Saras Sarasvathy Looks at the World Through Entrepreneurial Glasses
Question: How do entrepreneurs see the world?
Saras Sarasvathy: This is a large part of my research, looking at this notion of what does it mean to think entrepreneurially about a problem, to reason about a problem entrepreneurially and then most importantly to act entrepreneurially. So one of the first things about being entrepreneurial is being action oriented, that you’re actually willing to, as I call, “Do the doable”. So you don’t wait for the perfect solution, so you’re always working on version one point something because you’ve only jumped into version one, 1.0 and that may not be the perfect thing but you kind of always do the doable and then push it, and then push it. So that’s, in terms of action, that’s one of the things that entrepreneurs do and that is that they Do. And then if you start thinking about what they do, right? Then you start beginning to understand a little bit about what does it mean to be entrepreneurial. So one of the things that entrepreneurs are really good at doing, as I told you, especially the experienced ones, is to do things in a way that it is not going to involve huge, investment outlay.
Try to understand how the entrepreneurial worldview is different from other worldviews. Not necessarily from any non-entrepreneurial but say how is it different from scientific or the religious world view or maybe a sociological ethos or all these different ways that we could have of looking at the world. The fundamental thing about the entrepreneurial worldview is that you see a role for human action. For example, when you look at “Where does the future come from?” A lot of entrepreneurs, even if they may not state it in so many words, they behave as though the future comes from what you and I do, that what human beings do matters. So, they do not come from, say, some kind of inevitable trend, you know. There’s nothing that is deterministically or even probabilistically written that this is how it is going to go but whether it is in terms of a new technology, whether it is in terms of where we are headed as human beings, you know, whether it has to do with economic development or the social development of a human being. You take any problem the entrepreneurial world view would suggest that what we do matters and that what we do can make a difference. It may not be all that matters but it’s the first thing in a way that matters, that if you do not do something then nothing will happen. It’s something they understand very, very well. So, if you try something, you know, you may or may not succeed but if you do not try something, I can give you a guarantee, it ain’t going to succeed, right? So it’s that kind of a reverse view of success if you will. A lot of us wait and we think, if I think I could succeed at that I would try it. An entrepreneur just simply says, here is a problem I kind of know the first step would work if I take it and it looks like I can do it, so let me do it and then push it rather than, because what I do will make a difference to the odds. So I don’t try to calculate all the odds first.
Question: Can you give us an example?
Saras Sarasvathy: Here I would like to give you the example of Muhammad Yunus who started Grameen Bank in Bangladesh. People praised him as some kind of heroic visionary and actually he is, my hero in some ways. But, I also study early stage entrepreneurship and how a lot of entrepreneurs who have built these very successful enduring organizations, how they think and some of the things you find early on suggest that it was not really the vision that drove them to do. They were looking at something much smaller. In fact, when Muhammad Yunus visited Darden, he actually said this, he said, “When I was an economist, I thought big. I could see the big picture. I could see the sequence of events and how things would unfold and I had these general theories of the world and about human behavior. Now, I’m an entrepreneur. I have the worm’s eye view. I see very few things, very little things but I see them very, very clearly.” And, a lot of entrepreneurs are like that. So they see a little problem that is actually fixable and they fix it and then that opens up new avenues, perhaps new problems.
In Muhammad Yunus’ case he came across this village that was devastated and people had lost their livelihoods and he finds something, I think he mentioned something like 45 people who required a total of 27 dollars worth of capital. Well, he had 27 dollars, he gave it. So that’s the first step but that’s not, the key thing is not just that you and I might have given it too out of just empathy if you will or sympathy but he went the next step. He started asking if this is so easily fixable, why isn’t it fixed already in a big way. So that, the next step is the pushing, so he goes to a bank and he actually ask them, “Why don’t’ you lend this people money? These are really paltry sums.” And then they tell him that these people are un-bankable. They are poor. And then he pushes that and he pushes that so if you listen to the story, it’s that first step that you do the doable and then you push and you believe that the pushing is going to make a difference even though you may not have any guarantee that it will. I think that is the essence of the entrepreneurial worldview.
If you do not think entrepreneurially, it doesn’t mean that you’re not going to make any difference in the world. So I want to say it’s not entrepreneurial versus non- entrepreneurial. You could be a scientist and you could say that people are dying of small pox and what I really want to do is to solve that problem. And that problem obviously is not a question of giving somebody $27 and pushing. Maybe, you do need to spend years studying it and working on it. So, I want to make it very clear that I do not think of the world as entrepreneurial versus non-entrepreneurial but the essence of the entrepreneurial world view is this, “Believe that what we do makes a difference and that we can push it and that you keep doing the doable and keep pushing it and you work with a whole bunch of people and get them to work with you in interesting ways, in creative ways and all kinds of good things will happen down the road.” So that’s the entrepreneurial worldview.
Recorded on: May 19, 2009
The professor explains how entrepreneurs are action-oriented.
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How Nobel Prize winner physicist Lev Landau ranked the best physics minds of his generation.
Rank 0.5 – Albert Einstein<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQ0NDY3NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzNjI2NTU4OH0.FtBYC7oJz-ZOiiGC9y0Z50_JvQChmp-ONa3jhR3SuLA/img.jpg?width=980" id="d6f66" class="rm-shortcode" data-rm-shortcode-id="61288810a4f035ec2af8957fad4e9015" data-rm-shortcode-name="rebelmouse-image" />
Albert Einstein With Displaced Children From Concentration Camps. 1949.
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Rank 1<p>The group in this class of the smartest physicists included the top minds that developed the theories of quantum mechanics.</p><p><a href="http://en.wikipedia.org/wiki/Werner_Heisenberg" target="_blank">Werner Heisenberg</a> (1901 - 1976) - a German theoretical physicist, who's achieved pop-culture fame by being the name of Walter White's alter ego in <em>Breaking Bad</em>. He is known for the Heiseinberg Uncertainty Principle and his 1932 Nobel Prize award flatly states it was for nothing less than "the creation of quantum mechanics".</p><p><a href="http://en.wikipedia.org/wiki/Erwin_Schr%C3%B6dinger" target="_blank">Erwin Schrödinger</a> (1887 - 1961) - an Austrian-Irish physicist who gave us the infamous "Schroedinger's Cat" thought experiment and other mind-benders from quantum mechanics. The Nobel-prize-winner's <a href="https://en.wikipedia.org/wiki/Schr%C3%B6dinger_equation" target="_blank" rel="noopener noreferrer">Schrödinger equation</a> calculates the <a href="https://en.wikipedia.org/wiki/Wave_function" target="_blank">wave function</a> of a system and how it changes over time. </p>
Erwin Schrödinger. 1933.
Satyendra Nath Bose. 1930s.
Enrico Fermi. 1950s.
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Lev Landau. 1962.<p><strong>Rank 2.5</strong> is where Landau initially ranked himself, rather modestly, thinking he didn't produce any foundational accomplishments. He later moved his prominence, as his achievement mounted, to the higher <strong>1.5.</strong></p>
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