{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"Performative Entrepreneurship","description":"On this week\u2019s episode of the podcast my friend and colleague Antony Bruno joins me to discuss a fascinating academic research paper that concludes the cottage industry around entrepreneurship is failing us. The paper articulates many of the fears I have about mistakes entrepreneurs might be making in their journeys. The rise of the Veblenian entrepreneur The paper, \u201cTowards an Untrepreneurial Economy?,\u201d starts with an intriguing question: \u201cWhat is driving the declining quality of innovation-driven entrepreneurship?\u201d The authors point to the rise of the \u201cVeblenian entrepreneur\u201d \u2014 or \u201cperformative entrepreneur\u201d as we call it on the show \u2014 as the main culprit. These are want-to-be-entrepreneurs who are in it for the wrong reasons; they pursue it as \u201cconspicuous consumption.\u201d They aren\u2019t innovating as much as pursuing a lifestyle and the status that society bestows on entrepreneurs. The result, according to the papers authors, is essentially where we are today: \u201can economy which superficially appears innovation-driven and dynamic, but is actually rife with inefficiencies and unable to generate economically meaningful growth through innovation.\u201d The theory of the leisure class The term is named after Thorstein Bunde Veblen, a 19th century American economist and sociologist and outspoken critic of capitalism who coined the concept of conspicuous consumption and conspicuous leisure in his 1899 book The Theory of the Leisure Class. Veblen writes that the businessmen apply themselves in useless activities that contribute neither to the economy nor to the production of useful goods and services required for the functioning of society, while the middle and working classes apply themselves in productive occupations that support society. Cottage industry that\u2019s failing us The rise of the leisure class spurned a cottage industry around selling service to want-to-be entrepreneurs that grew to $13 billion in 2014 and has been growing at a steady clip, 12% a year, for decades.  It\u2019s a cottage industry that I\u2019ve participated in \u2014 offering entrepreneurs coaching, courses, and camps to improve their skills \u2014 and I\u2019ve seen first-hand how much people buy into it. The research paper\u2019s authors conclude that some innovative entrepreneurs do get value from these services \u2014 but the majority of people do not and, in fact, perform worse than if they\u2019d chosen a different path. Ideology of entrepreneurship  The paper\u2019s authors argue \u2014 and I agree \u2014 there\u2019s an ideology of entrepreneurship that\u2019s conveyed to people from \u201cthought leaders\u201d (who are often failed entrepreneurs themselves) proclaiming things like \u201clive your best life!\u201d and \u201cfailure is good.\u201d  In this culture failure is a badge of honor. Everyone\u2019s heard that 90% of ventures fail, and somehow that helps motivate more people to try. But if you stop to think about it, if 90% of entrepreneur ventures end in ruin \u2014 a failure that you don\u2019t come back from \u2014  that is not something to celebrate. The problem with Gary V Gary Vaynerchuk is the epitome of this performative culture. Don\u2019t get me wrong. He\u2019s an impressive guy in many ways. However, the impression people walk away with is that they need to be grinding all the time like Gary V and that will somehow make them a successful entrepreneur, or at least give them the appearance of one \u2014 which is really the point anyway. This is what we like to call \u201chustle porn,\u201d and there\u2019s a lot of it out there. People watch how Gary V acts and them mimic that behavior. That\u2019s Veblenian entrepreneurship.  Seeking status Partially because of the entrepreneurial industry\u2019s success selling the dream and partially because of poor job prospects, people choose the entrepreneurship route  to increase their status within their community.  If your job prospects are Starbuck barista or \u201cbusiness owner,\u201d it\u2019s not hard to see which you\u2019d pick if you were primarily motivated to impress your family and friends.  People don\u2019t realize that most entrepreneurs actually make less than they would at an established company, and that being the owner of a business of any notable size gives you much less freedom.  When you\u2019re an employee, you worry about losing your job. When you\u2019re a business owner, you worry about losing 25 people\u2019s jobs (or however many employees you have) and the impact on their families. If it\u2019s status you\u2019re after, you might be better off gaining valuable experience at an established company and then leveraging that to book your book tour (it\u2019s a popular model followed by authors like Kim Scott, who wrote Radical Candor). Opportunity cost When I was in college, I ran a painting franchise with a group of very intelligent and talented students. I remember thinking, \u201cMan, these people are so smart, why are we painting houses? We could be doing something big and exciting where we could make a difference and make a lot of money.\u201d There\u2019s an opportunity cost to pursuing entrepreneurship, especially if you\u2019re 90% likely to fail. What\u2019s the alternative People fail to see how their alternatives can lead to meaningful work \u2014 to that big, exciting, rewarding thing that makes lots of money. But you can find them if you look. When I was just getting started in my career, I sought out apprenticeships \u2014 though that\u2019s not what I called them \u2014 with people I felt I could learn a lot from. I wasn\u2019t concerned with how much I made or what my exact contributions might be. I wanted opportunities to learn from smart people, build skills, and figure out how I can contribute.  That\u2019s the path I recommend to many people who are young and thinking of starting a business. Go get some experience first. Build relationships. Then find a problem you\u2019re passionate about solving and start a business. Identity capital In her book The Defining Decade, Dr. Meg Jay writes about the concept of \u201cidentity capital,\u201d the collection of skills, relationships, and professional resources we build up over our lives. When you\u2019re in your 20s, she writes, you should focus on building your identity capital. People need to know you're capable and trustworthy and you have a sense of where you can have the most impact and where you should focus. Then, you leverage the benefit of that capital in your 30s. ","author_name":"Smith Sense","author_url":"http:\/\/smithsense.com","html":"