“Entrepreneurship?” or “Liberty!”

Yesterday, November, 19th, 2009, was the first time I spoke publicly about “entrepreneurship”. It was the seventh presentation of the EAA colloquium “Current Developments in Technology and Business” in the autumn trimester 2009  at the University of the German Armed Forces in Munich.

The audience was very friendly and they followed my presentation with more than average interest. Also, there was, again, an interesting discussion with important comments to learn from for the orator. Many thanks to the audience.

To help you recall, here is my overview and a short description of what I talked about (it is also in place of slides, because I refrain from using slides in my presentations as a matter of principle).

Overview

  • Introduction
  • Why do we need entrepreneurs?
  • How to set up a business?
  • Do you need an “ingenious business idea”?
  • What is the definition of an enterprise?
  • What should be the goal of an enterprise?
  • Theory: entrepreneurs are free!

Content

  • Introduction
    About the enterprise: InterFace is an information technology (IT) service business. In order to be a success, we need the right kinds of people and the right kind of knowledge. Consequently, my presentations are always about people in their social context and the abilty to preserve, develop and apply knowledge.
  • Why do we need enterprises?
    Enterprises realize the creation of value and offer people employment. During this year, around 800,000 high-quality jobs were made redundant in German industry. This trend will continue. The reasons are sourcing and technological change. 
“Sourcing” means that enterprises no longer produce what they sell. Instead, they contract the production out. Enterprises producing in Germany are usually no longer capable of competing.    
Technological change substitutes simple technological solutions for complex ones. As a general rule, that also makes production easier. I exemplified this with the light bulb and LED. In the future, light will be produced more and more often by LED’s, instead of light bulbs. The production of light bulbs was a technological challenge only few (American-European) enterprises had mastered. LED’s, on the other hand, are semiconductors, the production of which is comparatively trivial. Basically, you can order semiconductor construction plants ready-made and build them in a short time. This, however, will not happen in Europe.    
We badly need new enterprises that initiate a new, qualified creation of value. That is the only way for us to counterbalance the drastic loss of enterprises and jobs caused by insolvency and fusions. As a general rule, this will only be possible through medium-sized enterprises.
  • How to set up a business?
    Most business setups are totally unadorned procedures. As a general rule, the step into self-employment is absolutely “normal”. Here are some examples:

    • Painter sets up painter’s business.
    • Dentist sets up his own dentist’s practice.
    • Engineer an engineer’s office.
    • Finance advisor a financial advising office.
    • Priest establishes a sect (that is also practiced when you undergo management coaching)
    • Marine officer turns pirate.
      I used this less-than-serious example for reminding you that there are also criminal enterprises. The police call them OC – organised crime. Over time, the standards change. In colonial times, enterprises that would today be decidedly criminal were considered quite respectable.
    • Professor builds up private university.
  • Do you need an “ingenious business idea?
    UnternehmerTUM asked students at Munich Technical University: What requirements would have to be fulfilled before you would consider setting up an enterprise? Here is the answer that was given most often by far: I would set up an enterprise if I were able to come up with an “ingenious business idea.
    Unfortunately, the ingenious business idea does not exist in reality. And in the few instances where actually there was one, it was mostly modified during the first few months of a company’s existence to such a huge extent that hardly anything is left of it.
The notion that entrepreneurship means an ingenious business idea implemented with a business plan and capital to be found is just wrong. This is what I deduce from looking at all medium-size enterprises, just as much as the really big enterprises like Google or Microsoft.
  • What is the definition of an enterprise?
    According to my definition, an enterprise is an eco-social system. It is made up by people who work together at generating business values. Enterprises as eco-social systems need a meaning, an order and a culture. All stakeholders, and the management in particular, have responsibility for the development of meaning, order and culture.
  • What should be the goal of an enterprise?
    Enterprises are the important columns supporting our economic system. They provide the necessary products and services. They also generate jobs, which is a requirement for our economical order to work. Consequently, it is the priority of an enterprise to make a contribution towards the creation of value in our economic cycle. Improving shareholder value must not get to be the foremost goal of an enterprise. Profits should be “morally justifiable”, their extent dependent on the entrepreneurial risk.
  • Thesis: entrepreneurs are free!
    Many orators use the word liberty. Liberty is celebrated as the valuable achievement of our time and of late German history. I heard the word particularly often on November, 9th this year. Yet, none of the orators who demanded or celebrated liberty was prepared to tell us what he meant with it. So now here is a number of “liberties” as I see them:
    Liberty can mean:

    • You are willing and able to live your life on your own authority.
    • You cannot do whatever you wish to do, but you will never be forced to do something you do not want to do.
    • You can balance your conscious and subconscious interests.
    • You promote both your own and other people’s personal lives, rather than minimizing it.
      Or also:
    • You fear nothing and nobody (Konstantin Wecker, “Willy”).
    • You live in harmony with the Great Secret (Willy Michel, Isarindianer).
    • Freedom is just another word for nothing left to lose! (Janis Joplin, Me and Bobby McGee)

I believe that people who are prepared to think about liberty will be able to identify with all of these answers. I also believe that people who think in terms of liberty are entrepreneurs deep in their hearts.
So my theory is:

“free people are entrepreneurs”
or
“entrepreneurs are free”

The ensuing discussion about this theory and other ideas was lively!

RMD
(Translated by EG)

P.S.
🙂 And I also received some exciting email comments!

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