Entrepreneurship and its Discontents

MBA student C.Z. Nnaemeka writes a brilliant evisceration of the American entrepreneurial mindset that also gets the solution very, very wrong (HT: Cindy).

At bottom, Nnaemeka’s diagnosis is based on some shaky underpinnings. Her dim view of government will probably go over very well with her peers at Sloan, but is both subtly and egregiously unfounded. Egregiously because she seems to take the common view that American politicians are universally corrupt and uninterested in solving the problems of the underclass, when what really ails our politics is that one party – I’ll leave it to the reader to guess which – has managed to game our political institutions to thwart some mostly reasonable attempts to solve real social problems.

Subtly,  because she falls into the corporate triumphalism that underlies all business schools. Government at all levels in the US is slow and lumbering for a whole host of reasons (inability to pay employees salaries comparable to what they’d make in the private sector chiefly among them) but one overlooked reason is that the government as an institution is old.  This is not a problem inherent to government; rare is the corporation that’s been around several decades that isn’t running on horribly outdated processes with ossified management. (Any freshly minted Sloan MBAs jumping at the chance to work in the sexy mining, rail freight, or steel industries lately? I didn’t think so.)

But the real problem with Nnaemeka’s essay is that it misses the obvious solution for the sake of managerial grandstanding –  again, a not uncommon pathology of modern managers. Poor white people don’t have enough money to pull themselves out of poverty? Rather than first brainstorm how to use technology to make their daily lives more efficient or marginally help them deal with their kids’ food allergies or whatever, you could, you know, give them more money. Fundamentally this kind of large-scale tide-rising is why we have governments to make economic policy, even if the political system is currently broken. It would be nice to see a manager acknowledge that once in a while.

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  1. While I agree that the original article isn’t perfect, “give them more money” misses the mark.

    The great thing about entrepreneurs is that they can take money, and turn it into things worth more money.

    So, for instance, would it be better to give the lower-middle class described here more money? Or take that money, and allow someone to build, say…a system of small, dynamically stocked grocery stores in highly residential urban areas to replace understocked bodegas and fast food as a primary source of nourishment? Or come up with a car-sharing service to make it possible for people to get to their minimum wage job in 30 minutes instead of 90?

    Entrepreneurs can (could) change the systemic and structural issues that keep people in the “unexotic underclass”

    • I think you might be misreading my paragraph here a bit – what I’m basically saying is that better economic redistribution will directly bring about a lot of these magical outcomes anyway. If you put more cash in the pockets of the poor, there will be more of an opportunity for the carshare companies and grocery chains to capitalize on. What’s the reason they don’t go into these areas right now? It’s not that the poor just ignorantly prefer McDonald’s or that they like walking to work even though it wastes time. Or that the capitalists responsible for funding such enterprises simply lack the vision. It’s that the people who would be their customers don’t have enough money to give them (and no prospect of having more in the forseeable future). Rather than set up some ornate government partnership or give tax breaks to these firms or, as Nnaemeka recommends, oddly distort the existing tech and VC businesses by getting them to voluntarily turn away from being rapaciously profit-seeking enterprises, better just to direct the money where you know people will spend it on what they need, and to allow that spending to be what drives investment and structural change.

    • Brice Cohen
    • May 31st, 2013

    Hi Adam, I was not sure how to contact you. Thus this comment on your blog. Excellent response to Nnaemeka’s analysis/opinion piece. I am a former colleague’s of hers and know that she specifically does not make mention of her MBA or Sloan affiliation in her articles. She also does not mention 1 of her former workplaces. Given what she writes about, she has to be very careful about what she does disclose for legal reasons. If you could change your references of ‘MBA student’ to ‘MIT student’ (in particular in the post title) that would be completely fine. Your viewpoint/rebuttal is admired. Thanks for this post; very good write up.

    • Hi Brice – I’m not sure what to make of your comment given that Nnaemeka’s own bio blurb at the bottom of her essay reads:

      “She graduated from MIT in 2010, focusing on Entrepreneurship + Innovation.”

      AFAIK MIT undergrads don’t have an entrepreneurship major (and in any case her bio says she’s already a Wellesley alum), so really CZ is herself telling us that she’s a Sloan MBA grad – I’m not privy to any inside knowledge on her background. I could tweak the post to make clear that although she’s writing for her alma mater’s business magazine, she is not a current MBA student, but beyond that I’m not entirely clear on what the problem is.

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