Marcin Senderski1

The Incredibly Shrinking Courage: Is the Entrepreneur an Endangered Species?

Shortage and dynamism

It is not a breakthrough discovery that economics is a science of shortage. We all have been taught

during the first days on campus that economics is all about mastering scarce resources. No free lunches,

no eating a cake and having it, no applause for phantasmagoric election campaign promises. The

economist is used to deficit. So are the entrepreneurs, who put economic principles into practice.

Another inherent trait of economic sciences, by far less recognized, is the dynamism of the economy.

Much time will pass by until we accept uncertainty and learn to symbiotically coexist with it, as Nassim

Taleb proposes. Among the outcry for more “social justice”, his voice gets overwhelmed too easily. In

social policy, he writes, a safety net provided by the state should be designed to help people take more

entrepreneurial risks, not to turn them into dependents (Taleb, 2012). The problem is, however, that the

developed societies take unconditional safety net for granted, and do not usually see the point in

reciprocating it, either by harder work or by enterprisingly turning bad fortune into good.

Undoubtedly, at some point we subconsciously became submissive mental slaves of the macroeconomic

landscape, condemning external forces for all evil. Is it ”just” the lack of courage? Or is it worse: does the

unforgiving evolutionary process gradually deprive us of our entrepreneurial bent? The bent that used to

guide people through the snags of shortage and dynamic setting, transforming the most adaptable into

brilliant entrepreneurs.

The aim of our societies should be not to produce a crowd of fanatical entrepreneurs, but to infuse a

virus of entrepreneurship into people’s minds, currently infected by conformism and stuck in comfort

zones. Well-trained individuals should always be in a standby mode, spotting opportunities and

conceptualizing business ideas.

Out of necessity or out of spirit

The highest entrepreneurship rates cannot be found in Scandinavia or in the United States. Quite the

opposite, the Sub-Saharan Africa enjoys the most impressive ratios. The Latin America and the Caribbean

are runners-up (Xavier et al., 2012: p. 26). Apparently, entrepreneurial courage has sub-classes:

voluntary entrepreneurship and necessity entrepreneurship, with the latter prevailing in structurally

underdeveloped economies. In short, necessity entrepreneurship is like boxing. A boxing trainer has

once told me that unlike other sports, this one is not a cup of tea for preppies. Only local rookie criminals

and kids from dysfunctional families have found a shelter in his club. A “nothing-to-lose” approach works

both in the ring and among bloody capitalists competing with your start-up. You do not need to make

any particular decision to become a necessity entrepreneur. Your fate is sealed, deterministically, when

you are born. On the contrary, if you do not have to box, the situation gets complex. As men get older,

1 Kozminski University, marcin@senderski.pl or marcin.senderski@kozminski.edu.pl

and grow up in abundance, they usually pile up possessions, having more to lose. Risk aversion rings a

bell for whoever took the elementary economics course.

79% of Saudi Arabian youth prefer government jobs to private sector jobs (Mojib, 2011). About 70% of

French students looks forward to join civil service (Mueller, 2010). Some 60% of over 6,000 graduates,

surveyed by the top notch Tsinghua University, hope to work for government-linked organizations (Ng,

2012). Whereas 50% of top Chinese engineering students want to startup, only 3% rank it as their top

career choice. By the same token, more than half of Chinese engineering students ranked a government

career as their primary preference (Lukoff, 2011). The United States are a ray of hope: 60% of Gallup’s

respondents would rather work for a business than the government (Brinkerhoff, 2012).

Since our formative years, we have been brought up in quite homogenous settings. Schools and

universities rarely reward us for non-conformism. Individualism is expressed by clothing style or henna

tattoos rather than by economic savvy. But we could be taught entrepreneurship, if we had eyes and

minds wide open. Years after reading marvelous Ferenc Molnár’s “Paul Street Boys” I still remember the

guy manipulating the price of halvah in order to maximize profits. While in elementary school, I

established my own monthly magazine, being an unwelcome competition to the mainstream school

media. Also, on this thread, Dan Pallotta recollects his childhood when he competed severely with other

kids operating in lawn-mowing and newspaper delivery businesses.

When I consider the empty streets in my neighborhood (…) I wonder, where will our kids get the

kind of hands-on entrepreneurial training we did growing up?

(Pallotta, 2010)

Now, two success stories. Both as disparate as can be.

Mr. Zenobiusz Golonko grew up where the devil says goodnight, in the north-east rural Poland. Serving

as a non-commissioned officer in the army, he had been notoriously disgusted by his superiors flaunting

their splendor and extravagance. Even then, he used to slip from his unit to operate carbonator and sell

soda water to pedestrians. Decent summertime earnings. Creativity and profit maximization found its

vent even at times of political oppression. After 1989 they were in full swing. Disappointment motivated

him to stand on his own feet when the political turnover took place. Having some part-time business

experience earned in 1980s, he soon set up his own firm, manufacturing silicone and rubber gaskets.

The career of Mr. Paweł Mrowiński was quite the opposite. Yet before the fall of communism he had a

senior position in a state-owned company. Mr. Mrowiński, a risk-loving salesman, has found only few

truly stimulating incentives in the communist reality. The inability to act was a common ailment among

the bright people, unluckily forced to waste their resourcefulness under the oppressive regime. He

reached the top, since not being an active communist he could not move any further in corporate

hierarchy. He asked for letting him go. Is there any greater courage than resigning from an executive

position to establish a start-up in an inherently anti-private political system, with irremovable Damocles’

sword of expropriation or political repression? Nevertheless, he succeeded. He has gained a considerable

track record, importing computers from Thailand and exporting artistic craftsmanship.

Rise and demise

Entrepreneurship became a national sport almost overnight. No matter if you were a well-established

scholar, a soldier or a farmer. If you had an inclination to make money and you were not afraid of heavy

bootstrapping, you called yourself an entrepreneur and got it going.

“Honey, I’m a businessman”, shouted Mr. Golonko to his wife when this day came. At work he was

always beyond reproach. Working like a dog, he got to know his business like the back of his hand. But at

the same time he failed to inspire his subordinates, preoccupied with petty larceny and shirking. The

story of Mr. Golonko, not only a businessman, but also a local activist, is not only the tale of

entrepreneurial success. It is also the story of a leader with no allies, struggling with calamitous red tape,

overwhelming fraud and corruption, somewhat evident in the reviving economy.

The progenitor of Polish entrepreneurs, Stanisław Wokulski, a well-known character created by Poland’s

19th century literature, was unhappy and unappreciated. Talented and hard-working, he became a

successful merchant and multiplied his wealth, but he could not marry a woman he loved. A woman

from a decaying and outrageously idle family, but – still – a noble woman. Glass ceilings do not only

belong to the past. Entrepreneurship rose to nobility for a short while at the turn of 1980s and 1990s,

but it was a swan song. People reacted to incentives that arose out of the blue, taking advantage of

favorable laissez-faire legislation. Home-bred entrepreneurs, wearing tracksuits and jeans jackets, were

sleeping in the railway stations of Berlin or Vienna, with some hot ready-to-import tradables in their

backpacks. However silly it may sound, they were the agents of change, the peculiar elite. Today,

entrepreneurship is only a second option. If you are temporarily out of job, your LinkedIn headline

probably reads “an entrepreneur”. In the developed world, entrepreneurship is not considered either a

good career choice or the determinant of high status.

And whose courage is greater?

How does the start-up of 1990 differs from the start-up of 2013. The greater share of capital-consuming

projects and the elevated ambition of well-educated youth, have both increased the barriers to entry

and weakened the enthusiasm of prospective self-made men. The corporation, which offers steady

salary, along with a medical package and a fitness club voucher, seems good enough. The aggression

blunted.

The intertemporal comparison of courage leaves us with unanswered puzzles. How does the courage of

ancient Amber Road tradesmen differ from the courage of 18th century Dutch tulip growers? How does

the 15th century Medici bank, promoting first globalization ever in financial services industry, compares

to Fitzgerald’s Jay Gatsby mysterious boldness and infatuated determination? Finally, is the courage of

those greater than the courage of contemporary innovators and entrepreneurs, filled with generous EU

funds or academic grants, sheltered in incubators or under the wings of business angels? The access to a

revolving loan facility was an ordeal yet 20 years ago in the post-Soviet bloc, not mentioning the access

to venture capital or crowd funding.

Mr. Mrowiński says that the set of risks has altered diametrically over the last 30 years. ‘With the

absence of high-level political risks, entrepreneurs may concentrate on facing market risks. The rule of

thumb is easy: either you have a bulletproof business idea or not’. On the contrary, Mr. Golonko states

bluntly that he cannot visualize himself going into a new venture nowadays. ‘These days it was easy: I

sold a couple of golden rings in the bazaar and I had just enough money to buy the necessary machine. In

our time, I would be exhausted only after the loan application process itself’.

It is not much of a simplification to state that back in the 1990s, the only thing it took to become an

entrepreneur was to learn how to trade at a margin. I once heard an academic, recalling that his pretty

idealistic and naïve students did not want to solve case studies, which involved a scenario of lower

demand. ‘Come on, professor, there won’t be any demand issue – this country is a damn bottomless well

of demand’, they said. It soon turned out, however, that market saturation is not a purely theoretical

concept. Today’s businessman needs flexibility and resilience. All the rules that govern markets have

changed. All but one: only the best entrepreneurs survive.

Both Mr. Golonko and Mr. Mrowiński belong to an exclusive group of those, whose firms survived the

ups and downs of Poland’s 23-year independence. It is one of the very few traits they have in common,

though. The second one is optimism. Mr. Mrowiński, despite turning 60, believes his stationery firm has

bright prospects. Mr. Golonko, even though he has recently had to make many employees redundant,

bursts with confidence. His spirit for community service flourishes, too. He is getting ready to fight

against clumsy local administration for control over a devastated youth hostel nearby. He plans to

refurbish the building and restore it for the community. In totalitarian regimes, these are technocrats

who shape the reality. In open-market democracies, it is a red flag if reality shapers are not

entrepreneurs, and Mr. Golonko best embodies that truth.

Endangered species or endangered environment?

There is pittance social reward for being an entrepreneur. It is also not a healthiest job – it involves

struggles with inland revenue, inspections and unstable legislative environment. ‘I keep asking my

accountants for advice’, Mr. Mrowiński says. ‘What worries me is they are year by year less confident of

their recommendations’. The legal environment is difficult to comprehend even for experts in the field.

Being a go-getter attracted people because of freedom it ensured. Nowadays, freedom is no more a

distinguishing attribute of entrepreneurial profession. Coping with over-regulation, paperwork and

increased unrest of chronically underpaid employees has little to do with freedom. People willing to

make use of their courage, are discouraged. Neither by scarcity nor by market turbulences, but by the

legal provisions that severely diminish the manager’s right to manage. Out of the two, I believe we all

prefer action, creativity and courage to be promoted rather than inactivity, responsiveness and laziness.

Responding to the initial question: is the entrepreneur an endangered species? What is threatened is the

natural habitat of this species – the free market. It needs to be restored and this is conditioned by the

profound restructuring of prevailing economic systems. Cruel? Well, after all, according to Schumpeter,

entrepreneurship is nothing but creative destruction. And it was a well-thought through statement.

Bibliography:

Brinkerhoff, N. (2012) Majority of Americans would rather not work for the U.S. Government, but those

who do are satisfied, allgov.com, 6 December.

Lukoff, K. (2011) 50% of Top Chinese Engineering Students Want to Startup. 3% Do., techrice.com, 21

July.

Mojib, I. (2011) Living costs, a challenge, The Gulf Today (online edition), 16 March.

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Ng, G. (2012) Chinese grads picky despite job shortage, The Straits Times (online edition), 5 July.

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