No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Nine: P31W: Enter the Entrepreneur! 217 One can imagine many “one hit wonders” that stumbled across one idea and were able to put it into place. Even those must have some subset of entrepreneurial attributes, for at least a period of time, but they may not merit significant study. For our analysis, I’m thinking of the late Steve Jobs of Apple Computer, or a Fred Smith of FedEx. We see this sustained entrepreneurship with the P31W, she was involved with a textile business for some period of time, and expanded that with the production of a vineyard. Always on the watch for opportunity, her alertness sustained her entrepreneurship. One attribute we quickly see is that of creativity, which is exemplified in our problem solver or creative destroyer. Entrepreneurs are creative in their ability to think about problems; they never take the first-best solution—that’s what everybody else would try to do. They study them for long periods of time, they brainstorm various ways to solve the problem, and they persevere. They don’t take failure as a defeat but as an opportunity to learn more about the problem—they have a growth mindset. Some of them are geniuses and just immediately “get it.” But for most, it takes an intensive period of creative energy and devotion to solve the problem. Entrepreneurs may solve problems for several reasons: to make money, to just show that it can be done, or they think they have a better way for the world to operate. But they approach the problem creatively—in ways no one else has thought about. The creativity they use may be in how resources are combined, deciding what product should be produced, what the production process ought to look like, or even figuring out how a product can be used in a different way. You will often hear this type of thinking referred to as “out of the box” thinking, describing how entrepreneurs are able to think beyond what others do. The ways that entrepreneurs may creatively change the production process are almost endless; remember that all men are created in the image of God! Just as our God is creative, so, too, are those created in His image. The fact that there are endless opportunities doesn’t mean there aren’t endless obstacles; therefore, entrepreneurs must persevere. They have to exercise diligence in pursuit of their objective. This is usually the result of sweat equity and long hours. This may be just long mental hours, but like all things, it has an opportunity cost. You and I may be thinking about this weekend’s football game, but the entrepreneur may be looking at yet another way to “skin the cat.” It took FedEx’s Fred Smith five years after graduation to implement his idea. Colonel Sanders didn’t develop the franchise part of KFC until 25 years after initially selling fried chicken; he persevered. Some environments are more hospitable to entrepreneurial activity; the quality of the institutions matters a great deal, and we’ll discuss that in chapter 10. But even the most favorable environment requires diligent perseverance. One of the key entrepreneurial functions is risk bearing, so to some degree, entrepreneurs have to be willing to bear risk and be courageous, knowing that through their own strength and providential aid they can accomplish their objective. Therefore, these entrepreneurs have to be courageous; they cannot be afraid to fail. As the biblical example of David showed earlier, Christians especially should be courageous and willing