to make a mark, to make a difference. This seems related to Nietzsche’s will to power. And indeed this is often found among entrepreneurs as the will to prove that an idea works, or to carry it through to realization, or to make a novel contribution to society, or to exercise their independence of thought and action.

A problem then arises in collaboration. On the one hand especially independent entrepreneurs have to collaborate with others for two reasons. First because they are too small to develop all specialized knowledge and competencies needed. Second, the deeper reason lies in the logic of cognitive distance that I developed earlier, as a source of novelty. On the other hand, the problem then is, as I will discuss in much more detail later in this blog, that in order to realize the potential of such collaboration entrepreneurs have to commit to it with investments that make them dependent on each other. They have to engage in give and take and practise what I will later call the art of trust. And this yields tension with their motivation to pursue their independence of thought and action, and with the pragmatic need to be opportunistic in adapting means and goals to what is encountered along the way.