Saras Sarasvathy Explains the Entrepreneurial Method
Question: What method do entrepreneurs use?
Saras Sarasvathy: I presented the entrepreneurial worldview fully born, if you will. But in actual fact I had to understand that by looking at what entrepreneurs actually do in a micro level, if you will. So in my research, I talked to a whole bunch of, you could call them successful entrepreneurs, but success was only a part of their story. I call them expert entrepreneurs. These are people who had several years of founding experience, of multiple firms, often success and failures and they had learned to perform well overtime. So they had taken at least one company public so of course people see them as successful entrepreneurs. And, when you study how they think and I gave them a 17-page problem set of typical start-of-decisions that all entrepreneurs have to make in starting a company. So I got to see at the micro level the kinds of things that they do. Not just the whole world view of how they think but how they implement that world view in their practical day to day business problem solving if you will and I found the CDs of things that they do and I wrote about five of these, the five principles in my book but I suspect there are more. And I think, as I teach and I look at more histories of entrepreneurs and I talk to them I think there will be more. So I don’t want to talk about this, that there are only five principles, but I can give you some examples.
So, one of the things I always talk about to my students is about cooking. Now, I say there are at least two ways of cooking. One is to start with a dish that you want to make and when you have a great recipe, go get the ingredients and then you make the dish. The other way, the way most of us cook I think, is we stumble into the kitchen, open the refrigerator and find stuff and if you come into my house you would find brown powder that you might have to smell to know what it is because I’m making it in food. And so, you kind of look at what you have and then you try to make something with it. The interesting question here is what difference does it make whether you cook using a recipe and proper ingredients or whether you stumble into the kitchen and cook something. It depends on how good a cook you are, what you end up cooking. So, you can get away from the basic ideas that you need to understand about running a business, so you still need to know how to manage your cash flow and things like that; but, when you just stumble into the kitchen and cook, what happens is, assuming you know how to cook and you’re a good cook, you are much more likely to come up with a new dish that even you might not have actually planned to make. Whereas if you are cooking from a recipe would get that dish, right? You wouldn’t get some of the new dish and that’s the interesting part of it.
So it’s not really a question of this is better than that, it is just that the way entrepreneurs do it, they work with what they have and they look around and say, “What can I do with this?” And then, “What else can I do with it?” So it goes back to the idea of doing the doable and then pushing it. So they just look around at the resources that are available to them and by resources I don’t even mean money. A lot of the entrepreneurs I study started with things like who I am, what I know and whom I know. So they are looking at what kind of a person am I, what kinds of things turn me on, what kind of things that I just will not do because it goes against my values. So, they have a sense of self. They know what they know and very often they are very good at knowing what they don’t know. So they look at what they know and don’t know and they look at the people that they know and they start talking to the people almost immediately and they bring them on board very early on. So they work with what they have to create something new. So that’s a technique and there are lots of techniques connected with that that we can learn and teach. It’s very useful in the classroom.
The second thing that they are very good at doing is to think through in deciding what to do with what you have. They are not really thinking about where will I get the biggest bang from the buck, which one is likely to lead me to the most profit? Instead they constantly asked themselves, “Would I do this even if I know I’m going to lose what I am investing in it?” Which is a very different criterion financially speaking for example and I call that the “affordable loss criterion”. And, a great example of that is there are people who have good jobs, right? It pays 100,000 to 200,000 a year who leave and start a company. Now, the standard gut reaction is to say, “Oh, my God.” They are, you know, entrepreneurs are risk takers. They are just risk grabbing, you know. They like jumping off buildings or whatever. But in actual fact when you look at how a lot of these entrepreneurs make decisions, especially the experienced ones, they are not really saying, “You know what, I’m making 200,000 today but I believe if I do this, I will make 20 million and therefore you know, I’m just going to invest everything I have.” That’s not the way they think about it at all. They think, “You know what, this looks like an interesting thing to do. I think I would enjoy doing it. I always wanted to do this kind of thing. So I think I can put 50,000 into it and six months of my life. What is the worst that will happen? Maybe, you know, I have left the job and I’m back on the job market and maybe I don’t make 200,000, I make a 150,000. But, if I don’t do it now, when will I ever do it? I always wanted to be my own boss. I always wanted to build a heart monitor because my dad died of a heart, or whatever that thing is that is moving that makes, it comes from who they are and what they know and whom they know. It’s very close to what they already have on hand. So that’s kind of the second thing.
And the third and most important thing is that they work with people and they work with people in a very interesting way. They don’t go and say, you know, here is something I want to build. You know, Gadget G and this Gadget G is going to change the world so who do I need to bring on broad then I go and sell this and I’m so good, I’m so charismatic. I’m such a good salesperson. I bring people on board. No, no, no. What they really do is they are very good at getting you to tell them, you know, what would you want to do with Gadget G? They allow you to change their vision of Gadget G if you are willing to put skin in the game. So they build this network of stakeholders who actually put stake in the ground and each of them invest only what they can afford to lose. So the affordable lost works with this stakeholder thing in a very interesting way. So what happens is, since each person is putting real skin in the game and they are deciding what to put in based on something they care about so much that they are willing to lose.
So the affordable loss does two things: on the one hand if you fail, it keeps failures really small. Something I talked about earlier. But on the other hand it gives you a different way to evaluate an opportunity. A different way that does not depend entirely only profits, that you would do this for some reason, some reason that you have even if you lose the money you would do it whatever that motivation may be. It could be something as simple as I can’t stand my boss, as much as I want to. It could be something as simple as that or it could be very lofty saying that, you know, I really wanted to help women back home and I want to do this venture because it would help them and it’s okay in the process I try and fail. So the motivation can be anything but the logic is kind of the same in each case.
Recorded on: May 19, 2009
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The way you speak might reveal a lot about you, such as your willingness to engage in casual sex.
- A new study finds a deeper voice is associated with self-reported extraversion, dominance, and casual sex.
- It was the first study on the topic to objectively measure voice pitch.
- The authors suggest that hormones like testosterone might explain their findings.
We make snap decisions about other people based on information that we can gather quickly. One of the many ways that we do this is by making bold conclusions about other people's personalities based on their voices alone. Various studies demonstrate that people associate a deep voice with dominance, but those with higher pitched voices are perceived as nervous or neurotic. Popular culture seems to agree with and reinforce these stereotypes.
Are these perceptions accurate? Maybe. A new study by an international team of researchers with the goal of more accurately determining what our voices reveal about us has demonstrated that there is some connection between how we sound and who we think we are.
The voice-personality connection
Lead author Dr. Julia Stern of the University of Göttingen explained:
"Even if we just hear someone's voice without any visual clues — for instance on the phone — we know pretty soon whether we're talking to a man, a woman, a child, or an older person. We can pick up on whether the person sounds interested, friendly, sad, nervous, or whether they have an attractive voice. We also start to make assumptions about trust and dominance. The first step was to investigate whether voices are, indeed, related to people's personality."
The study included data from 2,000 people from four countries involved in eleven previous independent studies focused on other questions. Each of these studies involved some kind of self-reporting of personality traits and vocal recordings. The recordings were analyzed with Praat, software that determined the frequencies of the participants' speaking voices.
The study is the largest ever conducted on the topic and the first to use an objective measure of pitch rather than subjective rankings such as "high pitched" or "deep." Each participant's vocal pitch was then compared to the self-reported personality data they provided.
The findings associated self-reported levels of dominant tendencies, extroversion, and increased interest in and acceptance of sociosexuality (casual sex or sex outside of a relationship) with a lower pitched voice. This was true for men and women of any age. The findings were in line with the previous, less robust studies on the subject.
Other stereotypes, like if a higher pitched voice hints at neuroticism, openness to new experiences, or agreeableness, were impossible to determine with the data at hand.
Voice isn't everything
It should be remembered that the personality traits that this study associates with vocal pitch are self-reported, so there are some serious limitations. For instance, it is entirely possible that vocal pitch is associated with thinking you're extroverted when you actually aren't. Furthermore, all four countries in the study are WEIRD, so the findings probably cannot be universalized.
Additionally, there are plenty of examples of people for whom the voice-personality link doesn't apply. For example, Teddy Roosevelt, an extremely extroverted, dominating man, had a fairly high pitched voice.
The authors do speculate that there could be a connection between testosterone levels in men, their vocal pitch, and their perceived level of dominance that would be supported by previous studies. However, they have no hypothesis explaining why that same relationship exists for women.
The authors suggest that further studies in this area could focus on finding a possible physical connection between these traits and vocal pitch and to determine if they hold for traits which are not self-reported.
Who needs steroids when you have the placebo effect?
- A study suggests that the effectiveness of sports drinks may depend in part on their color.
- Runners who rinsed with a pink liquid ran better than those who consumed the same but colorless drink.
- Improvement in their performance is likely due to a placebo effect.
The "placebo effect" is real. It's the name for a strange phenomenon that most notably occurs during clinical trials. People who are given an inactive substance, like a sugar pill, often experience the same therapeutic benefit as those who are given actual medicine. It's not their imagination — it really happens. (Even better, recent research suggests that therapeutic benefits occur even when the person knows that they were given a placebo.)
Now, a new study from the University of Westminster (UOW) Centre for Nutraceuticals in London and published in Frontiers in Nutrition suggests that the placebo effect may explain yet another phenomenon: Athletic performance.
The research showed that treadmill runners who rinsed their mouths with a pink liquid increased their performance over runners who swished with exactly the same liquid but without the coloring. Why pink? The color is generally linked to sweetness, and the researchers wondered if that association would subconsciously trick the runners into an expectation of more carbohydrates and thus energy.
Author Sanjoy Deb explains:
"The influence of color on athletic performance has received interest previously, from its effect on a sportsperson's kit to its impact on testosterone and muscular power. Similarly, the role of color in gastronomy has received widespread interest, with research published on how visual cues or color can affect subsequent flavor perception when eating and drinking."
Running for science
Credit: Ryan De Hamer / Unsplash
For the study, the researchers recruited ten healthy adults — six men, four women. All were regular exercisers, with an average age of 30. The participants were told that they would be testing the relative benefits of two commercial sports drinks after watching a brief video explaining the value of such beverages. Previous research found that mid-exercise rinsing with such drinks can reduce the perceived intensity of exercise.
The drinks consisted of 0.12 grams of sucralose dissolved in 500 mL of plain water — an artificially sweetened rinse low in calories. The liquids contained no other additives common to sports drinks such as caffeine. The pink version had non-caloric coloring added but was otherwise identical.
After a 12-minute warmup phase of jogging followed by running, the athletes ran at a difficult pace for 30 minutes, rinsing with their drinks as they ran. Following a brief cool-down, they were interviewed to capture their impressions of the exercise session. (Each runner tested both drinks.)
The researchers found that when the volunteers used the pink rinse, they ran an average of 212 meters farther and 4.4 percent faster. They also enjoyed the exercise more.
Deb said, "The findings from our study combine the art of gastronomy with performance nutrition, as adding a pink colorant to an artificially sweetened solution not only enhanced the perception of sweetness, but also enhanced feelings of pleasure, self-selected running speed, and distance covered during a run."
The researchers also plan to dig deeper into the phenomenon by investigating the possibility that the pinkness of the beverage is somehow directly activating the brain's reward areas.
Welcome to the world's newest motorsport: manned multicopter races that exceed speeds of 100 mph.
- Airspeeder is a company that aims to put on high-speed races featuring electric flying vehicles.
- The so-called Speeders are able to fly at speeds of up to 120 mph.
- The motorsport aims to help advance the electric vertical take-off and landing (eVTOL) sector, which could usher in the age of air taxis.
Airspeeder, the world's newest motorsport, is set to debut its first race in 2021.
What can you expect to see? Something like a mix between Red Bull's air racing and the pod-racing scenes from "Star Wars: The Phantom Menace" — manned electric cars flying close together in the desert at 120 mph, nose-diving off cliffs, and racing over lakes, all while hopefully avoiding collisions.
Airspeeder calls its vehicles flying electric cars, but it's probably easier to think of the wheelless multicopters as car-sized drones. Powered by electric batteries, the carbon-fiber craft use eight propellers to fly, and the tiltable motors are designed to allow pilots to navigate through the course's pylons at high speeds.
To prevent crashes, Airspeeder is working with the companies Acronis and Teknov8 to develop "high-speed collision avoidance" systems for its Speeders.
"As they compete, Speeders will utilise cutting-edge LiDAR and Machine Vision technology to ensure close but safe racing, with defined and digitally governed no-fly areas surrounding spectators and officials," Airspeeder wrote in a blog post.
Beyond motorsports, Airspeeder hopes to help advance the electric vertical take-off and landing (eVTOL) sector. This sector is where companies like Uber, Hyundai, and Airbus are working to develop air taxis, which could someday take the ridesharing industry into the skies. By 2040, the autonomous urban aircraft industry could be worth $1.5 trillion, according to a 2019 report from Morgan Stanley.
Still, many technical and regulatory hurdles remain. Matt Pearson, Airspeeder's founder and CEO, thinks the futuristic motorsport will help to not only speed up that process, but also pave the way for self-driving cars.
"Even with autonomous vehicles on the ground, it's a difficult thing to get right because computers have to make decisions very fast," Airspeeder's founder and CEO, Matt Pearson, told GQ." But in a racing environment, you have a pretty controlled course and you have the ability to make all the vehicles cooperate with each other. You have a whole load of vehicles talking to each other, so if there's an incident or a pilot slows down or there's a traffic jam on the course they're all aware of each other. This is something we think will revolutionise autonomous vehicles on the ground. It's technology that will make flying cars a reality in our cities in the future."
Airspeeder has yet to announce a date for the first race, but Pearson said he hopes to put on three races over the first season. The company is developing two courses: one in California's Mojave Desert, and one near Coober Pedy in South Australia.
Like autism, ADHD lies on a spectrum, and some children should not be treated.
- ADHD is an extremely contentious disorder in terms of diagnosis and treatment.
- A research team examined 334 studies on ADHD published between 1979 and 2020.
- The team concluded that ADHD is being overdiagnosed and overtreated in children with milder symptoms.
Attention deficit hyperactivity disorder (ADHD) has long been a controversial topic. While the term "mental restlessness" dates back to 1798, English pediatrician George Still described the disorder in front of the Royal College of Physicians of London in 1902. The condition is attributed to both nature and nurture, with a recent study suggesting the disorder is 75 percent genetic.
According to DSM-IV criteria, ADHD affects five to seven percent of children; but according to ICD-10, only between one and two percent are afflicted. Global estimates state that nearly 85 million people suffer from ADHD, which, like autism, exists on a spectrum.
Treatment is perhaps the most contentious issue. While a holistic approach includes counseling, lifestyle changes, and medication, due to insurance requirements and other factors, many children only receive the latter. And now a new systematic scoping review published in the journal JAMA Network Open that investigated 334 studies conducted between 1979 and 2020 found that ADHD is being both overdiagnosed and overtreated in children and adolescents.
ADHD: An epidemic of overdiagnosis
Researchers from the University of Sydney and the Institute for Evidence-Based Healthcare in Australia initially retrieved 12,267 relevant studies before using a set of criteria that whittled the list down to 334. Only five studies critically investigated the costs and benefits of treating milder cases of ADHD, prompting the team to focus on knowledge gaps in side effects.
The team writes that public scrutiny has increased along with the increase in diagnoses. The numbers are startling: between 1997 and 2016, the number of children reported to be suffering from ADHD doubled. While the symptoms of ADHD include fidgeting, inattention, and impulsivity, Dr. Stephen Hinshaw compared this disorder to depression, as neither condition has "unequivocal biological markers." He continues, "It's probably not a true epidemic of ADHD. It might be an epidemic of diagnosing it."
The Australian researchers write that ambiguous or mild symptoms might contribute to diagnostic inflation and the subsequent rise in the prevalence of ADHD. They compare this to cancer, a field that has established protocols for overdiagnosis. ADHD is still understudied in this regard.
Photo: fizkes / Adobe Stock
Overdiagnosis is harmful
This has contributed to an increase in potential harm, not just to children's health (such as the long-term pharmacological impact on developing brains) but to parents' finances. As of 2018, ADHD is a $16.4 billion global industry, with continued revenue growth predicted — ensured by future ADHD diagnoses.
The costs and benefits of ADHD treatment are mixed. The authors write:
"We found evidence of benefits for academic outcomes, injuries, hospital admissions, criminal behavior, and quality of life. In addition, harmful outcomes were evident for heart rate and cardiovascular events, growth and weight, risk for psychosis and tics, and stimulant misuse or poisoning."
For most of these studies, the benefits outweighed the risks in children suffering from more severe ADHD. But this is not true for children with milder symptoms.
Across the studies, the team noticed that four themes emerged. The first two were positive, and the second two were negative:
- For some people, an ADHD diagnosis was shown to create a sense of empowerment because a biological explanation provided a sense of legitimacy.
- Feelings of empowerment enabled help-seeking behavior.
- For others, a biomedical explanation led to disempowerment because it served as an excuse and provided a way to shirk responsibility.
- An ADHD diagnosis was linked to stigmatization and social isolation.
The unfortunate reality is that ADHD is a real condition that should be treated in some children. But for many, the harm of treatment outweighs the benefits.
Stay in touch with Derek on Twitter and Facebook. His most recent book is "Hero's Dose: The Case For Psychedelics in Ritual and Therapy."