Defining the entrepreneur
Bob Zadek opened his 2015 conversation with serial entrepreneur and investor John Chisholm by asking what entrepreneurship is and how an entrepreneur differs from someone merely employed in business. Chisholm’s definition was minimal: an entrepreneur is “somebody who starts their own business” — from scratch, “with nothing but a dream,” recognizing a customer need, figuring out a way to satisfy it, delivering it, and turning that into a business. He distinguished the requirements of the entrepreneur from those of a manager or executive in a well-established company, where collaboration with other departments, teamwork and fulfilling the mission of the larger company are critical, while allowing that teamwork is critical in a startup as well. Zadek framed the difference as one of authorship: an entrepreneur designs the goals of the business rather than fulfilling somebody else’s, and so enjoys almost total freedom in the mini-universe of the business being created. Chisholm agreed that initiative and creativity matter even more in entrepreneurship than in an established company, because the entrepreneur is building from scratch and may be devising a brand new solution to a customer need that has not been satisfied before. John Chisholm’s Advice for Unleashing Your Inner Company (2015)
Chisholm reduced the starting requirements to two things: passion and perseverance, which reinforce each other. If he is so deeply engaged with something that the hours go by like minutes, perseverance is easy; conversely, sticking with something long enough to get good at it can turn into love of it. The person passionate about a field bumps up against the boundaries of currently available products and services before other people do, and so recognizes customer needs earlier. Perseverance is needed because roadblocks will come. On risk, Chisholm disputed the premise that entrepreneurs are inherently more willing to take risks than other people; rather, because they are so immersed in the customer need and look at it from many angles, they find ways to manage risks, so that what looks like a very risky proposition to others does not look that risky to the entrepreneur. Zadek characterized the activity as an adventure with an adrenaline rush, and argued that its satisfaction is irreplaceable because the entrepreneur has enriched his own life while many other people have benefited. John Chisholm’s Advice for Unleashing Your Inner Company (2015)
Entrepreneurship as a profession
In a 2013 episode on medicine, Zadek recalled his family doctor, Dr. Siegel, who made house calls for what Zadek remembers as $10, brought a little black bag, set his own rates and all his own rules, and would treat a patient who could not pay. Zadek called him an entrepreneur and a business guy, and said there was nothing special about medicine — it is selling a different good and service. He asked guest Dr. Jeffrey Singer whether the days of entrepreneurship were gone. Singer agreed, and added that medicine is not only a business but a profession with its own ethical code: doctors were taught always to put the interests of the individual patient paramount, so that information could not be divulged to a patient’s spouse without the patient’s permission. Zadek observed that lawyers call this a duty of loyalty. Singer described professions as a subcategory of entrepreneurs who follow a certain kind of ethical credo, and said that credo is also being tremendously threatened and damaged by the current state of affairs. Will Americans Accept Second Class Medicine? (2013)
Singer’s own model was Dr. Heinrich, who worked out of the first floor of his house with the second floor as his home, seemed to know all his patients personally, kept a transparent price list, adjusted prices to individual circumstances, charged patients of limited means less, sometimes made up the difference on patients who could afford to pay more, and sometimes accepted payment in trade — shelves put up in his garage in exchange for medical bills. Singer said he was not under any sort of external price controls. Will Americans Accept Second Class Medicine? (2013)
Crony capitalism and the denial of entrepreneurship
Luigi Zingales, asked by Zadek to explain crony capitalism, described it as a pervasive occupation of power by companies: in socialism the government controls companies, while crony capitalists are companies controlling the government, with the same result — no freedom, no entrepreneurship, and a market that cannot search for the best solutions because solutions are imposed from above. Zadek described governments allocating tax credits, tax benefits, cheap loans and regulations that keep out competition, selecting winners and losers rather than the marketplace voting with dollars, with a few people who have never worked anywhere except in government making profound economic decisions. Zingales called that a very accurate description. Obama Nationalizes General Electric (2011)
Small business, job creation and independence
In a 2020 episode, Zadek asserted that small business is the engine for job creation and independence, that small business creates all the new jobs, and that every big business in America started as a small business, naming Amazon and Walmart. He argued that competition is wrongly treated as cutthroat when it means businesses fighting for the right to give us what we want at a low price. Guest Robert C. Wright agreed that small businesses account for the lion’s share of job creation, and that when small businesses fail the engine of job creation fails. The Decline of American Independence (2020)
Wright’s book Little Business on the Prairie studied entrepreneurship in South Dakota over several centuries. He described what he called a tortoise economy with very low unemployment, generally well below 2%, which sailed through the financial crisis, and attributed it to an entrepreneurial climate in which losing your job means making your own employment and starting a company rather than going to the government for money. He said his children had to come up with business plans and detailed budgets in school, and that South Dakota has, leaving the ag sector aside, the highest percentage of income coming from proprietorship. He credited that proprietor class with pressuring the governor against lockdowns during the COVID-19 panic, with only big gatherings shut down, and said the only major problem was a Chinese company called Smithfield running a pork processing plant in Sioux Falls, where hundreds were infected at one point, tamped down because business owners were allowed to make decisions for themselves. The Decline of American Independence (2020)
Trust, risk and the decline of entrepreneurship
Zadek told Kevin Vallier in 2020 that he has profound respect for the power of entrepreneurship and small business, and asked about Vallier’s observation that as social trust declines, so does trust in business and the willingness to take a risk, and as risk-taking declines, entrepreneurship declines, becoming a brake on the economy. Vallier said he knew of no measures that look explicitly at social trust and entrepreneurship levels, calling it a cool idea for papers, but offered a reason to think the connection is deep: social trust reduces economic growth in part because people exchange less, and it affects productivity because the ability to exchange and form closely-knit economic organizations is reduced. Innovation occurs in moments of exchange — that is how startup money is raised and how flexible, creative workers are hired. A less trusting society engages in less exchange and has more corruption, so opportunities for innovation decrease. Vallier called Zadek’s hypotheses plausible and untested, and said we are seeing less entrepreneurship. Mandatory PPE (2020)
Across episodes
The topic recurs across the 2011 Zingales episode, the 2013 Singer episode, the 2015 Chisholm episode, the 2020 Wright and Vallier episodes, and the 2021 Carol Roth episode. The excerpts show no development in the treatment: the same equation of entrepreneurship with individual freedom and risk-bearing recurs, with the later episodes adding the specific threats of lockdowns and declining social trust rather than revising the earlier account. Carol Roth on the War on Small Business (2021)
What the sources do not cover
The excerpts do not supply a systematic definition of entrepreneurship beyond Chisholm’s, nor any empirical measure of entrepreneurship levels; Vallier explicitly says he knows of no such measures linking social trust to entrepreneurship. The 2015 Chisholm episode’s excerpt is largely a summary of topics rather than dialogue, and the 2015 Nowrasteh episode lists entrepreneurship only as a topic. The 2021 Carol Roth excerpt stops before the discussion of her book’s argument.