Wednesday, September 27, 2017

Does It Matter If We Call Entrepreneurs Heroes?

Should society call entrepreneurs heroes? Are they like heroes from mythology? Those may seem like strange questions for an economist to ask. But they matter for several reasons. Dwight Lee and Candace Allen argued that if we don't honor entrepreneurial accomplishments, we won't get enough startups. Deirdre McCloskey says that economic growth only took off around the year 1800 because the West began according dignity to entrepreneurs. The work of entrepreneurs parallels the hero's adventure in mythology. The idea has been gaining attention recently, being discussed in The Wall Street Journal while Jeffery McMullen has called for scholars to once again take it seriously. Even Joseph Campbell, the author of The Hero With a Thousand Faces, one of the inspirations for Star Wars, called the entrepreneur the real hero in American capitalistic society in a radio interview (see appendix). 
            Cyril Morong was the first to examine the similarities between entrepreneurs and mythological heroes.[i],[ii] He compared entrepreneurship research to The Hero With a Thousand Faces to see if the activities of entrepreneurs corresponded to the hero's adventure. What is the hero's adventure? According to Campbell
"The standard path of the mythological adventure of the hero is a magnification of the formula represented in the rites of passage: separation-initiation-return, which might be named the nuclear unit of the monomyth. A hero ventures forth from the world of common day into a region of supernatural wonder; fabulous forces are there encountered and a decisive victory is won; the hero comes back from this mysterious adventure with the power to bestow boons on his fellow man."
How is this similar to the entrepreneur's adventure?
            The hero's journey begins with a call to adventure. He or she is awakened by some herald which touches his or her unconscious world and creative destiny. The entrepreneur, too, is "called" to the adventure. By chance, he or she discovers a previously unknown product or way to make a profit. The lucky discovery cannot be planned and is itself the herald of the adventure. Israel Kirzner sees successful entrepreneurship as result of a lucky discovery of a new opportunity for economic profit, but it is luck that was due to alertness while leading a life of purposeful action.[iii]
            The entrepreneur must step out of the ordinary way of producing and into his or her imagination about the way things could be to discover the previously undreamt of technique or product. The "fabulous forces" might be applying the assembly line technique or interchangeable parts to producing automobiles or building microcomputers in a garage. The mysterious adventure is the time spent tinkering in research and development. But once those techniques are discovered or developed, the entrepreneur now has the power to bestow this boon on the rest of humankind.
            Heroes and entrepreneurs both bring change. Campbell refers to the constant change in the universe as "The Cosmogonic Cycle" which "unrolls the great vision of the creation and destruction of the world which is vouchsafed as revelation to the successful hero." This is similar to Joseph Schumpeter's theory of entrepreneurship called “creative destruction.” A successful entrepreneur simultaneously destroys and creates a new world, or at least a new way of life. Henry Ford, for example, destroyed the horse and buggy age while creating the age of the automobile. The hero also finds that the world "suffers from a symbolical deficiency" and "appears on the scene in various forms according to the changing needs of the race." The changing needs and the deficiency correspond to the changing market conditions or the changing desires for products. The entrepreneur is the first person to perceive the changing needs.
            Candace Allen and Dwight Lee say that "society needs heroes" and that "entrepreneurs are heroes in every sense." Yet they are not often see as heroes-in fact the opposite seems to be true even though they are indispensable to economic progress. One problem is that economists have not generally promoted entrepreneurs as being important. They acknowledge that creative destruction was "the hallmark of entrepreneurship" without mentioning the parallel to Campbell. Entrepreneurs are motivated not just by money but also by "service to something transcendental."  Their views can be summed up with:
“Just as the society that doesn't venerate winners of races will produce fewer champion runners than the society that does, the society that does not honor entrepreneurial accomplishment will find fewer people of ability engaged in wealth creation than the society that does.”[iv]
            Dwight Lee and Candace Allen Smith covered similar ground in a later article but also used Campbell, notably the "separation-initiation-return" core of the monomyth (although they still missed the creation destruction connection between Campbell and Schumpeter). They suggest that entrepreneurs are seen negatively due to political biases and the fact that their role in capitalism is poorly understood.[v] Calling them heroes might offset this.
            Jeffery McMullen argues that seeing entrepreneurs as heroes doesn't mean that they are hyper-individualistic lone rangers, cutoff from the rest of society. They may receive some community support, but a new venture still requires someone to act, to take the first step. This requires courage due to uncertainty. They are heroic because they bear personal costs. McMullen also bases his observations on the work of Campbell and Schumpeter. He calls on scholars to end their hostility to calling entrepreneurs heroes. Otherwise, we are all "vulnerable to the tyranny of cautious conformity while subjecting our social systems to the constant threat of stagnation."[vi]
            Charles Murnieks, Jeffery McMullen, and Melissa Cardon also mention entrepreneurs being heroes (citing Campbell and Schumpeter). Using surveys, they found that entrepreneurs experienced positive emotions (PE) when they perceived that their self-identity as entrepreneurs matched that of society or their environment. That is, if the entrepreneurs saw themselves as risk-takers who enhance social welfare, and if the entrepreneurs thought that society saw them that way as well, positive emotions were experienced.
            Their empirical findings may support Allen and Lee's contention that society should honor entrepreneurial accomplishments:
"challenging environments are part of what makes a hero’s actions valiant. In a similar manner, we contend that dynamic environments may play a key role in framing an entrepreneur’s actions as courageous or innovative, because the individual is seen to act in the face of uncertainty and turbulence. Stakeholders (such as mentors, family members, or investors) who advise entrepreneurs should know and accentuate this point. By providing reaffirming feedback in dynamic and challenging environments, these stakeholders can elevate the PE experienced by the entrepreneur and motivate them to continue on their journey. In essence, this strategy can help separate the generation of PE from the success of the venture in some cases."[vii]
The "reaffirming feedback" is a way to honor the entrepreneur which motivates them to "continue on their journey."
            The idea that entrepreneurs might be heroes is now starting to reach the popular media. Barbara Haislip reported on how storytelling, especially about the founders, can be a marketing tool for businesses. She interviewed Angela Randolph of Babson College who said “Stories about founders and new innovations are often in the form of a myth and follow the hero’s journey.” Randolph then described the hero's journey as outlined in Campbell. Telling the founding story about "the hero’s call to action...pulls the audience in" if they can trigger "strong emotions."[viii]
            This question may be relevant now since entrepreneurship may be in decline. Jeffrey Sparshott reported that “the share of private firms less than a year old has dropped from more than 12 percent during much of the 1980s to only about 8 percent since 2010. In 2014, the most recent year of data, the startup rate was the second-lowest on record, after 2010.”[ix] Honoring and respecting the work of entrepreneurs might be a way to reverse this trend.[x]
            Also, historically, it may have only been when entrepreneurs became respected that economic growth took off. Deirdre McCloskey argues that what made the world so wealthy today, when average world income in 1800 was just $1 to $5 per day (adjusted for inflation)  was a change in ideas:
" Holland and then in England. The revolutions and reformations of Europe, 1517 to 1789, gave voice to ordinary people outside the bishops and aristocrats. Europeans and then others came to admire entrepreneurs..."
It was a "Middle-Class Deal" that gave entrepreneurs dignity and liberty to seek profit and generate social welfare. This led to a flurry of inventions, innovations and new institutions that made our modern world and therefore "the ordinary people, and especially the very poor, were made much, much better off." She even says "People had to start liking "creative destruction...""[xi]
            In fact, one of her books is titled Bourgeois Dignity: Why Economics Can’t Explain the Modern World. McCloskey writes
"that the modern world was made not by the usual material causes, such as coal or thrift or capital or exports or imperialism or good property rights or even good science, all of which have been widespread in other cultures and at other times."[xii]
McCloskey even credits "the Kirznerian entrepreneur [for allowing her] to make progress on the puzzle of economic growth." What is entrepreneurship? It is an "unhirable factor" or "alertness" and "can't be something that can be provided routinely, such as the services of banking or management. It must be creative."[xiii] Creativity comes from stepping outside the normal way of doing things, "jumping over the edge and moving into the adventure" (see the Campbell interview in the appendix). So the entrepreneur is just like the hero in mythology.[xiv]
Tape #1901: "Call of the Hero" with Joseph Campbell interviewed by Michael Toms. New Dimensions Foundation audio tape from a live interview on San  Francisco's radio station KQED. The following exchange was part of a discussion of the question of: What is creativity?
Toms: In a sense it's the going for, the jumping over the edge and moving into the adventure that really catalyzes the creativity, isn't it?
Campbell: I would say so, you don't have creativity otherwise.
Toms: Otherwise there's no fire, you're just following somebody else's rules.
Campbell: Well, my wife is a dancer. She has had dance companies for many, many years. I don't know whether I should talk about this. But when the young people are really adventuring, it's amazing what guts they have and what meager lives they can be living, and yet the richness of the action in the studio. Then, you are going to have a concert season. They all have to join a union. And as soon as they join a union, their character changes. (emphasis added, but Campbell changed the tone of his voice) There are rules of how many hours a day you can rehearse. There are certain rules of how many weeks of rehearsal you can have. They bring this down like a sledgehammer on the whole thing. There are two mentalities. There's the mentality of security, of money. And there's the mentality of open risk.
Toms: In other societies we can look and see that there are those that honor elders. In our society it seems much like the elders are part of the main stream and there is a continual kind of wanting to turn away from what the elders have to say, the way it is, the way to do it. The union example is a typical one, where the authority, institution, namely the union comes in and says this is the way it's done. And then one has to fall into line or one has to find something else to do.
Campbell: That's right.
Toms: And it's like treating this dichotomy between elders and the sons and daughters of the elders. How do you see that in relationship to other cultures?
Campbell: This comes to the conflict of the art, the creative art and economic security. I don't think I have seen it in other cultures. The artist doesn't have to buck against quite the odds that he has to buck against today.
Toms: The artist is honored in other cultures.
Campbell: He is honored and quickly honored. But you might hit it off, something that really strikes the need and requirements of the day. Then you've given your gift early. But basically it is a real risk. I think that is so in any adventure, even in business, the man who has the idea of a new kind of gift (emphasis added) to society and he is willing to risk it (this is exactly what George Gilder says in chapter three, "The Returns of Giving" in his book Wealth and Poverty). Then the workers come in and claim they are the ones that did it. Then he (the entrepreneur) can't afford to perform his performance. It's a grotesque conflict, I think between the security and the creativity ideas. The entrepreneur is a creator; he's running a risk.
Toms: Maybe in American capitalistic society the entrepreneur is the creative hero in some sense.
 Campbell: Oh, I think he is, I mean the real one. Most people go into economic activities not for risk but for security. You see what I mean. And the elder psychology tends to take over.
This discussion ended and after a short break a new topic was discussed.

[i] Cyril Morong, "The Creative-Destroyers: Are Entrepreneurs Mythological Heroes?" (Presented at the annual meetings of the Western Economic Association, July), 1992, available at:
Cyril Morong, "The Calling of the Entrepreneur," The New Leaders: The Business Bulletin for Transformative Leadership, November/December 1992, p. 4, available at:
Cyril Morong, "Mythology, Joseph Campbell, and the Socioeconomic Conflict,” The Journal of Socio-Economics, Volume 23, No.4, Winter 1994, pp. 363-382, available at:
[ii] Wyn Wachhorst in Thomas Alva Edison: An American Myth (Cambridge, MA: MIT Press, 1981), pp.74-86, uses Joseph Campbell's book The Hero With a Thousand Faces to analyze part of Edison's early life, although Wachhorst suggests that Edison might have been more trickster than hero. Wachhorst quotes David McClelland from The Achieving Society with: "Interestingly, David McClelland found that Hermes, the trickster of the Greek pantheon, is the mythological type which best reflects the "achievement personality [of entrepreneurs]."" Morong (1992a) also mentions tricksters. The word entrepreneur does not appear in the index of the Edison book. So Wachhorst probably did not look at any research on entrepreneurs in general. He did not mention Schumpeter and creative destruction, either. Wachhorst often compares Edison to Prometheus, suggesting that using electricity is like stealing fire.
[iii] Israel Kirzner, Perception, Opportunity, and Profit (The University of Chicago Press, 1979), p. 163, 181.
From personal correspondence with Israel Kirzner he writes "I should point out in my own treatment of the entrepreneur, he is not seen as a "hero." Moreover, in my own treatment pure luck is not seen as entrepreneurial. (but as the act of deliberately putting oneself into a situation which one hopes will prove lucky is entrepreneurial)." It is my contention that the best way for a person to put themselves into a situation in which they will be lucky is for them to follow Campbell's advice that is based on his analysis of the hero's adventure. This is to follow your bliss, to listen to the wisdom of your heart and do what you love, not what the social system would have you do. If you follow your bliss, you are a hero. I believe that the most successful entrepreneurs follow their bliss and are therefore heroes. Jeffery McMullen (cited below) also mentions that entrepreneurs follow their bliss.
Joseph Schumpeter, The Theory of Economic Development (New Brunswick, NJ:Transaction Books, 1983), p. 923 lists three classes of motives for entrepreneurship: the will to found private kingdom, the will to conquer, and the joy of creating. The first, although seemingly only greedy, ranges, however, from "spiritual ambition down to mere snobbery." The second was like a sporting event, with money used to keep score, and not an end in itself. The entrepreneur of the third class of motives is in it for the sake of "exercising one's energy and ingenuity" and for the delight in venturing. All three classes of motives are anti-hedonistic, with the third being the most so. This certainly makes it plausible to see the entrepreneur as someone who follows his or her bliss.
[iv] Candace Allen and Dwight Lee, "The entrepreneur as hero," Journal of Private Enterprise, Volume 12, No. 1, Fall 1996, pp. 1–15.
[v] Dwight Lee and Candace Allen Smith,  “The Entrepreneur on the Heroic Journey,” The Freeman, Vol. 47 No. 4, April 1997, available at:
[vi] Jeffery McMullen, "Are we confounding heroism and individualism? Entrepreneurs may not be lone rangers, but they are heroic nonetheless," Business Horizons, Volume 60,          Issue 3, May–June 2017, pp. 257–259.
[vii] Charles Y. Murnieks, Jeffery S. McMullen, and Melissa S. Cardon, "Does Congruence with an Entrepreneur Social Identity Encourage Positive Emotion Under Environmental Dynamism?" Journal of Small Business Management, 27 February 2017, doi:10.1111/jsbm.12335, abstract available at:
[viii] Barbara Haislip, "Tell Me a Story," The Wall Street Journal, May 1, 2017, page R8, available at:
[ix] Jeffery Sparshott, "Sputtering Startups Weigh on U.S. Economic Growth," The Wall Street Journal, October  23, 2016, available at:
[x] Allen and Lee (1996) mention that "during the 1980s almost 90 percent of all business characters on television were portrayed as corrupt." It does not seem like there are many movies or TV programs even now that show entrepreneurs in a positive light.
[xi] Deirdre McCloskey, "Liberty and Dignity Explain the Modern World": An Essay Based on Bourgeois Dignity: Why Economics Can't Explain the Modern World, November 2011, available at:
[xii] Deirdre McCloskey, "Ideas, Not "Capital," Enriched the World," March 19, 2016, available at:
[xiii] Deirdre McCloskey, "A Kirznerian Economic History of the Modern World,"  June 17, 2011, available at:
[xiv] McCloskey also writes that the growing freedom and increasing respect for entrepreneurs "created more and more opportunities for Kirznerian alertness." Furthermore "Austrian discovery and creativity depends also on the other virtues, in particular on Courage and Hope" and "A new rhetorical environment in the eighteenth century encouraged (literally: "gave courage" to the hope of) entrepreneurs." She does, however, see a weakness in that Kirzner does not consider the audience of the entrepreneur, the customers and the rhetoric they use.

Sunday, September 17, 2017

New Book Attempts To Bring Economics And Literature Together

Adam Smith did not believe people are merely economic maximizers. Instead, we balance self-interest with humane sympathy for others. Deirdre N. McCloskey reviews ‘Cents and Sensibility’ by Gary Saul Morson and Morton Schapiro.

See Economics With a Human Face from The WSJ. Excerpts:
"economics—a hugely influential approach to studying human societies—isn’t worth all that much without first understanding what it means to be human.

Mr. Morson is a professor of Slavic literature at Northwestern University, and Mr. Schapiro teaches economics there"

"Economics, they argue, has been stripped down to a theory neglecting language and culture. At the same time, literary study has abandoned its responsibility to lead students to the best that has been thought and said. The humanities, Messrs. Morson and Schapiro contend, should acknowledge economics for worldly purposes. Yet for a truly human science the economists need literature, philosophy and history. Each discipline can supply what the other lacks."

"The real Smith observes that human beings summon qualities of sympathy balanced with their self-interest. People are not merely economic maximizers: They are ethical creatures from the get-go."

"Messrs. Morson and Schapiro advocate a fusion the economist Bart Wilson and the Nobelist Vernon Smith have recently dubbed “humanomics.” The humanities study categories, and the initial step of categorization is essential to any human inquiry."

"You can’t measure gross domestic product or unemployment without first saying what they are, qualitatively, as categories of interest to humans."

"There is no God-term telling us from the outside what categories humans care about. Economics, physics, biology, history—all need the first, humanistic, categorizing step."

Thursday, August 10, 2017

Is Storytelling Important For The Economy?

"It's the economy, stupid"-James Carville, strategist for Bill Clinton in the 1992 presidential campaign

"The human mind is a story processor, not a logic processor."-from the book The Righteous Mind: Why Good People Are Divided by Politics and Religion by social psychologist Jonathan Haidt.

Wouldn't it be great if there was a blog that looked at the intersection of the economy and storytelling or mythology? Well, there is! See Dollars and Dragons.

Here is one example of how storytelling and economics come together. See Giving Your Brand Primal Power Through Storytelling by Nick Nanton & JW Dicks. Excerpt:

"At our agency, we make what we call “story-selling” an essential component of our branding efforts with our clients. We’ve seen firsthand that, when you create the proper story, you’ve done most of the heavy lifting required to build a successful brand.

The question, though, is why--why do stories have such “primal power” when it comes to influencing an audience?

It turns out there’s a perfectly good scientific explanation: Stories affect us on both on an incredibly deep intellectual and emotional level that we are just beginning to understand.

That quest began when scientists discovered that fictional stories affected the same region of the brain that reacts when we ourselves are engaged in real-life drama. Stories create a bonding empathy which causes us to strongly identify with the made-up protagonist, as if we were, in fact, that person. In other words, stories have such impact because our brains actually get a little mixed up as to what’s real and what’s not."
There is also a great book out there called The Storytelling Animal: How Stories Make Us Human by Jonathan Gottschall. Here is the review I wrote at Amazon:

"If you liked "The Moral Molecule" by Paul Zak, "The Righteous Mind" by Jonathan Haidt or "The Power of Myth" by Joseph Campbell, you will probably like this book, too. It would be worthwhile if only for the anecdotes. The explanation about how a scientist proved that cats dream. Or that going to an opera greatly influenced Hitler. You want to keep reading. You never grow tired of it. How stories are a deeply inherent part of our nature is entertainingly explored. Stories affect business and economics because CEOs and brands need to tell a story. The role that evolution played in making stories important is explained. His theories and conclusions are supported by science. But it is still enjoyable. Gottschall himself is a good story teller. I love the line about stories being the flight simulators for life. The moral and socials role of stories are also explored. But stories are personal, too. We each have a story we tell ourselves. As Jung said, we should all try to discover what myth we are living by. Books like this should help us out on that quest."
A related post is Economists Love Fables And Parables (Or, What Is The Essence Of Economic Analysis?)

Wednesday, August 9, 2017

Mike Wittenstein on Storytelling and branding

How to Dramatically Improve Your Personal Branding from a Master Storyteller. From The Freelancer Community Magazine.

"One of the most important things to get right as a Freelancer is to establish a personal brand.
Not everyone can devote a ton of time fumbling through strategies on personal branding. Especially when your time is spent doing the technical work at hand.

Luckily, there are simple and clear ways to help improve every blogpost to better market and sell the product and services you offer.

In our social media age with Facebook, Twitter, Instagram, LinkedIn and even SnapChat, big brands are leveraging these channels to tell their stories and to engage with their audiences to increase impressions.

One of the great things about the time we live in is that the medium that big brands like General Mills or publications like Vice Media are also available to Freelancers like us.

I believe that’s the primary reason why Freelancing, Digital Nomads and Independent Contractors are able to live remotely and still run their businesses no matter where they are.

In this great levelling between big budget marketing departments and the Solopreneur who would have the same reach and influence using social media and a personally set up website, it matters less about the medium and way more about what you say and don’t say.

And it goes without saying that “content is truly king”.  What you say, how you say it, how you tell your story is what makes a difference in affecting an emotion in your clients and prospects.

We Are Creatures Craving Stories

One of the the leaders and influencers in this space has been Storyminers, founded by Michael Wittenstein.  Mike’s core worldview is that the art and science of storytelling can massively support business owners and executives in telling their companies’ stories.  The stories that are uncovered through discovery serve as the identify of their business and translate down to the customers’ experience and the interaction with the brand, products and services.  At the end of the day, no matter how much money you have in your marketing budget, no matter who is your superior in your corporate hierarchy, the customer should be your ‘north star’.

This is what Mike and Storyminers does well:
“Mike Wittenstein advises leaders on how changes to their customer experiences can positively transform their brand narratives and their bottom lines. He is the managing partner at Storyminers, a design pioneer and developer of unique methods and tools for enhancing front-line customer experiences—and the only individual to hold top earned designations as a consultant (CMC), speaker (CSP), and customer experience expert (CCXP).”

In this in-depth interview with Mike, we asked him what the top Freelancers, Digital Nomads and Solopreneurs are doing and how they should be telling their story in order to maximum their efforts in personal branding.

Question 1: In your experience with supporting SMBs, Solopreneurs and Freelancers to come up with a better story and value proposition for their business, what would you say people most overlook during this process?

The most important thing to remember when sharing your story is to tell it from your future customer’s perspective. The value of your company and your personal abilities will connect more if it starts with the problems, struggles, hopes, and details of your future client’s situation.

For example, instead of saying “OUR Company offers the best website design around.”, consider “If you’re looking for a group with superpower listening skills that can turn what you say into a website that will turn heads, call OUR Company.” Can you feel the difference? Before saying that you’re good, explain the value you offer and how you’re good.

Question 2: Digital Nomads are fast becoming part of this “gig economy” and “sharing economy”. In this world where there are more people working for themselves, do you think using “story” is ever more important? If so, why?

Your story is what distinguishes you from all the other digital nomads. It doesn’t have to be the loudest, the prettiest, or the most provocative. But, it does have to be yours and you have to own it. Your story should feel natural and authentic to you. If it does, it will connect faster with your future clients.

Stories are better than traditional marketing communications because they can foster deeper connections. A good story should give people a feeling for you – your values, your principles, and the anticipation that working with you will be fulfilling and the results positive.

For example: if you are asked “Why should I/we hire you?”, you might reply “Well, several of my other clients in situations very much like yours have told me that they appreciate how quickly I zoom in on just the right issues. I’ve also heard that they like how I honor their principles and keep their internal teams energized. Oh, I can also inspire you with my HTML.” Whether you like this answer or not, don’t you get a distinct feeling of the person sharing it? That’s the power of story.

Question 3: For a person who is a 9-to-5 employee looking to break out on their own, what would you say is the ‘story’ they need to have drafted before they make the leap into freelancing?

A self-starter freelancer should have three stories:
 1. The story of a customer’s or client’s situation that you can help with
 2.  The story of what it’s like to work with you, and
 3. The story of you – you made yourself who you are, your values, and how recent changes are part of what makes you the best you that ever has been."

Sunday, June 25, 2017

Wyn Wachhorst's Thomas Alva Edison: An American Myth

Click here to go to the Amazon page for this book.

Wachhorst is an historian and this 1981 book was well received. When I wrote my papers on entrepreneurs as heroes in 1992, I had not heard of it. But I discovered it years later (2007) doing a google search. Wachhorst uses Joseph Campbell's book The Hero With a Thousand Faces to analyze part of Edison's early life, although Wachhorst suggests that Edison might have been more trickster than hero. This is covered in a thirteen page section called "Edison's Night Journey." Very fascinating to read.

Here are some of the concepts that come up, many of which I used in comparing entrepreneurs to heroes:

Psychic symbolism
Archetypal dreams
The separation-initiation-return pattern of the adventure
The hero returning with a book for society
Shades of supernatural origins
The call to adventure
A protective figure (an old crone-mentor is not mentioned)
Threshold guardian
Belly of the whale
Road of trials (although Wachhorst says that these, for Edison, were minor or over dramatized)
Awakening from the night journey
Reentry to the everyday world
He gets compared to the tricksters Hermes and Prometheus (using electricity like stealing fire-Prometheus gets mentioned many times in the book)
Edison was the "apotheosis of barnyard tinkering"

Wachhorst quotes David McClelland from The Achieving Society with:

"Interestingly, David McClelland found that Hermes, the trickster of the Greek pantheon, is the mythological type which best reflects the "achievement personality.""

In one of my papers I also mention tricksters.

The word entrepreneur does not appear in the index of the Edison book. So I don't think Wachhorst looked at any research on entrepreneurs in general. Schumpeter and creative destruction don't get mentioned. Schumpeter said creative destruction is the essential nature of capitalism.

Campbell has  a  section  called "The Cosmogonic Cycle" which "unrolls the great  vision  of  the  creation  and  destruction of   the   world   which   is   vouchsafed   as revelation  to  the  successful  hero"

That is why I called one of my papers "The Creative-Destroyers."Wachhorst does call Edison "father of the electrical age." One could possibly assume that Edison created this new age and therefore destroyed the previous age. In my papers I talk about how Henry Ford created the automobile age and destroyed the horse and buggy age.

Wachhorst does not mention the radio interview when Campbell said entrepreneurs were heroes.

Friday, June 23, 2017

The Wall Street Journal Recognizes That Entrepreneurs Might Be Like Heroes From Mythology

An Entrepreneur’s Story Can Be the Perfect Marketing Tool But the startup’s tale has to grab customers. Here’s how. By Barbara Haislip of the WSJ. She spoke to Angela Randolph, assistant professor at Babson College. Excerpts:
"Effective business narratives tap into old archetypes of storytelling that go all the way back to the earliest tales of mythology. “Stories about founders and new innovations are often in the form of a myth and follow the hero’s journey,” says Dr. Randolph.

Like the heroes of classic tales, she says, the company founder is going about a normal life when they run into a problem that interrupts it. After this call to action, the founder undergoes trials that must be overcome—and along the way transforms into a leader and the idea turns into a product, service or revolutionary change. Then the founder returns to “normal” life as an entrepreneur with a product or service for society.

Founders should keep that structure in mind when coming up with their own narrative, she says, and then highlight important points.

“Strong emotions can be triggered during the hero’s call to action. For example, if the product is the result of a family member being injured or dying, the strong, sad emotions associated with the tragedy are the strong call to action that pulls the audience in,” she says. Also highlight “favorable characteristics that founder exhibited during the trial and/or the new characteristics that are the result of the trials.”"

But this all just says what I had said in my work back in 1992. I wrote a paper called "The Creative-Destroyers: Are Entrepreneurs Mythological Heroes?" It compares the entrepreneur in capitalism to the hero in mythology. I was never able to get it published in an academic journal. One referee even said the idea was dangerous. I doubt much harm would have befallen the U.S. economy had this paper been published. It is now online at

Creative Destroyers

A shorter version is at

Shorter Version

The shorter version is titled “The Calling” of the Entrepreneur (Published   in The   New   Leaders:   The   Business   Bulletin   for   Transformative   Leadership,  November/December 1992.)

Friday, June 2, 2017

How Odysseus Started The Industrial Revolution

Factory work may have been a commitment device to get everyone to work hard. Odysseus tying himself to the mast was also a commitment device. Dean Karlan, Yale economics professor explains how commitment devices work:

"This idea of forcing one’s own future behavior dates back in our culture at least to Odysseus, who had his crew tie him to the ship’s mast so he wouldn’t be tempted by the sirens; and Cortes, who burned his ships to show his army that there would be no going back.

Economists call this method of pushing your future self into some behavior a “commitment device.” [Related: a Freakonomics podcast on the topic is called "Save Me From Myself."] From my WSJ op-ed:
Most of us don’t have crews and soldiers at our disposal, but many people still find ways to influence their future selves. Some compulsive shoppers will freeze their credit cards in blocks of ice to make sure they can’t get at them too readily when tempted. Some who are particularly prone to the siren song of their pillows in the morning place their alarm clock far from their bed, on the other side of the room, forcing their future self out of bed to shut it off. When MIT graduate student Guri Nanda developed an alarm clock, Clocky, that rolls off a night stand and hides when it goes off, the market beat a path to her door."
 See What Can We Learn From Congress and African Farmers About Losing Weight?

Something like this came up recently in the New York Times, in reference to factory work and the Industrial Revolution. See Looking at Productivity as a State of Mind. From the NY Times, 9-27. By SENDHIL MULLAINATHAN, a professor of economics at Harvard. Excerpts:
"Greg Clark, a professor of economics at the University of California, Davis, has gone so far as to argue that the Industrial Revolution was in part a self-control revolution. Many economists, beginning with Adam Smith, have argued that factories — an important innovation of the Industrial Revolution — blossomed because they allowed workers to specialize and be more productive.

Professor Clark argues that work rules truly differentiated the factory. People working at home could start and finish when they wanted, a very appealing sort of flexibility, but it had a major drawback, he said. People ended up doing less work that way.

Factories imposed discipline. They enforced strict work hours. There were rules for when you could go home and for when you had to show up at the beginning of your shift. If you arrived late you could be locked out for the day. For workers being paid piece rates, this certainly got them up and at work on time. You can even see something similar with the assembly line. Those operations dictate a certain pace of work. Like a running partner, an assembly line enforces a certain speed.

As Professor Clark provocatively puts it: “Workers effectively hired capitalists to make them work harder. They lacked the self-control to achieve higher earnings on their own.”

The data entry workers in our study, centuries later, might have agreed with that statement. In fact, 73 percent of them did agree to this statement: “It would be good if there were rules against being absent because it would help me come to work more often.”"
The workers, like Odyssues, tied themselves to the mast to resist the temptation of slacking. This made it possible for factories to generate the large output of the Industrial Revolution.

Some economists have written a paper called TYING ODYSSEUS TO THE MAST: EVIDENCE FROM A COMMITMENT SAVINGS PRODUCT IN THE PHILIPPINES. By Nava Ashraf, Dean Karlan, and Wesley Yin in The Quarterly Journal of Economics in 2006. Here is the abstract:
"We designed a commitment savings product for a Philippine bank and implemented it using a randomized control methodology. The savings product was intended for individuals who want to commit now to restrict access to their savings, and who were sophisticated enough to engage in such a mechanism. We conducted a baseline survey on 1777 existing or former clients of a bank. One month later, we offered the commitment product to a randomly chosen subset of 710 clients; 202 (28.4 percent) accepted the offer and opened the account. In the baseline survey, we asked hypothetical time discounting questions. Women who exhibited a lower discount rate for future relative to current trade-offs, and hence potentially have a preference for commitment, were indeed significantly more likely to open the commitment savings account. After twelve months, average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group. We conclude that the savings response represents a lasting change in savings, and not merely a short-term response to a new product." 

Tuesday, May 30, 2017

How Storytelling Can Shape the Corporate Brand and Culture

By Jay Gronlund.
"Technology has transformed our world into a data-obsessive circus where information is unbelievably accessible, connectivity is constant, and unpredictable events always surprise and engulf us. Call this extreme clutter and volatility. With so much information and multi-tasking surrounding us, it has become a challenge to restore simplicity, clarity and focus in our communications. These excessive conditions provide the main impetus for the re-emergence of storytelling for inspiring, engaging and connecting to others.

Storytelling is ageless and remains the most powerful form of persuasion. Socrates recognized the value of storytelling, so did Aesop, Jesus, Muhammad, Confucius and even Mark Twain. Today the power of storytelling has been scientifically proven:

    Neuroscientists have shown that the brain was built to wander on average over 1,000 times per day (e.g. including daydreams). They also found that storytelling stops this wandering and engages the listener (they call this “neuro-coupling”).

    Bruce Perry, an expert on brain development, says that “neural systems fatigue quickly, actually within 4-8 minutes, and become less responsive,” but can be stimulated and sustained by storytelling.

    Artificial Intelligence specialists have been studying how our brain actually works, especially how we file and store all this information that the brain absorbs every day. They discovered that the brain does not process information in “files” (e.g., like a computer program). As an example it sorts information from a PowerPoint presentation in a way that the first and last items on a list are usually remembered (also any item that has an emotional impact), and the rest is discarded as “trash” and never retrieved. Instead, the brain more effectively files and retrieves information when there is a context, as in the form of a story.

    Reinforcing this discovery, author and marketing professor Jennifer Aaker from Stanford notes that people remember stories as much as 22 times more than they do facts alone.

So what can storytelling do to improve communications, process our changing world, and especially help shape a corporate brand and culture? Vibrant leaders now recognize that storytelling can create an emotional connection, which is the heart of good branding. It engages listeners emotionally, creates empathy, and inspires action. Importantly, neuroscience has also concluded that humans are more likely to make decisions based on emotions, not rational thinking.

Our world is changing dramatically and so leaders are more challenged than ever to adapt to such a groundswell of populist trends, technological advances, declining trust in the establishment, globalization, growing uncertainty (particularly with the incoming Trump administration), and fundamentally what a corporation should stand for today. All these changes can affect a corporate brand and culture, so it is incumbent for a CEO to explain and especially inspire support for any updates on its corporate values and strategy. Simply using words and sharing data with customers and employees can be too cerebral and esoteric, but using storytelling to communicate “who we are,” “what we have learned,” and “why we are changing” will be far more captivating and motivating. Storytelling describes a journey and is ideal for meaningful change.

For millennials, storytelling represents an ideal form of communication. This “first digital generation” thrives on social media, which is different from traditional media mainly in that it involves a one-on-one conversation that begs for engagement, versus the one-to-many in mass marketing. Many older managers don’t understand or even resent the independent, restless, unpredictable tendencies of millennials. However, millennials represent a huge opportunity for creativity and innovative ideas, so they should not be ignored. They do want to learn and respect experience, albeit sometimes in trying ways, but the key to maximizing their potential is to engage them. And this is what storytelling does.

More companies today are using storytelling to recruit and train new employees–Apple, IBM, 3M, Nike, Coca Cola, Disney, Microsoft, NASA, and other forward-thinking organizations. In addition, as social media becomes more mainstream for advertising, they are using storytelling to engage prospective customers in blogs, videos, newsletters, content branding, and other digital communication vehicles.

Millennials simply don’t trust traditional advertising–95% rely on feedback from friends for purchase decisions instead and find stories much more credible and trustful for learning about products. Storytelling is also ideal for young entrepreneurs who focus more on cost-efficient digital media and realize that stories about their personal experience can create a strong emotional connection.

To update a corporate culture and strengthen a brand, one must learn more about the types of stories that will work, depending of course on the audience and their aspirations, the different situations (e.g., for a new leader, change in direction, new challenges, etc.) and the various nuances for making a story credible, compelling and emotionally engaging. But it all starts with a recognition of the power of storytelling in communications.

Jay Gronlund is President, founder of The Pathfinder Group, a business development firm specializing in emotional branding, ideation facilitation and international expansion. His background has focused mainly on marketing and new product development with executive positions at reputable companies in the US and abroad – Richardson Vicks/P&G, Church & Dwight, Seagram and Newsweek. Jay has also been teaching a branding course at NYU since 1999 and recently wrote a book on the “Basics of Branding”, published by Business Expert Press. Jay has a BA from Colby College and MBA from Tuck at Dartmouth (see for previous articles and blogs."

Wednesday, May 24, 2017

Nobel Prize winning economist Robert Shiller: Explanations of some economic events can be found in sociologically important narratives, not the conventional data favored by economists

See How Tales of ‘Flippers’ Led to a Housing Bubble in the NY Times. He has written several articles  on this issue.  But to see an opposing view to the use of narrative in this way, see Heterodoxy at the AER by economist Scott Sumner. Excerpts:
"Real home prices rose 75 percent from February 1997 to December 2005, according to the S&P/Case-Shiller National Home Price Index, corrected for inflation by the Consumer Price Index. And then, from 2005 to 2012, real prices reversed course, falling to just 12 percent above their 1997 level. In the years since 2012, they have climbed 29 percent, about halfway back to their 2005 peak."

"The problem for economists is that these changes don’t correspond to movements in the usual suspects: interest rates, building costs, population or rents. The Consumer Price Index for Rent of Primary Residence, compiled by the United States Bureau of Labor Statistics and corrected for inflation, went up only 8 percent in 1997 to 2005, so unmet demand for housing services can’t explain the huge increase in real home prices. It doesn’t explain the 29 percent rise in real home prices since 2012 either, because inflation-adjusted rents increased only 10 percent in that period."

"I believe the price swings have something to do with the changing mentality of the times, changes caused by narratives that have gone viral and swept across the population. Looking for answers in such popular stories contrasts starkly with the prominent approach of modeling people as though they react logically to economic forces."

"The prevalent narratives of 1997 to 2005 did not include the concept of a housing bubble, not at first. A computer search using ProQuest or Google Ngrams shows that the phrase “housing bubble” was hardly used until 2005"

"during the 1997 to 2005 boom there were multitudes of narratives about smart investors who were bold enough to take a position in the market. To single out one strand, recall the stories of flippers who would buy a house, fix it up, and resell it within months at a huge profit. These stories appear to have been broadly exciting to people who didn’t flip houses themselves but who appear to have begun to think that stretching a little and buying a house with a large mortgage would make them wise investors.

In his book “The Complete Guide to Flipping Properties,” published in 2004, Steve Berges extolled what he called “the O.P.M. principle,” meaning “other people’s money.” He wrote, “Your objective is to control as much real estate as possible while using as little of your own capital as possible.” In other words, borrow as much as you can. He wrote about the upside of leverage but not about the perils of leverage during the kind of big price drops that were just around the corner."
See also The Role of Narratives in Economics: Narratives are vectors of ideas. Nobel laureate Robert Shiller suggests that in the age of social information networks, economists need to rethink how and why information really spreads by Prateek Raj of The Stigler Center's Pro Market blog.