The Entrepreneurs, by Derek Lidow (preface)

THE

ENTREPRENEURS

The Relentless Quest for Value

Derek Lidow

Preface Stumped No Longer

I

was asked by a student on my first day teaching at Princeton, “What’s the key to being a good entrepreneur?” I knew I didn’t know the answer. In preparing for my teaching position, I had done enough reading and asking around to know that no one else knew the answer either. To answer this question required knowing the answer to two even more fundamental questions about entrepreneurship: what good does it do and how does it do the good it does? I have spent the past twelve years looking for the answers.

I would like to share with you what I’ve found.

Answering these questions provides many valuable insights on how we can help entrepreneurs make the world more sustainable and equitable. As we will soon see, we will not succeed without entrepreneurs leading the way. Entrepreneurship is an even bigger deal than we think. We have become so accustomed to the enticements of entrepreneurs that we do not even notice how much of our lives they control. Entrepreneurs may bring us mind-blowing playthings, but we must also hope that they invest the time and effort to make the world sustainable and equitable

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because it cannot happen without them. My findings make me optimistic that we can.

I feel fortunate to be writing this book. First, I have a unique set of experiences that give me an unusually broad perspective on the subject. I have a PhD in applied physics, which taught me how to ask questions and find answers by exploring, analyzing, and precisely and practically describing mysterious phenomena in greater detail than anyone else. After graduate school I had a career at an established semiconductor company, where I held many different positions and ultimately became CEO. I then did what few successful big-company CEOs do: I left to start my own company from scratch. After successfully selling the company I founded and led, I was invited to teach entrepreneurship at Princeton. While here I have written two books related to what it takes to be a good entrepreneur. My first book, Startup Leadership, outlines the fundamentals of creating and leading enterprises and teams that create value for everyone involved. My second book, Building on Bedrock, describes the who, what, when, where, and how of successful entrepreneurship today. Researching and writing those books laid the foundation for me to tackle the more ambitious project of discovering where and how entrepreneurship has evolved into its present form, where it is headed, and whether we can change the trajectory of entrepreneurship for the better.

Second, I feel very fortunate to be able to write this story now.

Nobody has yet written it. Countless scholars have researched, analyzed, and contemplated the role of business and economic structures in shaping society, but we’ve mostly overlooked the role of entrepreneurs. That is analogous to studying trees without any concerted effort to study the role and evolution of seeds. Part of the reason that scholars have overlooked entrepreneurs is our inability to agree on a definition. No widely accepted or debated economic theory explicitly models the impact of entrepreneurs.

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The understanding of the story of entrepreneurship has rarely brought academic prestige. Hence the absence of effort.

I am also fortunate to be writing this book at Princeton.

Because my role is to teach students about entrepreneurship, I have been fully and completely supported in my efforts to better understand the subject. The university’s world-class scholarly support staff and facilities have been essential in finding evidence of entrepreneurship in so many places and within so many types of material. Many of my academic colleagues at Princeton and elsewhere have provided essential leads (all thanked profusely in the acknowledgments).

Finally, I am writing this book after many recent pivotal discoveries identified entrepreneurial behavior further in the past and in more places than realized. This book would be much shallower if it had been written fifteen years ago. Past attempts to summarize entrepreneurial behaviors by the likes of Marx, Schumpeter, and others were constrained and incomplete, as the world had not yet discovered many facts and stories that I have found essential in writing this book.

A Fascinating and Entertaining Story The story of how and why entrepreneurship became so ubiquitous and impactful is both fascinating and entertaining. For example, I found archeological records that show hunter-gatherers making a small assembly line to produce jewelry. Who knew that jewelry making was the world’s oldest profession? We have ancient documents that introduce entrepreneurs from four thousand years ago.

By name. We hear them celebrate their successes and lament how stressed out they feel. We feel their relief in finding investors. Four thousand years ago some even formed limited-liability partnerships

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that closely resemble those used by venture capitalists today. We meet fascinating entrepreneurs from long ago in almost all places in the world behaving in ways that are both familiar and surprising.

I want to share these stories. They’ve been extracted from diving deep into archeological, anthropological, and historical records.

These stories are not just for academics; they will fascinate almost everyone. These stories led me to the answers I was looking for, and I think they will help everyone develop valuable new insights about entrepreneurs.

The only antidote to our many existential problems is knowledge. We must understand what entrepreneurship is capable of accomplishing and the crucial role it has always played in driving human progress, for better and worse, in order to inspire more people to responsibly perform this essential function for the rest of us. This book will illuminate, for the first time, what entrepreneurship really does—and has always done—so that we can all reap its benefits.

(I note here that to make this book as enjoyable as possible, I do not use footnotes, which I find distracting. Instead, I have included extensive notes in an appendix. There you will find the most relevant references I used in writing the book. The notes will help you dig deeper, if you are so inclined, into the story of entrepreneurship.)

Continues from front flap

THE ENTREPRENEURS

—Howard E. Aldrich , Kenan Professor of Sociology, University of North Carolina Chapel Hill

Derek Lidow is a professor of the practice at the Keller Center for Innovation in Engineering Education at Princeton University.

He is the author of Startup Leadership: How Savvy Entrepreneurs Turn Their Ideas Into Successful Enterprises (2014) and Building on Bedrock: What Sam Walton, Walt Disney, and Other Great Self-Made Entrepreneurs Can Teach Us About Building Valuable Companies (2018), as well as more than a hundred articles on innovation, entrepreneurship, and leadership. Lidow also has practical experience as the founder of a leading marketresearch firm and CEO of a global semiconductor company, and was a Hertz Foundation Fellow.

“Lidow has given us a comprehensive, rigorous, and richly documented treatment of entrepreneurship. This book is three books in one. It is a history book, meticulously describing entrepreneurship through the ages. It is an economics book, analyzing the incentives and behavior of entrepreneurs, their consequences, and society’s reaction. And it is a management book for students and professors of entrepreneurship. That all three are delivered in an engaging and easygoing style bodes well for The Entrepreneurs becoming a classic.”

—Shanta Devarajan, Georgetown University, former senior director for development economics at the World Bank

“Our future success rests on our ability to harness the creative and innovative potential of all—a quest made possible only by understanding the evolution of entrepreneurship and the factors inherent in shaping the ecosystem in which founders operate. Derek Lidow’s work provides masterful insight into what has come before and how that should inform our efforts to create a more accessible, inclusive, and equitable path to entrepreneurship going forward.”

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—Anita Sands , board director of multiple companies and venture partner, New Enterprise Associates

“Lidow takes on the study of entrepreneurship with a long historical lens, revealing compelling macro-patterns across time. A very enjoyable read.”

—Kaihan Krippendorff , author of Driving Innovation from Within:

A Guide for Internal Entrepreneurs

C O LU M B I A U N I V E R ST Y P R E S S / N E W YO R K C U P.C O LU M B I A . E D U Jacket design: Lisa Hamm Jacket image: Lisa Hamm (digital composite) Author photo: Diana Lidow

The Relentless Quest for Value

“Derek Lidow’s intellectual curiosity is infectious! I was dazzled by his ability to use deepin-the-weeds historical research to illustrate fundamental principles of entrepreneurship through the ages. Lidow takes the reader around the world and through the centuries, using fascinating case material to document his argument that the principles of entrepreneurship are deeply embedded in the way civilization has evolved over the millennia.

Entrepreneurship scholars and other interested readers are going to love this book.”

Lidow

THE ENTREPRENEURS

he underscores ways to mitigate its harmful side and harness its positive effects. By highlighting the fundamental qualities of innovation throughout history, this book provides an indispensable new perspective on how it is shaping our present and future.

PRAISE FOR

ISBN: 978-0-231-19914-8

an imprint of columbia university press Printed in the U.S.A.

The Relentless Quest for Value

Derek Lidow

E

ntrepreneurs are among the primary shapers of our culture, yet their role in driving progress and influencing society has often been overlooked. As far back as we can trace human history, there have been entrepreneurs. Almost five millennia ago, copper tool manufacturers set up a factory in what today is southwest Spain, profiting for hundreds of years from trade around the Mediterranean. Papyri document the diverse investments of an ancient Egyptian businessperson, from grain-yielding land to flax for linen cloth. What do these figures have in common with renowned modern entrepreneurs, and how do their similarities help us achieve a deeper understanding of entrepreneurship as well as the potential for a healthier, wealthier, and more equitable and sustainable future?

Derek Lidow delves into the deep history of innovation to deliver essential new insights into how entrepreneurs create value and bring about change. Telling the captivating stories of people from many different cultures over thousands of years, he shows how entrepreneurs transform the world through relentless innovation. Lidow demonstrates that far from being heroic lone individuals, they copy and then add to the inventions of others. The cumulative innovations of swarms of entrepreneurs expand the scale, scope, and range of products and services.

Lidow emphasizes how entrepreneurship can harm society as well as benefit it, and Continues on back flap