Entrepreneurship is a perfectly irrational behavior, says author David Sax during a recent virtual interview hosted by the Kansas City Public Library.
“Statistically, it doesn’t make sense. Statistically, you are better off taking a job at an organization where you can work your way up and gain the benefits and the stability and the networks and the salary and all of that. You, on average, will be better off. And yet people every day go out and start businesses. There are dozens of people that I know that are starting businesses in the midst of this pandemic. Some out of necessity and some because they see an opportunity there.”
Yet, the inequities many think the coronavirus outbreak has exposed have been present for a long time, says Philip Gaskin, Kauffman’s Vice President of Entrepreneurship, who interviewed Sax for the event.
“There are barriers,” says Sax, “and it makes it far more difficult and stressful for these entrepreneurs. It puts them at a disadvantage before they even start. It sets many of them up for failure.”
He says for all the research on IPOs and venture capital, all the media on high-growth firms, sexy accelerators and coastal tech-startups, when he thinks about the kind of world he wants to live in post-pandemic, it’s one where someone can start a pizza shop.
“And if they want, they can grow it into 10 locations or 20 locations or some national franchise. Or they can just make a hell of a damn good slice of pizza in my backyard and build that fabric in the community,” Sax says.
He says the American Dream is the heart of capitalism, which is this promise that if you are someone who’s willing to take a risk and you have an idea, then you have a chance to do that. It shouldn’t matter what your background is, where you’re from, or what your last name is, or your caste or lineage. “You should be able to go out and have a fair chance at starting something on your own and growing it,” he says.
“We want a country, and a world, where people can start the next fantastic, super-successful company that becomes high growth and incredibly successful, but we also want one that has family companies. We also want one that has companies that are mission-driven and community based. We want all of that.
“It is such a fundamental human behavior of hope – and the reasons people do it is a desire for freedom with your time, is a desire to build something in your community, it’s a desire to live through your values, or to work in a family business and build on that legacy,” Sax says. “It’s a human behavior that you can’t put in a box, you can’t stifle.”
Led by Gaskin, the Foundation’s entrepreneurship strategy aims to break down barriers so America’s entrepreneurial energy can thrive in all communities. Gaskin hopes that the interdependence shown during this time of crisis can be sustained. “As a former community organizer, building movements block-by-block, door-by-door, the power of communities is certainly there,” he said.
Sax shares in Gaskin’s hope. “There are barriers. Capital is going to be hard to come by, but labor is going to be easy. There’s going to be lots of talent out there,” Sax says. “There are things that people need that they didn’t need: masks, different ways to get food, different types of delivery services, ways to entertain your kids.
The American Dream is the heart of capitalism, which is this promise that if you are someone who’s willing to take a risk and you have an idea, then you have a chance to do it.
“I think that entrepreneurs are already rebuilding the economy before everyone else has figured out how to save what they have. And you see that in entrepreneurs who own businesses who are like okay, ‘We were a fine dining restaurant. [Now] we’re a burger restaurant; we’re doing takeout; we’re starting tomorrow. Rip out that sous vide machine; put in a grill. You’re going to work over there. I’ll be 12 feet away. We’re going to wear masks. This is how we do deliveries.’
“Entrepreneurs have the freedom to do that because it’s only them they have to answer to, and they know that the only risk right now is staying inactive,” Sax says. “That’s the greatest risk of all.”
He says the big picture concern coming out of the COVID-19 crisis is how to rebuild so much of the economy and rebuild so it opens access to entrepreneurship for a far greater number of entrepreneurs. How do we rebuild better?
“It’s not just going to be a small but super-successful number of tech startups that rebuild this,” Sax says. “We need to rebuild our communities and the ecosystems of entrepreneurship on every block and in every town and city and in every state and country.
“We need to rebuild the hair salons and the restaurants and the mechanics and the small company that made a particular type of part for a tractor or something like that,” he says. “I mean all of those businesses not only support economies and jobs, but they are the fabric of the communities.”
David Sax is a longtime business and culture journalist and the author of The Revenge of Analog, The Tastemakers, and Save the Deli. Sax released his latest book, The Soul of an Entrepreneur: Work and Life Beyond the Startup Myth, in April.