Podcasts about e4b

Austrian economics recognizes change as a constant and provides guidance for adapting to it and managing it. Change is changing for business — it's faster and more fundamental in the digital age. Austrian economics can help even more as a result of its practical and realist approach to adaptation and continuous adjustment. Knowledge Capsule Change is changing. Change is a constant. You can think of the market in constant flux, as Mises did, You can think in terms of VUCA — volatility, uncertainty, complexity, and ambiguity. You can think of it in terms of complexity or of absolute uncertainty. However you tune your mind and your business processes, there are always going to be more things that can happen than you can predict or prepare for. There are some ways to think better about ceaseless change, however. One is to bucket the major themes or corridors of change, to organize your thinking and make some judgments about where and how to act and adapt. By recognizing these multiple types of change, businesses will be better prepared for adaptive action. Our E4B guest Phil Simon has studied change in the workplace and recently published a new book titled The Nine — about nine tectonic forces that are reshaping business and the workplace where we conduct business. He advises businesses to be alert to the changing nature of change in the digital age. People are changing. The people you hire today and the people already working at your firm are not the same people as they were just a couple of years ago. They've been through a new, different and challenging experience of working through the Covid-19 pandemic, and they've been working with new technologies, in new places (i.e., working remotely) and they've been questioning how they relate to work, to their colleagues, and to the firm. Don't expect them to be unchanged in their mindsets, attitudes, and work practices. The nature of the employment relationship is different today — less formal, less rigid, less standardized. Phil Simon uses the term “empowered employees” — employers must be empathic in understanding their new mental model as it relates to work. The workplace is changing. The workplace is no longer a physical space where people congregate to collaborate on work tasks, but a digital space of networked people, machines and software. New software and new machines are evolving all the time in this space, changing our relationship to it and to work. People are not going to go back to the office as the standard method of getting business done. If you want to have a physical space for people to meet in person, it must be reconfigured to support those business activities that can only be done in person, and not just as a standard structure of cubicles, offices and wiring. People must feel that there is more or better productivity to be enjoyed in the physical shared space than can be realized elsewhere. The structure of work is changing. Phil's book includes a section on fractions: the idea that firms no longer need full-time access to a necessary business skill — like finance and accounting — via contracting with individuals for 100% of their worktime. New organizational models are emerging that utilize fractional access to these skills as needed. There are fractional CFOs and CMOs and CTOs. There are highly qualified experts available via sharing platforms; they can be both the best at what they do and the best fit for your firm's need, available for a percentage of their time, not all of it. This thinking about fractional talent and skill utilization is becoming a more integral part of organizational thinking. Automation is universally available. Some level of automation is coming to every workplace. It's approaching with greater speed and intensity today. It's best to think of automation in terms of outcomes: what needs to get done and can it be done in a more automated fashion? What needs to be produced (Phil cites automated pizza making machines)? What processes are taking up people's time (Phil cites automation in payment systems)? What jobs can be totally automated (e.g., driving trucks)? What departmental functions can be fully automated (like content moderation at Twitter)? All businesses should be reviewing all their activities at all these levels and asking where automation can eliminate waste, save time and release resources for greater productivity. Whether it's as simple as calendaring software or as complex as robotic process automation, it's right to examine every opportunity and find an automated solution. A.I. Is going to help. The rapid adoption of ChatGPT has opened many eyes to the possibilities of getting smart assistance to change and improve the way work is done. ChatGPT can help develop content, make plans, find data, write code, make summaries of libraries of documents, and assist in many many more tasks — as exhibited by the many ChatGPT threads on twitter that are full of new ideas. The great breakthrough of ChatGPT lies in making available the vast majority of available knowledge on virtually all topics in a convenient, conversational way. Businesses are the results of their accumulated, shared and applied knowledge. ChatGPT and similar AI's amplify knowledge and accelerate learning. Businesses that don't utilize this availability will fall behind their competitors. There will be new software environments. Software and platforms are two parts of the work environment that are changing fast. Whether we work on Zoom or Slack or Teams or Github or Salesforce, we continuously encounter new upgrades and functions as well as new alternatives. There is no alternative to earning the skills to utilize these tools to their greatest productive effect, and to keep our learning updated. One economic function that is not improving amidst content change is trust. We can't be sure, sometimes, about the other party we're talking to or collaborating with, we can't be sure of trusting data, we can't be sure that our privacy and property rights are protected. Phil made the prediction that blockchain, as a secure record of all transactions and un-hackable repository of data and information, will play a bigger role in our business future as an arbiter of trust. For example, this may be where our individual health records might reside, which individuals would own, and which they could share and use for their own benefit in navigating the regulated opacity of the healthcare system. Subjectivism and empathy will always play important roles. Phil made a reference to “unhealthy analytics”. His point was that we are now in a position to measure more and more human action and human behavior, but that measurement does not necessarily provide insight, and may even give rise to perverse incentives. For example, it's possible to measure when employees checked in to the office and when they left, but it's not equally possible to monitor their productivity or motivation. It's possible to measure the number of hours they spend on Zoom, but a different problem to measure their remote contributions. Analytics have their place, but understanding and empathizing with employees, and carefully constructing their mental models in order to be able to appeal to them and stimulate them, remain subjective, emotionally-based skills which are still a critical component of management. Steer into the skid. How do founders, owners, and managers deal with these changes? Phil's expression is to steer into the skid. Reimagine work, embrace the powerful new technologies that are available, and be willing to experiment — perhaps in ways that others aren't — to generate the active learning that moves organizations forward. It might be messy, and even feel chaotic, but it's the right response to tectonic change. Expect some turbulence, while being open to infinite new possibilities. Additional Resources The Nine: The Tectonic Forces Reshaping the Workplace by Phil Simon: Mises.org/E4B_215_Book PhilSimon.com — Expertise on workplace collaboration and technology Phil Simon on LinkedIn: Mises.org/E4B_215_LinkedIn

Austrian economics recognizes change as a constant and provides guidance for adapting to it and managing it. Change is changing for business — it's faster and more fundamental in the digital age. Austrian economics can help even more as a result of its practical and realist approach to adaptation and continuous adjustment. Knowledge Capsule Change is changing. Change is a constant. You can think of the market in constant flux, as Mises did, You can think in terms of VUCA — volatility, uncertainty, complexity, and ambiguity. You can think of it in terms of complexity or of absolute uncertainty. However you tune your mind and your business processes, there are always going to be more things that can happen than you can predict or prepare for. There are some ways to think better about ceaseless change, however. One is to bucket the major themes or corridors of change, to organize your thinking and make some judgments about where and how to act and adapt. By recognizing these multiple types of change, businesses will be better prepared for adaptive action. Our E4B guest Phil Simon has studied change in the workplace and recently published a new book titled The Nine — about nine tectonic forces that are reshaping business and the workplace where we conduct business. He advises businesses to be alert to the changing nature of change in the digital age. People are changing. The people you hire today and the people already working at your firm are not the same people as they were just a couple of years ago. They've been through a new, different and challenging experience of working through the Covid-19 pandemic, and they've been working with new technologies, in new places (i.e., working remotely) and they've been questioning how they relate to work, to their colleagues, and to the firm. Don't expect them to be unchanged in their mindsets, attitudes, and work practices. The nature of the employment relationship is different today — less formal, less rigid, less standardized. Phil Simon uses the term “empowered employees” — employers must be empathic in understanding their new mental model as it relates to work. The workplace is changing. The workplace is no longer a physical space where people congregate to collaborate on work tasks, but a digital space of networked people, machines and software. New software and new machines are evolving all the time in this space, changing our relationship to it and to work. People are not going to go back to the office as the standard method of getting business done. If you want to have a physical space for people to meet in person, it must be reconfigured to support those business activities that can only be done in person, and not just as a standard structure of cubicles, offices and wiring. People must feel that there is more or better productivity to be enjoyed in the physical shared space than can be realized elsewhere. The structure of work is changing. Phil's book includes a section on fractions: the idea that firms no longer need full-time access to a necessary business skill — like finance and accounting — via contracting with individuals for 100% of their worktime. New organizational models are emerging that utilize fractional access to these skills as needed. There are fractional CFOs and CMOs and CTOs. There are highly qualified experts available via sharing platforms; they can be both the best at what they do and the best fit for your firm's need, available for a percentage of their time, not all of it. This thinking about fractional talent and skill utilization is becoming a more integral part of organizational thinking. Automation is universally available. Some level of automation is coming to every workplace. It's approaching with greater speed and intensity today. It's best to think of automation in terms of outcomes: what needs to get done and can it be done in a more automated fashion? What needs to be produced (Phil cites automated pizza making machines)? What processes are taking up people's time (Phil cites automation in payment systems)? What jobs can be totally automated (e.g., driving trucks)? What departmental functions can be fully automated (like content moderation at Twitter)? All businesses should be reviewing all their activities at all these levels and asking where automation can eliminate waste, save time and release resources for greater productivity. Whether it's as simple as calendaring software or as complex as robotic process automation, it's right to examine every opportunity and find an automated solution. A.I. Is going to help. The rapid adoption of ChatGPT has opened many eyes to the possibilities of getting smart assistance to change and improve the way work is done. ChatGPT can help develop content, make plans, find data, write code, make summaries of libraries of documents, and assist in many many more tasks — as exhibited by the many ChatGPT threads on twitter that are full of new ideas. The great breakthrough of ChatGPT lies in making available the vast majority of available knowledge on virtually all topics in a convenient, conversational way. Businesses are the results of their accumulated, shared and applied knowledge. ChatGPT and similar AI's amplify knowledge and accelerate learning. Businesses that don't utilize this availability will fall behind their competitors. There will be new software environments. Software and platforms are two parts of the work environment that are changing fast. Whether we work on Zoom or Slack or Teams or Github or Salesforce, we continuously encounter new upgrades and functions as well as new alternatives. There is no alternative to earning the skills to utilize these tools to their greatest productive effect, and to keep our learning updated. One economic function that is not improving amidst content change is trust. We can't be sure, sometimes, about the other party we're talking to or collaborating with, we can't be sure of trusting data, we can't be sure that our privacy and property rights are protected. Phil made the prediction that blockchain, as a secure record of all transactions and un-hackable repository of data and information, will play a bigger role in our business future as an arbiter of trust. For example, this may be where our individual health records might reside, which individuals would own, and which they could share and use for their own benefit in navigating the regulated opacity of the healthcare system. Subjectivism and empathy will always play important roles. Phil made a reference to “unhealthy analytics”. His point was that we are now in a position to measure more and more human action and human behavior, but that measurement does not necessarily provide insight, and may even give rise to perverse incentives. For example, it's possible to measure when employees checked in to the office and when they left, but it's not equally possible to monitor their productivity or motivation. It's possible to measure the number of hours they spend on Zoom, but a different problem to measure their remote contributions. Analytics have their place, but understanding and empathizing with employees, and carefully constructing their mental models in order to be able to appeal to them and stimulate them, remain subjective, emotionally-based skills which are still a critical component of management. Steer into the skid. How do founders, owners, and managers deal with these changes? Phil's expression is to steer into the skid. Reimagine work, embrace the powerful new technologies that are available, and be willing to experiment — perhaps in ways that others aren't — to generate the active learning that moves organizations forward. It might be messy, and even feel chaotic, but it's the right response to tectonic change. Expect some turbulence, while being open to infinite new possibilities. Additional Resources The Nine: The Tectonic Forces Reshaping the Workplace by Phil Simon: Mises.org/E4B_215_Book PhilSimon.com — Expertise on workplace collaboration and technology Phil Simon on LinkedIn: Mises.org/E4B_215_LinkedIn

Austrian economics recognizes change as a constant and provides guidance for adapting to it and managing it. Change is changing for business — it's faster and more fundamental in the digital age. Austrian economics can help even more as a result of its practical and realist approach to adaptation and continuous adjustment. Knowledge Capsule Change is changing. Change is a constant. You can think of the market in constant flux, as Mises did, You can think in terms of VUCA — volatility, uncertainty, complexity, and ambiguity. You can think of it in terms of complexity or of absolute uncertainty. However you tune your mind and your business processes, there are always going to be more things that can happen than you can predict or prepare for. There are some ways to think better about ceaseless change, however. One is to bucket the major themes or corridors of change, to organize your thinking and make some judgments about where and how to act and adapt. By recognizing these multiple types of change, businesses will be better prepared for adaptive action. Our E4B guest Phil Simon has studied change in the workplace and recently published a new book titled The Nine — about nine tectonic forces that are reshaping business and the workplace where we conduct business. He advises businesses to be alert to the changing nature of change in the digital age. People are changing. The people you hire today and the people already working at your firm are not the same people as they were just a couple of years ago. They've been through a new, different and challenging experience of working through the Covid-19 pandemic, and they've been working with new technologies, in new places (i.e., working remotely) and they've been questioning how they relate to work, to their colleagues, and to the firm. Don't expect them to be unchanged in their mindsets, attitudes, and work practices. The nature of the employment relationship is different today — less formal, less rigid, less standardized. Phil Simon uses the term “empowered employees” — employers must be empathic in understanding their new mental model as it relates to work. The workplace is changing. The workplace is no longer a physical space where people congregate to collaborate on work tasks, but a digital space of networked people, machines and software. New software and new machines are evolving all the time in this space, changing our relationship to it and to work. People are not going to go back to the office as the standard method of getting business done. If you want to have a physical space for people to meet in person, it must be reconfigured to support those business activities that can only be done in person, and not just as a standard structure of cubicles, offices and wiring. People must feel that there is more or better productivity to be enjoyed in the physical shared space than can be realized elsewhere. The structure of work is changing. Phil's book includes a section on fractions: the idea that firms no longer need full-time access to a necessary business skill — like finance and accounting — via contracting with individuals for 100% of their worktime. New organizational models are emerging that utilize fractional access to these skills as needed. There are fractional CFOs and CMOs and CTOs. There are highly qualified experts available via sharing platforms; they can be both the best at what they do and the best fit for your firm's need, available for a percentage of their time, not all of it. This thinking about fractional talent and skill utilization is becoming a more integral part of organizational thinking. Automation is universally available. Some level of automation is coming to every workplace. It's approaching with greater speed and intensity today. It's best to think of automation in terms of outcomes: what needs to get done and can it be done in a more automated fashion? What needs to be produced (Phil cites automated pizza making machines)? What processes are taking up people's time (Phil cites automation in payment systems)? What jobs can be totally automated (e.g., driving trucks)? What departmental functions can be fully automated (like content moderation at Twitter)? All businesses should be reviewing all their activities at all these levels and asking where automation can eliminate waste, save time and release resources for greater productivity. Whether it's as simple as calendaring software or as complex as robotic process automation, it's right to examine every opportunity and find an automated solution. A.I. Is going to help. The rapid adoption of ChatGPT has opened many eyes to the possibilities of getting smart assistance to change and improve the way work is done. ChatGPT can help develop content, make plans, find data, write code, make summaries of libraries of documents, and assist in many many more tasks — as exhibited by the many ChatGPT threads on twitter that are full of new ideas. The great breakthrough of ChatGPT lies in making available the vast majority of available knowledge on virtually all topics in a convenient, conversational way. Businesses are the results of their accumulated, shared and applied knowledge. ChatGPT and similar AI's amplify knowledge and accelerate learning. Businesses that don't utilize this availability will fall behind their competitors. There will be new software environments. Software and platforms are two parts of the work environment that are changing fast. Whether we work on Zoom or Slack or Teams or Github or Salesforce, we continuously encounter new upgrades and functions as well as new alternatives. There is no alternative to earning the skills to utilize these tools to their greatest productive effect, and to keep our learning updated. One economic function that is not improving amidst content change is trust. We can't be sure, sometimes, about the other party we're talking to or collaborating with, we can't be sure of trusting data, we can't be sure that our privacy and property rights are protected. Phil made the prediction that blockchain, as a secure record of all transactions and un-hackable repository of data and information, will play a bigger role in our business future as an arbiter of trust. For example, this may be where our individual health records might reside, which individuals would own, and which they could share and use for their own benefit in navigating the regulated opacity of the healthcare system. Subjectivism and empathy will always play important roles. Phil made a reference to “unhealthy analytics”. His point was that we are now in a position to measure more and more human action and human behavior, but that measurement does not necessarily provide insight, and may even give rise to perverse incentives. For example, it's possible to measure when employees checked in to the office and when they left, but it's not equally possible to monitor their productivity or motivation. It's possible to measure the number of hours they spend on Zoom, but a different problem to measure their remote contributions. Analytics have their place, but understanding and empathizing with employees, and carefully constructing their mental models in order to be able to appeal to them and stimulate them, remain subjective, emotionally-based skills which are still a critical component of management. Steer into the skid. How do founders, owners, and managers deal with these changes? Phil's expression is to steer into the skid. Reimagine work, embrace the powerful new technologies that are available, and be willing to experiment — perhaps in ways that others aren't — to generate the active learning that moves organizations forward. It might be messy, and even feel chaotic, but it's the right response to tectonic change. Expect some turbulence, while being open to infinite new possibilities. Additional Resources The Nine: The Tectonic Forces Reshaping the Workplace by Phil Simon: Mises.org/E4B_215_Book PhilSimon.com — Expertise on workplace collaboration and technology Phil Simon on LinkedIn: Mises.org/E4B_215_LinkedIn

Entrepreneurship is well-defined in economics, and well-recognized as the engine that drives economic growth. That means people enjoying greater well-being, including but not limited to material prosperity. But economic growth can be uneven. Some countries, some regions, and even some firms do not generate the same levels of economic growth as others. How do we understand this variability? We look for what holds entrepreneurship back. Knowledge Capsule Economic development can be a self-reinforcing cycle of continuous improvement in people's circumstances. Greater material prosperity is a valid and worthwhile goal for economic development. But, says Shawn Ritenour, economic development goes beyond that goal: it delivers a greater variety of goods and services that individuals and businesses can use as means to achieve their own diverse ends. The production of this greater variety requires entrepreneurship in the creation of new ideas and the pursuit of new value, and it generates new entrepreneurship by supplying a greater variety of resources to work with in those pursuits. To generate this cycle, an enabling environment is required — one that acts as a catalyst for entrepreneurship. Economic development is a multifaceted process in which several forms of human action combine in a system for economic prosperity. It's not instructive to try to isolate financial capital or capital goods or technology or even human capital, and culture and social institutions can't be ignored. These sources of prosperity must work together in an orderly fashion to generate the necessary synthesis. The vital role is that of the entrepreneur. The entrepreneur is the one who undertakes production, the one who combines resources to produce a product that meets customers' needs and enables those customers in their own economic pursuits. Entrepreneurs kick off the cycle. Firms and organizations can act entrepreneurially, but it's fundamental to understand that individuals — sometimes working in teams or committees — are the ones behind entrepreneurial decision-making. The entrepreneur is not necessarily a single person, but entrepreneurship is always a human action. How do we get entrepreneurship started? Entrepreneurship requires customer knowledge, technical knowledge and financial capital. Customer knowledge includes the empathic understanding of what's needed for customers to be able to better meet their own needs. In the context of economic development, this knowledge is probably widely available to private entrepreneurs, but it may not be available to governments, whose understanding is distorted by predispositions to develop specific industries or subsidize specific economic sectors, or towards a particular technology. For these reasons, there can be no “entrepreneurial state”. Individuals with their own ideas and their own private property will provide the energy o break economic inertia. Technical knowledge defines a sufficient understanding of the technology and technological resources to deliver the desired new value to the customer. In under-developed economies, this technical knowledge may be thin, so reinforcing the technical knowledge of entrepreneurs is appropriate, through education, injections of new technology, training, mentoring, or other forms of knowledge transfer. With the right understanding of customer needs and the command of the right technology, the entrepreneurs involved in the development state will always need financial capital, because production takes time to organize before cash flows in to the firm from customers. In development contexts, entrepreneurs often will not have savings of their own, and there may not be an appropriate institutional infrastructure of local banks and lenders and investors. Therefore, customer knowledge, technical knowledge and financial capital combine to provide the foundation for entrepreneurial leadership and growth. They're integrated: it's important for the sources of financial capital to understand and appreciate the nature of the customer and technical knowledge that is being deployed. Typically, this takes the form of venture capital or private equity. Education is another important element in the institutional environment for entrepreneurship. Entrepreneurship as a skill or capability can not be taught — it requires a special orientation that's more developed in some individuals and firms than others. But principles, process and tools can be taught, and experienced entrepreneurs and businesspeople who have developed market savvy can share knowledge that they have acquired. Communicating the entrepreneurial mindset and methods in all stages of education will help to create and promote an entrepreneurial community that's supportive of economic development. One aspect of learning is to understand the entrepreneurial ethic of sacrifice, that it takes a lot of time and effort and expenditures and extended commitment before business success can be achieved. There's more hard work than there is magic. Institutional elements such as property rights and sound money are important components of entrepreneurial development. Property rights and sound money may sound like abstract concepts, but they are extremely influential in economic development processes. Property rights mean that entrepreneurs can assemble and go to market with their own resources in whatever way they prefer. Sound money means that entrepreneurs can anticipate a return from their productive activities that's not eroded away by inflation, and they're not led into miscalculation by monetary manipulation (e.g., unanticipated escalation of future borrowing costs). Removing obstacles to entrepreneurship is the best economic development policy. Traditional approaches to economic development favor centrally planned initiatives, government spending, and policies in the form of subsidies or special incentives. They're not typically market-based approaches. But the right approach is the opposite of policy-making. Instead of trying to design and add new structures, development should be focused on the removal of barriers — on identifying what's getting in the way of nurturing a rich and robust entrepreneurial culture, and focusing on the removal of those obstacles. Leave the entrepreneurs to identify the specific products and services and businesses that can flourish, and to attract the investment capital that will support those businesses, without the need for “policy”. Additional Resources The Economics of Prosperity: Rethinking Economic Growth And Development by Shawn Ritenour: Mises.org/E4B_214_Book1 The Economics Of Prosperity (Edward Elgar): Mises.org/E4B_214_Book2 Shawn Ritenour at Mises.org/Ritenour Shawn Ritenour at Grove City College: Mises.org/E4B_214_Profile

Entrepreneurship is well-defined in economics, and well-recognized as the engine that drives economic growth. That means people enjoying greater well-being, including but not limited to material prosperity. But economic growth can be uneven. Some countries, some regions, and even some firms do not generate the same levels of economic growth as others. How do we understand this variability? We look for what holds entrepreneurship back. Knowledge Capsule Economic development can be a self-reinforcing cycle of continuous improvement in people's circumstances. Greater material prosperity is a valid and worthwhile goal for economic development. But, says Shawn Ritenour, economic development goes beyond that goal: it delivers a greater variety of goods and services that individuals and businesses can use as means to achieve their own diverse ends. The production of this greater variety requires entrepreneurship in the creation of new ideas and the pursuit of new value, and it generates new entrepreneurship by supplying a greater variety of resources to work with in those pursuits. To generate this cycle, an enabling environment is required — one that acts as a catalyst for entrepreneurship. Economic development is a multifaceted process in which several forms of human action combine in a system for economic prosperity. It's not instructive to try to isolate financial capital or capital goods or technology or even human capital, and culture and social institutions can't be ignored. These sources of prosperity must work together in an orderly fashion to generate the necessary synthesis. The vital role is that of the entrepreneur. The entrepreneur is the one who undertakes production, the one who combines resources to produce a product that meets customers' needs and enables those customers in their own economic pursuits. Entrepreneurs kick off the cycle. Firms and organizations can act entrepreneurially, but it's fundamental to understand that individuals — sometimes working in teams or committees — are the ones behind entrepreneurial decision-making. The entrepreneur is not necessarily a single person, but entrepreneurship is always a human action. How do we get entrepreneurship started? Entrepreneurship requires customer knowledge, technical knowledge and financial capital. Customer knowledge includes the empathic understanding of what's needed for customers to be able to better meet their own needs. In the context of economic development, this knowledge is probably widely available to private entrepreneurs, but it may not be available to governments, whose understanding is distorted by predispositions to develop specific industries or subsidize specific economic sectors, or towards a particular technology. For these reasons, there can be no “entrepreneurial state”. Individuals with their own ideas and their own private property will provide the energy o break economic inertia. Technical knowledge defines a sufficient understanding of the technology and technological resources to deliver the desired new value to the customer. In under-developed economies, this technical knowledge may be thin, so reinforcing the technical knowledge of entrepreneurs is appropriate, through education, injections of new technology, training, mentoring, or other forms of knowledge transfer. With the right understanding of customer needs and the command of the right technology, the entrepreneurs involved in the development state will always need financial capital, because production takes time to organize before cash flows in to the firm from customers. In development contexts, entrepreneurs often will not have savings of their own, and there may not be an appropriate institutional infrastructure of local banks and lenders and investors. Therefore, customer knowledge, technical knowledge and financial capital combine to provide the foundation for entrepreneurial leadership and growth. They're integrated: it's important for the sources of financial capital to understand and appreciate the nature of the customer and technical knowledge that is being deployed. Typically, this takes the form of venture capital or private equity. Education is another important element in the institutional environment for entrepreneurship. Entrepreneurship as a skill or capability can not be taught — it requires a special orientation that's more developed in some individuals and firms than others. But principles, process and tools can be taught, and experienced entrepreneurs and businesspeople who have developed market savvy can share knowledge that they have acquired. Communicating the entrepreneurial mindset and methods in all stages of education will help to create and promote an entrepreneurial community that's supportive of economic development. One aspect of learning is to understand the entrepreneurial ethic of sacrifice, that it takes a lot of time and effort and expenditures and extended commitment before business success can be achieved. There's more hard work than there is magic. Institutional elements such as property rights and sound money are important components of entrepreneurial development. Property rights and sound money may sound like abstract concepts, but they are extremely influential in economic development processes. Property rights mean that entrepreneurs can assemble and go to market with their own resources in whatever way they prefer. Sound money means that entrepreneurs can anticipate a return from their productive activities that's not eroded away by inflation, and they're not led into miscalculation by monetary manipulation (e.g., unanticipated escalation of future borrowing costs). Removing obstacles to entrepreneurship is the best economic development policy. Traditional approaches to economic development favor centrally planned initiatives, government spending, and policies in the form of subsidies or special incentives. They're not typically market-based approaches. But the right approach is the opposite of policy-making. Instead of trying to design and add new structures, development should be focused on the removal of barriers — on identifying what's getting in the way of nurturing a rich and robust entrepreneurial culture, and focusing on the removal of those obstacles. Leave the entrepreneurs to identify the specific products and services and businesses that can flourish, and to attract the investment capital that will support those businesses, without the need for “policy”. Additional Resources The Economics of Prosperity: Rethinking Economic Growth And Development by Shawn Ritenour: Mises.org/E4B_214_Book1 The Economics Of Prosperity (Edward Elgar): Mises.org/E4B_214_Book2 Shawn Ritenour at Mises.org/Ritenour Shawn Ritenour at Grove City College: Mises.org/E4B_214_Profile

Entrepreneurship is well-defined in economics, and well-recognized as the engine that drives economic growth. That means people enjoying greater well-being, including but not limited to material prosperity. But economic growth can be uneven. Some countries, some regions, and even some firms do not generate the same levels of economic growth as others. How do we understand this variability? We look for what holds entrepreneurship back. Knowledge Capsule Economic development can be a self-reinforcing cycle of continuous improvement in people's circumstances. Greater material prosperity is a valid and worthwhile goal for economic development. But, says Shawn Ritenour, economic development goes beyond that goal: it delivers a greater variety of goods and services that individuals and businesses can use as means to achieve their own diverse ends. The production of this greater variety requires entrepreneurship in the creation of new ideas and the pursuit of new value, and it generates new entrepreneurship by supplying a greater variety of resources to work with in those pursuits. To generate this cycle, an enabling environment is required — one that acts as a catalyst for entrepreneurship. Economic development is a multifaceted process in which several forms of human action combine in a system for economic prosperity. It's not instructive to try to isolate financial capital or capital goods or technology or even human capital, and culture and social institutions can't be ignored. These sources of prosperity must work together in an orderly fashion to generate the necessary synthesis. The vital role is that of the entrepreneur. The entrepreneur is the one who undertakes production, the one who combines resources to produce a product that meets customers' needs and enables those customers in their own economic pursuits. Entrepreneurs kick off the cycle. Firms and organizations can act entrepreneurially, but it's fundamental to understand that individuals — sometimes working in teams or committees — are the ones behind entrepreneurial decision-making. The entrepreneur is not necessarily a single person, but entrepreneurship is always a human action. How do we get entrepreneurship started? Entrepreneurship requires customer knowledge, technical knowledge and financial capital. Customer knowledge includes the empathic understanding of what's needed for customers to be able to better meet their own needs. In the context of economic development, this knowledge is probably widely available to private entrepreneurs, but it may not be available to governments, whose understanding is distorted by predispositions to develop specific industries or subsidize specific economic sectors, or towards a particular technology. For these reasons, there can be no “entrepreneurial state”. Individuals with their own ideas and their own private property will provide the energy o break economic inertia. Technical knowledge defines a sufficient understanding of the technology and technological resources to deliver the desired new value to the customer. In under-developed economies, this technical knowledge may be thin, so reinforcing the technical knowledge of entrepreneurs is appropriate, through education, injections of new technology, training, mentoring, or other forms of knowledge transfer. With the right understanding of customer needs and the command of the right technology, the entrepreneurs involved in the development state will always need financial capital, because production takes time to organize before cash flows in to the firm from customers. In development contexts, entrepreneurs often will not have savings of their own, and there may not be an appropriate institutional infrastructure of local banks and lenders and investors. Therefore, customer knowledge, technical knowledge and financial capital combine to provide the foundation for entrepreneurial leadership and growth. They're integrated: it's important for the sources of financial capital to understand and appreciate the nature of the customer and technical knowledge that is being deployed. Typically, this takes the form of venture capital or private equity. Education is another important element in the institutional environment for entrepreneurship. Entrepreneurship as a skill or capability can not be taught — it requires a special orientation that's more developed in some individuals and firms than others. But principles, process and tools can be taught, and experienced entrepreneurs and businesspeople who have developed market savvy can share knowledge that they have acquired. Communicating the entrepreneurial mindset and methods in all stages of education will help to create and promote an entrepreneurial community that's supportive of economic development. One aspect of learning is to understand the entrepreneurial ethic of sacrifice, that it takes a lot of time and effort and expenditures and extended commitment before business success can be achieved. There's more hard work than there is magic. Institutional elements such as property rights and sound money are important components of entrepreneurial development. Property rights and sound money may sound like abstract concepts, but they are extremely influential in economic development processes. Property rights mean that entrepreneurs can assemble and go to market with their own resources in whatever way they prefer. Sound money means that entrepreneurs can anticipate a return from their productive activities that's not eroded away by inflation, and they're not led into miscalculation by monetary manipulation (e.g., unanticipated escalation of future borrowing costs). Removing obstacles to entrepreneurship is the best economic development policy. Traditional approaches to economic development favor centrally planned initiatives, government spending, and policies in the form of subsidies or special incentives. They're not typically market-based approaches. But the right approach is the opposite of policy-making. Instead of trying to design and add new structures, development should be focused on the removal of barriers — on identifying what's getting in the way of nurturing a rich and robust entrepreneurial culture, and focusing on the removal of those obstacles. Leave the entrepreneurs to identify the specific products and services and businesses that can flourish, and to attract the investment capital that will support those businesses, without the need for “policy”. Additional Resources The Economics of Prosperity: Rethinking Economic Growth And Development by Shawn Ritenour: Mises.org/E4B_214_Book1 The Economics Of Prosperity (Edward Elgar): Mises.org/E4B_214_Book2 Shawn Ritenour at Mises.org/Ritenour Shawn Ritenour at Grove City College: Mises.org/E4B_214_Profile

Market research is a tool for gathering data about customers and consumers that businesses hope will lead to insights about their behaviors and preferences that can be translated into innovation, better service and better business performance. As with any dynamic system, it has changed over time, and the effects of entropy have begun to show themselves in invalid techniques, invalid data, and invalid conclusions. And as with virtually all business systems, the coming of the digital age provides businesses with the opportunity to review, revise and improve exiting practice and existing thinking. Knowledge Capsule Traditional models of market research are losing validity. The Economics For Business approach to market research leans to the qualitative, such as one-on-one conversations with customers and detailed ethnography whereby businesses can observe customer behavior directly. The market research industry grew up favoring quantitative research at scale for its own reasons: that's where the money is. Sharekh Shaikh points out that a $USD 70 billion industry was built largely on large scale panels — recruited audiences adding up to hundreds or thousands of individuals, to whom the market research industry could launch survey questions (“data gathering instruments”), generating large amounts of response data for quantitative analysis and numerical reporting. Customers of these research reports use the output for decision support. Consideration of launching, or of purchasing and installing, a software suite or platform costing millions of dollars can be justified with the results of a survey costs tens of thousands of dollars or low six-figures. One of the planks supporting the value proposition of market research panels is the difficulty of recruiting qualified respondents, such as CIO's or CTO's for an enterprise software survey. Panel operators' revenues reflect their claims to solve this problem, but Sharekh Shaikh tells us that the reliability of their claim has eroded. Panels now may include inaccurately identified respondents (wrong title or role, for example, because the respondent has changed jobs or roles), or even fraud (responses provided by others than the supposed respondent, including bots). The data from the panels is no longer as valid as it once was, and its decision-support quality no longer as high. This general decline in the quality and reliability of traditional research is taking place in many categories, not just tech — consumer package goods, entertainment, fashion, and any industry that uses these methods. The digital revolution brings new opportunities for change, including in traditional market research. It's unusual to think of digitization as increasing human contact, but in research it's the case. Sharekh's research platform, CleverX, has effectively removed the intermediary, the market research panel operator and market research respondent recruitment agency, from the equation, so that the firm requiring research can be connected directly with the respondent with the desired experience and user perspective. Respondents sign up to a place on the platform by supplying their personal data, career profiles, qualifications, credentials and experience. Their incentives include their desire to participate in and contribute to industry developments, as well as the compensation offered. By learning the questions that are being asked, the professionals who sign up to be respondents can gain insight into the developments that are being pursued in their industry. Being a panel member is career and professional advancement. The firm seeking to gather data can identify their respondents and assemble their own panel, using their own criteria and specified profiles, and building a direct relationship with their respondents and customers. Moreover, they can use any data collection tool they prefer, whether that is a technical tool such as Survey Monkey, or direct one-one-one conversations on Zoom or Microsoft Teams, digital focus groups, or any other format. By integrating with calendar software, research interviews with CXO's can be organized and calendarized. These powerful toolsets result in higher quality research being completed up to 10X faster. Digital technology also facilitates video interviewing, so that researchers can talk directly with respondents, and develop a relationship with them. The video interviewing can be asynchronous: given a query, respondents can video-record their responses whenever convenient, TikTok-style. AI can add enhancements such as sentiment analysis, body language and facial expression interpretation. The distinction between quantitative and qualitative research disappears and we realize qualitative data at scale. Market research can become continuous monitoring in the adaptive entrepreneurial system. The reality of markets today is high-speed continuous change. Market research as a tool has always been at a disadvantage in delivering snapshot that take time to process, by which time the market has moved on. Now, with digital techniques, continuous monitoring is possible. Sharekh mentioned several applications: Customer understanding of digital developments: as platforms and systems evolve, customers may not be able to keep up with the technology, or may not be taking advantage of new feature. Digital research techniques can monitor and measure customer understanding dynamically, and point to gaps in their comprehension.Dynamic product development: as developers move a product towards market, digital research techniques can expose potential customers to the development path, and help developers to integrate real-time findings.Monitoring changing lifestyles and mental models: since digital research technologies can provide a continuing connection with customers, it can measure not only their responses to queries, but also their behaviors, attitudes and thinking in general. It's possible to develop profiles and personas and segmentations into which innovative ideas can be inserted to simulate reactions and acceptance. CleverX represents exactly the kind of knowledge recombination that can result in revolutionary change across an entire industry. A core concept in entrepreneurship is the combining of existing knowledge in new ways for new solutions. Sharekh Shaikh combines his software engineering knowledge with knowledge of the market research space and knowledge of the dissatisfaction of end users with the available research tools. His newly-launched company, CleverX, is a fast-growing new entrant in the research space as a result of providing a totally new service: the facilitation of a direct connection between researcher and respondent with digital intermediation in place of previous-generation tools. The experience for the customer is better data, at faster speeds, gathered more conveniently and faster, and, consequently, of greater use in development and innovation processes. Additional Resources CleverX.com Sharekh Shaikh on LinkedIn: Mises.org/E4B_213_LinkedIn

Market research is a tool for gathering data about customers and consumers that businesses hope will lead to insights about their behaviors and preferences that can be translated into innovation, better service and better business performance. As with any dynamic system, it has changed over time, and the effects of entropy have begun to show themselves in invalid techniques, invalid data, and invalid conclusions. And as with virtually all business systems, the coming of the digital age provides businesses with the opportunity to review, revise and improve exiting practice and existing thinking. Knowledge Capsule Traditional models of market research are losing validity. The Economics For Business approach to market research leans to the qualitative, such as one-on-one conversations with customers and detailed ethnography whereby businesses can observe customer behavior directly. The market research industry grew up favoring quantitative research at scale for its own reasons: that's where the money is. Sharekh Shaikh points out that a $USD 70 billion industry was built largely on large scale panels — recruited audiences adding up to hundreds or thousands of individuals, to whom the market research industry could launch survey questions (“data gathering instruments”), generating large amounts of response data for quantitative analysis and numerical reporting. Customers of these research reports use the output for decision support. Consideration of launching, or of purchasing and installing, a software suite or platform costing millions of dollars can be justified with the results of a survey costs tens of thousands of dollars or low six-figures. One of the planks supporting the value proposition of market research panels is the difficulty of recruiting qualified respondents, such as CIO's or CTO's for an enterprise software survey. Panel operators' revenues reflect their claims to solve this problem, but Sharekh Shaikh tells us that the reliability of their claim has eroded. Panels now may include inaccurately identified respondents (wrong title or role, for example, because the respondent has changed jobs or roles), or even fraud (responses provided by others than the supposed respondent, including bots). The data from the panels is no longer as valid as it once was, and its decision-support quality no longer as high. This general decline in the quality and reliability of traditional research is taking place in many categories, not just tech — consumer package goods, entertainment, fashion, and any industry that uses these methods. The digital revolution brings new opportunities for change, including in traditional market research. It's unusual to think of digitization as increasing human contact, but in research it's the case. Sharekh's research platform, CleverX, has effectively removed the intermediary, the market research panel operator and market research respondent recruitment agency, from the equation, so that the firm requiring research can be connected directly with the respondent with the desired experience and user perspective. Respondents sign up to a place on the platform by supplying their personal data, career profiles, qualifications, credentials and experience. Their incentives include their desire to participate in and contribute to industry developments, as well as the compensation offered. By learning the questions that are being asked, the professionals who sign up to be respondents can gain insight into the developments that are being pursued in their industry. Being a panel member is career and professional advancement. The firm seeking to gather data can identify their respondents and assemble their own panel, using their own criteria and specified profiles, and building a direct relationship with their respondents and customers. Moreover, they can use any data collection tool they prefer, whether that is a technical tool such as Survey Monkey, or direct one-one-one conversations on Zoom or Microsoft Teams, digital focus groups, or any other format. By integrating with calendar software, research interviews with CXO's can be organized and calendarized. These powerful toolsets result in higher quality research being completed up to 10X faster. Digital technology also facilitates video interviewing, so that researchers can talk directly with respondents, and develop a relationship with them. The video interviewing can be asynchronous: given a query, respondents can video-record their responses whenever convenient, TikTok-style. AI can add enhancements such as sentiment analysis, body language and facial expression interpretation. The distinction between quantitative and qualitative research disappears and we realize qualitative data at scale. Market research can become continuous monitoring in the adaptive entrepreneurial system. The reality of markets today is high-speed continuous change. Market research as a tool has always been at a disadvantage in delivering snapshot that take time to process, by which time the market has moved on. Now, with digital techniques, continuous monitoring is possible. Sharekh mentioned several applications: Customer understanding of digital developments: as platforms and systems evolve, customers may not be able to keep up with the technology, or may not be taking advantage of new feature. Digital research techniques can monitor and measure customer understanding dynamically, and point to gaps in their comprehension.Dynamic product development: as developers move a product towards market, digital research techniques can expose potential customers to the development path, and help developers to integrate real-time findings.Monitoring changing lifestyles and mental models: since digital research technologies can provide a continuing connection with customers, it can measure not only their responses to queries, but also their behaviors, attitudes and thinking in general. It's possible to develop profiles and personas and segmentations into which innovative ideas can be inserted to simulate reactions and acceptance. CleverX represents exactly the kind of knowledge recombination that can result in revolutionary change across an entire industry. A core concept in entrepreneurship is the combining of existing knowledge in new ways for new solutions. Sharekh Shaikh combines his software engineering knowledge with knowledge of the market research space and knowledge of the dissatisfaction of end users with the available research tools. His newly-launched company, CleverX, is a fast-growing new entrant in the research space as a result of providing a totally new service: the facilitation of a direct connection between researcher and respondent with digital intermediation in place of previous-generation tools. The experience for the customer is better data, at faster speeds, gathered more conveniently and faster, and, consequently, of greater use in development and innovation processes. Additional Resources CleverX.com Sharekh Shaikh on LinkedIn: Mises.org/E4B_213_LinkedIn

Market research is a tool for gathering data about customers and consumers that businesses hope will lead to insights about their behaviors and preferences that can be translated into innovation, better service and better business performance. As with any dynamic system, it has changed over time, and the effects of entropy have begun to show themselves in invalid techniques, invalid data, and invalid conclusions. And as with virtually all business systems, the coming of the digital age provides businesses with the opportunity to review, revise and improve exiting practice and existing thinking. Knowledge Capsule Traditional models of market research are losing validity. The Economics For Business approach to market research leans to the qualitative, such as one-on-one conversations with customers and detailed ethnography whereby businesses can observe customer behavior directly. The market research industry grew up favoring quantitative research at scale for its own reasons: that's where the money is. Sharekh Shaikh points out that a $USD 70 billion industry was built largely on large scale panels — recruited audiences adding up to hundreds or thousands of individuals, to whom the market research industry could launch survey questions (“data gathering instruments”), generating large amounts of response data for quantitative analysis and numerical reporting. Customers of these research reports use the output for decision support. Consideration of launching, or of purchasing and installing, a software suite or platform costing millions of dollars can be justified with the results of a survey costs tens of thousands of dollars or low six-figures. One of the planks supporting the value proposition of market research panels is the difficulty of recruiting qualified respondents, such as CIO's or CTO's for an enterprise software survey. Panel operators' revenues reflect their claims to solve this problem, but Sharekh Shaikh tells us that the reliability of their claim has eroded. Panels now may include inaccurately identified respondents (wrong title or role, for example, because the respondent has changed jobs or roles), or even fraud (responses provided by others than the supposed respondent, including bots). The data from the panels is no longer as valid as it once was, and its decision-support quality no longer as high. This general decline in the quality and reliability of traditional research is taking place in many categories, not just tech — consumer package goods, entertainment, fashion, and any industry that uses these methods. The digital revolution brings new opportunities for change, including in traditional market research. It's unusual to think of digitization as increasing human contact, but in research it's the case. Sharekh's research platform, CleverX, has effectively removed the intermediary, the market research panel operator and market research respondent recruitment agency, from the equation, so that the firm requiring research can be connected directly with the respondent with the desired experience and user perspective. Respondents sign up to a place on the platform by supplying their personal data, career profiles, qualifications, credentials and experience. Their incentives include their desire to participate in and contribute to industry developments, as well as the compensation offered. By learning the questions that are being asked, the professionals who sign up to be respondents can gain insight into the developments that are being pursued in their industry. Being a panel member is career and professional advancement. The firm seeking to gather data can identify their respondents and assemble their own panel, using their own criteria and specified profiles, and building a direct relationship with their respondents and customers. Moreover, they can use any data collection tool they prefer, whether that is a technical tool such as Survey Monkey, or direct one-one-one conversations on Zoom or Microsoft Teams, digital focus groups, or any other format. By integrating with calendar software, research interviews with CXO's can be organized and calendarized. These powerful toolsets result in higher quality research being completed up to 10X faster. Digital technology also facilitates video interviewing, so that researchers can talk directly with respondents, and develop a relationship with them. The video interviewing can be asynchronous: given a query, respondents can video-record their responses whenever convenient, TikTok-style. AI can add enhancements such as sentiment analysis, body language and facial expression interpretation. The distinction between quantitative and qualitative research disappears and we realize qualitative data at scale. Market research can become continuous monitoring in the adaptive entrepreneurial system. The reality of markets today is high-speed continuous change. Market research as a tool has always been at a disadvantage in delivering snapshot that take time to process, by which time the market has moved on. Now, with digital techniques, continuous monitoring is possible. Sharekh mentioned several applications: Customer understanding of digital developments: as platforms and systems evolve, customers may not be able to keep up with the technology, or may not be taking advantage of new feature. Digital research techniques can monitor and measure customer understanding dynamically, and point to gaps in their comprehension.Dynamic product development: as developers move a product towards market, digital research techniques can expose potential customers to the development path, and help developers to integrate real-time findings.Monitoring changing lifestyles and mental models: since digital research technologies can provide a continuing connection with customers, it can measure not only their responses to queries, but also their behaviors, attitudes and thinking in general. It's possible to develop profiles and personas and segmentations into which innovative ideas can be inserted to simulate reactions and acceptance. CleverX represents exactly the kind of knowledge recombination that can result in revolutionary change across an entire industry. A core concept in entrepreneurship is the combining of existing knowledge in new ways for new solutions. Sharekh Shaikh combines his software engineering knowledge with knowledge of the market research space and knowledge of the dissatisfaction of end users with the available research tools. His newly-launched company, CleverX, is a fast-growing new entrant in the research space as a result of providing a totally new service: the facilitation of a direct connection between researcher and respondent with digital intermediation in place of previous-generation tools. The experience for the customer is better data, at faster speeds, gathered more conveniently and faster, and, consequently, of greater use in development and innovation processes. Additional Resources CleverX.com Sharekh Shaikh on LinkedIn: Mises.org/E4B_213_LinkedIn

Peter Drucker famously identified the only two value-generating functions of the firm as innovation and marketing. We propose to differentiate brand building (or branding) from marketing, especially in this digital age. Brands are the vehicle for framing, establishing, nurturing and enhancing relationships with customers. In the digital age, marketing has become mechanized and mathematicised; it's about numbers more than about human values and emotional bonding. Graceann Bennett is a branding expert who has devoted her career and her research agenda to furthering the science of brand building. Knowledge Capsule Brands are assets that drive customer value and business revenue, and they're more valuable than ever in the digital age. Our Economics For Business entrepreneurial method emphasizes the facilitation of value for customers — it is customers who create value through their experiences, and the role of entrepreneurship is to facilitate those valuable experiences. Brands are platforms for value facilitation and conduits for value delivery. In the economic system where assets are value drivers, brands are high-capacity intangible assets. They can be developed and nurtured through various types of economic investment, with a high return on that investment because of the closeness to the customer that they can embody. The investment can be creative and intellectual and is not necessarily limited by budgets and financial resources. Brands hold emotional and relational value, often communicated through symbols and codes. Brands have meaning for customers, and the meaning is differentiated — customers prefer one brand over another. Brands fit into their lives and connect to them emotionally - they can trust brands, rely on brands, and even love brands. Brands express the essential humanism of economics - the entrepreneurial ethic of improving others' lives. They represent an understanding of human yearnings. They help people who are striving to be the best version of themselves. They're a great tool for entrepreneurs. Brands often communicate via symbols and codes: advertising, logos, package design, social media, and sales presentations. These are important, but they're not the essence of branding. That role is reserved for the emotional connections that brands make with customers, engendering trusted relationships. In the digital age, marketing has lost the art of branding. Brand building is an art, an engagement with customers on a psychological and philosophical plane, enhanced by creativity, design, expressive language and visualization. In the digital age, marketing is headed in a different direction. Marketing has become mathematicised. Digital marketing is all about the numbers: audience reach and likes and engagement metrics defined as clicks and views. It's the mechanics of the engagement funnel, of clicks leading to conversions. Graceann Bennett called this approach “the attention economy rather than the emotional economy”. Even worse, marketers are antagonizing customers with an interrupt-and-annoy approach of increasingly invasive pop-ups and intrusions and uninvited invitations in e-mail and text. Annoyingly intrusive marketing can further decay into creepiness as consumers receive offers for goods and services algorithmically triggered by their search history and e-mail conversations or voice requests to Siri or Alexa that they might not have realized were quite as available to marketers as they are. Branding creates customer relationships through emotion and psychology. The mathematical, mechanical approach is exactly the opposite of the human approach of brand building. Branding aspires to a relationship with customers, a creative relationship of innovation and renewal that continuously improve customers' expectations of what's possible and their anticipation of satisfactions to come from brand usage and branded services. Entrepreneurial brand owners seek to understand the needs and wants of customers, and what they find disappointing in current experiences, with a view to making their experiences and their lives better. A lot of this initiative takes place in the realm of psychology, getting inside customers' minds to understand their preferences and why they hold them, and their choices and why they make them. Brandowning firms examine themselves critically to ensure that they are authentic in serving customers' emotional and psychic needs. Graceann Bennett employs Jungian archetype analysis to clarify and channel brand approaches to customer relationships, emphasizing what's authentic in the brand's character and orientation that aligns best with customer psychology. While the first stage of the entrepreneurial method is a deep understanding of the customer and their needs so as to define and scale a potential market, it's also appropriate in the solutions design stage for the brand owner to look inward to define the persona for the brand. To establish trust and build a relationship, a brand must inspire confidence on the customer's part, and to do so must establish authenticity: when claiming to deliver a benefit and facilitate a valuable experience, the brand claims must be consistent with the brand character, the brand heritage and the brand history. A brand can't claim to be something it's never been before, or claim a meaning and a purpose that it has never before exhibited. It can add features and polish and update its attributes, but it can't depart entirely from its historical, observed orientation. Brand relaunches and repositionings risk losing connection with the customer if they are not credible. Brands should search not for novelty in presenting themselves, but depth, clarity and simplicity in establishing brand character. Ethnography is the best research technique to develop empathic engagement between brands and customers. Ethnography is mingling with customers, talking to them, listening intently, and observing their actions and behaviors. This kind of interactive contact with customers should be primary - the analysis of digital clicks and views and followers and even purchase behavior can't deliver the same rich emotional and psychic consumer understanding and insight. In the digital age, we've abandoned the art of mingling, and that's a difference between branding and marketing. Additional Resources GraceannBennett.com Playbook Studio: Playbook.Studio Graceann Bennett on LinkedIn: Mises.org/E4B_212_LinkedIn

Peter Drucker famously identified the only two value-generating functions of the firm as innovation and marketing. We propose to differentiate brand building (or branding) from marketing, especially in this digital age. Brands are the vehicle for framing, establishing, nurturing and enhancing relationships with customers. In the digital age, marketing has become mechanized and mathematicised; it's about numbers more than about human values and emotional bonding. Graceann Bennett is a branding expert who has devoted her career and her research agenda to furthering the science of brand building. Knowledge Capsule Brands are assets that drive customer value and business revenue, and they're more valuable than ever in the digital age. Our Economics For Business entrepreneurial method emphasizes the facilitation of value for customers — it is customers who create value through their experiences, and the role of entrepreneurship is to facilitate those valuable experiences. Brands are platforms for value facilitation and conduits for value delivery. In the economic system where assets are value drivers, brands are high-capacity intangible assets. They can be developed and nurtured through various types of economic investment, with a high return on that investment because of the closeness to the customer that they can embody. The investment can be creative and intellectual and is not necessarily limited by budgets and financial resources. Brands hold emotional and relational value, often communicated through symbols and codes. Brands have meaning for customers, and the meaning is differentiated — customers prefer one brand over another. Brands fit into their lives and connect to them emotionally - they can trust brands, rely on brands, and even love brands. Brands express the essential humanism of economics - the entrepreneurial ethic of improving others' lives. They represent an understanding of human yearnings. They help people who are striving to be the best version of themselves. They're a great tool for entrepreneurs. Brands often communicate via symbols and codes: advertising, logos, package design, social media, and sales presentations. These are important, but they're not the essence of branding. That role is reserved for the emotional connections that brands make with customers, engendering trusted relationships. In the digital age, marketing has lost the art of branding. Brand building is an art, an engagement with customers on a psychological and philosophical plane, enhanced by creativity, design, expressive language and visualization. In the digital age, marketing is headed in a different direction. Marketing has become mathematicised. Digital marketing is all about the numbers: audience reach and likes and engagement metrics defined as clicks and views. It's the mechanics of the engagement funnel, of clicks leading to conversions. Graceann Bennett called this approach “the attention economy rather than the emotional economy”. Even worse, marketers are antagonizing customers with an interrupt-and-annoy approach of increasingly invasive pop-ups and intrusions and uninvited invitations in e-mail and text. Annoyingly intrusive marketing can further decay into creepiness as consumers receive offers for goods and services algorithmically triggered by their search history and e-mail conversations or voice requests to Siri or Alexa that they might not have realized were quite as available to marketers as they are. Branding creates customer relationships through emotion and psychology. The mathematical, mechanical approach is exactly the opposite of the human approach of brand building. Branding aspires to a relationship with customers, a creative relationship of innovation and renewal that continuously improve customers' expectations of what's possible and their anticipation of satisfactions to come from brand usage and branded services. Entrepreneurial brand owners seek to understand the needs and wants of customers, and what they find disappointing in current experiences, with a view to making their experiences and their lives better. A lot of this initiative takes place in the realm of psychology, getting inside customers' minds to understand their preferences and why they hold them, and their choices and why they make them. Brandowning firms examine themselves critically to ensure that they are authentic in serving customers' emotional and psychic needs. Graceann Bennett employs Jungian archetype analysis to clarify and channel brand approaches to customer relationships, emphasizing what's authentic in the brand's character and orientation that aligns best with customer psychology. While the first stage of the entrepreneurial method is a deep understanding of the customer and their needs so as to define and scale a potential market, it's also appropriate in the solutions design stage for the brand owner to look inward to define the persona for the brand. To establish trust and build a relationship, a brand must inspire confidence on the customer's part, and to do so must establish authenticity: when claiming to deliver a benefit and facilitate a valuable experience, the brand claims must be consistent with the brand character, the brand heritage and the brand history. A brand can't claim to be something it's never been before, or claim a meaning and a purpose that it has never before exhibited. It can add features and polish and update its attributes, but it can't depart entirely from its historical, observed orientation. Brand relaunches and repositionings risk losing connection with the customer if they are not credible. Brands should search not for novelty in presenting themselves, but depth, clarity and simplicity in establishing brand character. Ethnography is the best research technique to develop empathic engagement between brands and customers. Ethnography is mingling with customers, talking to them, listening intently, and observing their actions and behaviors. This kind of interactive contact with customers should be primary - the analysis of digital clicks and views and followers and even purchase behavior can't deliver the same rich emotional and psychic consumer understanding and insight. In the digital age, we've abandoned the art of mingling, and that's a difference between branding and marketing. Additional Resources GraceannBennett.com Playbook Studio: Playbook.Studio Graceann Bennett on LinkedIn: Mises.org/E4B_212_LinkedIn

Peter Drucker famously identified the only two value-generating functions of the firm as innovation and marketing. We propose to differentiate brand building (or branding) from marketing, especially in this digital age. Brands are the vehicle for framing, establishing, nurturing and enhancing relationships with customers. In the digital age, marketing has become mechanized and mathematicised; it's about numbers more than about human values and emotional bonding. Graceann Bennett is a branding expert who has devoted her career and her research agenda to furthering the science of brand building. Knowledge Capsule Brands are assets that drive customer value and business revenue, and they're more valuable than ever in the digital age. Our Economics For Business entrepreneurial method emphasizes the facilitation of value for customers — it is customers who create value through their experiences, and the role of entrepreneurship is to facilitate those valuable experiences. Brands are platforms for value facilitation and conduits for value delivery. In the economic system where assets are value drivers, brands are high-capacity intangible assets. They can be developed and nurtured through various types of economic investment, with a high return on that investment because of the closeness to the customer that they can embody. The investment can be creative and intellectual and is not necessarily limited by budgets and financial resources. Brands hold emotional and relational value, often communicated through symbols and codes. Brands have meaning for customers, and the meaning is differentiated — customers prefer one brand over another. Brands fit into their lives and connect to them emotionally - they can trust brands, rely on brands, and even love brands. Brands express the essential humanism of economics - the entrepreneurial ethic of improving others' lives. They represent an understanding of human yearnings. They help people who are striving to be the best version of themselves. They're a great tool for entrepreneurs. Brands often communicate via symbols and codes: advertising, logos, package design, social media, and sales presentations. These are important, but they're not the essence of branding. That role is reserved for the emotional connections that brands make with customers, engendering trusted relationships. In the digital age, marketing has lost the art of branding. Brand building is an art, an engagement with customers on a psychological and philosophical plane, enhanced by creativity, design, expressive language and visualization. In the digital age, marketing is headed in a different direction. Marketing has become mathematicised. Digital marketing is all about the numbers: audience reach and likes and engagement metrics defined as clicks and views. It's the mechanics of the engagement funnel, of clicks leading to conversions. Graceann Bennett called this approach “the attention economy rather than the emotional economy”. Even worse, marketers are antagonizing customers with an interrupt-and-annoy approach of increasingly invasive pop-ups and intrusions and uninvited invitations in e-mail and text. Annoyingly intrusive marketing can further decay into creepiness as consumers receive offers for goods and services algorithmically triggered by their search history and e-mail conversations or voice requests to Siri or Alexa that they might not have realized were quite as available to marketers as they are. Branding creates customer relationships through emotion and psychology. The mathematical, mechanical approach is exactly the opposite of the human approach of brand building. Branding aspires to a relationship with customers, a creative relationship of innovation and renewal that continuously improve customers' expectations of what's possible and their anticipation of satisfactions to come from brand usage and branded services. Entrepreneurial brand owners seek to understand the needs and wants of customers, and what they find disappointing in current experiences, with a view to making their experiences and their lives better. A lot of this initiative takes place in the realm of psychology, getting inside customers' minds to understand their preferences and why they hold them, and their choices and why they make them. Brandowning firms examine themselves critically to ensure that they are authentic in serving customers' emotional and psychic needs. Graceann Bennett employs Jungian archetype analysis to clarify and channel brand approaches to customer relationships, emphasizing what's authentic in the brand's character and orientation that aligns best with customer psychology. While the first stage of the entrepreneurial method is a deep understanding of the customer and their needs so as to define and scale a potential market, it's also appropriate in the solutions design stage for the brand owner to look inward to define the persona for the brand. To establish trust and build a relationship, a brand must inspire confidence on the customer's part, and to do so must establish authenticity: when claiming to deliver a benefit and facilitate a valuable experience, the brand claims must be consistent with the brand character, the brand heritage and the brand history. A brand can't claim to be something it's never been before, or claim a meaning and a purpose that it has never before exhibited. It can add features and polish and update its attributes, but it can't depart entirely from its historical, observed orientation. Brand relaunches and repositionings risk losing connection with the customer if they are not credible. Brands should search not for novelty in presenting themselves, but depth, clarity and simplicity in establishing brand character. Ethnography is the best research technique to develop empathic engagement between brands and customers. Ethnography is mingling with customers, talking to them, listening intently, and observing their actions and behaviors. This kind of interactive contact with customers should be primary - the analysis of digital clicks and views and followers and even purchase behavior can't deliver the same rich emotional and psychic consumer understanding and insight. In the digital age, we've abandoned the art of mingling, and that's a difference between branding and marketing. Additional Resources GraceannBennett.com Playbook Studio: Playbook.Studio Graceann Bennett on LinkedIn: Mises.org/E4B_212_LinkedIn

It's time to re-imagine how entrepreneurs bring their innovative value propositions to market at the appropriate scale to meet the important needs of millions of people. The new way of thinking is for entrepreneurs to focus all their energy on designing, refining and strengthening the value proposition, and then plugging in to a network of resources assembled by others so that customers enjoy the full realization of the value experience the entrepreneurial has designed. Jeff Grogg of JPG Resources joined Economics For Business to describe how this works in the CPG food and beverage industry. Knowledge Capsule Starting From A New Value Proposition. The entrepreneurial journey — whether starting a new company or launching or improving a brand or launching and managing a new corporate innovation initiative or even a new division or internal venture — starts with a value innovation goal. An entrepreneurial team or an entrepreneurial organization conceives of a new experience for customers that they'll value highly enough to warrant the firm's investment in new capabilities. The team tests the market appeal and commercial power of the value proposition to greatest extent they can. They get ready to go to market at scale — to produce, package, ship, distribute, sell and take payments, and then to respond to marketplace results with more volume, or broader distribution, or maybe some tweaks to some aspects of the execution of the value proposition. Traditionally, once the launch decision is made, the firm maps out the value chain and assembles the enabling resources — manufacturing capacity for products, service backrooms and infrastructure for services, supply chain components, business partnerships and their associated contracts, marketing and sales capabilities, distribution, warehousing and retail access. What if this part — the resource assembly part — were already done? The risks and constraints of making a new business out of a new value proposition would be greatly reduced. Jeff Grogg and his platform firm have built new business infrastructure so that entrepreneurs don't need to. Jeff describes his company, JPG Resources, as a business builder. His focus is on food and beverage businesses in the CPG category. The company build businesses so that entrepreneurs don't have to. To be clear, the entrepreneurial teams focus on the customer and customer empathy and understanding, identifying a unique value that meets meaningful needs for a large number of people. That's the critical step in the generation of new economic value. The next step is typically building the supply chain from formulation and recipe development for scale, to manufacturing and packaging, shipping and distribution, and designing the management processes and hiring the people and drawing up the contracts for smooth continuous scale operations. That's extremely hard work, and fraught with risk. The phrase “starting a business” can sound intimidating for that reason. JPG Resources can absorb and take on and solve all those challenges and potential problems, and free the entrepreneurs to concentrate on customer value design and the last mile of marketing and sales. The new entrepreneurial production structure can apply at all scales. JPG Resources has helped pre-market start-ups with initial product development and culinary research, has provided infrastructure for growth for maturing companies, has helped mid-size companies expand beyond their current scope, and has helped big companies enter new areas beyond their existing comfort zones. The new “plug-in” production structure operates at all stages and all scales and all along the value chain. JPG Resources can provide manufacturing or train manufacturers from start up through expansion. The can help with food science, create new processes, manage contracting, identify and mitigate risk factors and arrange insurance. They can organize supply chain redundancy (efficient redundancy through back-ups, not wasteful redundancy through duplicates) and build resilience for clients. A virtual supply chain is superior to — and more flexible than - the self-assembled version. The new entrepreneurial production structure is a network without boundaries. The very term “supply chain” reflects linear thinking — links joined together in sequence. Systems thinking is non-linear. The JPG Resources infrastructure is an ecosystem using connective logic, connecting the necessary components, people, knowledge and flows for the desired outcome, and reconnecting as needed when the environment or the market changes. The network is not bounded — there are always external or partner services that are currently outside the network that can be brought in through new connections. All are conceptually aligned, and all the relationships and contracts are win-win. The experience of JPG Resources in designing, assembling and integrating supply chains and production networks means that they've seen both sides of contractual relationships and service partnerships under all conceivable circumstances and can make sure all the agreements work - and expand the value space - for all parties. The new entrepreneurial production structure is an acceleration and strengthening of knowledge-building proficiency. In episode #199, we identified knowledge-building proficiency as the key to value creation capacity. By partnering with infrastructure building firms like JPG Resources (and Gembah from episode #210), entrepreneurs can benefit from sharing the knowledge that these forms have already accumulated over multiple projects and product and business launches and growth initiatives. Jeff's company is only too happy to share this knowledge, and doing so can help entrepreneurs avoid what he calls “self-harm” — making mistakes that could be avoided with the relevant prior knowledge. Experience is harder to share. Jeff's staff have hundreds of thousands of hours of experience, and, while entrepreneurs can't live what they've lived, they can certainly benefit from experiential learning. The error avoidance inherent in knowledge and experience sharing can be invaluable to entrepreneurs. Individual freedom and choice still apply, in a more flexible capital structure. Entrepreneurs can choose as much or as little of the available pre-built infrastructure as they choose. They can focus on their own strengths and supplement where they know they need to. They can make their own connections in the ecosystem and their own adjustments as circumstances dictate. The new entrepreneurial infrastructure does not imply a reduction in entrepreneurial initiative, but a boost, an acceleration, an expansion of value creation potential. It enables the entrepreneur to concentrate on value facilitation rather than on building a supply chain. The capital structure for value creation in the economy as a whole becomes more flexible, flows more freely and can throw off the shackles of bureaucracy and regulatory compliance. The entrepreneur can pass on the burdens of HR and finance and legal and many more functions that are peripheral to — and sometimes impediments to - value creation and concentrate on the value task alone. This suite of organizational and capital innovation points to a structure of more firms, better firms, and faster and more significant value creation, with fewer economic resources devoted to value-extracting bureaucracy. Additional Resources JPGResources.com Jeff Grogg on LinkedIn: Mises.org/E4B_211_LinkedIn

It's time to re-imagine how entrepreneurs bring their innovative value propositions to market at the appropriate scale to meet the important needs of millions of people. The new way of thinking is for entrepreneurs to focus all their energy on designing, refining and strengthening the value proposition, and then plugging in to a network of resources assembled by others so that customers enjoy the full realization of the value experience the entrepreneurial has designed. Jeff Grogg of JPG Resources joined Economics For Business to describe how this works in the CPG food and beverage industry. Knowledge Capsule Starting From A New Value Proposition. The entrepreneurial journey — whether starting a new company or launching or improving a brand or launching and managing a new corporate innovation initiative or even a new division or internal venture — starts with a value innovation goal. An entrepreneurial team or an entrepreneurial organization conceives of a new experience for customers that they'll value highly enough to warrant the firm's investment in new capabilities. The team tests the market appeal and commercial power of the value proposition to greatest extent they can. They get ready to go to market at scale — to produce, package, ship, distribute, sell and take payments, and then to respond to marketplace results with more volume, or broader distribution, or maybe some tweaks to some aspects of the execution of the value proposition. Traditionally, once the launch decision is made, the firm maps out the value chain and assembles the enabling resources — manufacturing capacity for products, service backrooms and infrastructure for services, supply chain components, business partnerships and their associated contracts, marketing and sales capabilities, distribution, warehousing and retail access. What if this part — the resource assembly part — were already done? The risks and constraints of making a new business out of a new value proposition would be greatly reduced. Jeff Grogg and his platform firm have built new business infrastructure so that entrepreneurs don't need to. Jeff describes his company, JPG Resources, as a business builder. His focus is on food and beverage businesses in the CPG category. The company build businesses so that entrepreneurs don't have to. To be clear, the entrepreneurial teams focus on the customer and customer empathy and understanding, identifying a unique value that meets meaningful needs for a large number of people. That's the critical step in the generation of new economic value. The next step is typically building the supply chain from formulation and recipe development for scale, to manufacturing and packaging, shipping and distribution, and designing the management processes and hiring the people and drawing up the contracts for smooth continuous scale operations. That's extremely hard work, and fraught with risk. The phrase “starting a business” can sound intimidating for that reason. JPG Resources can absorb and take on and solve all those challenges and potential problems, and free the entrepreneurs to concentrate on customer value design and the last mile of marketing and sales. The new entrepreneurial production structure can apply at all scales. JPG Resources has helped pre-market start-ups with initial product development and culinary research, has provided infrastructure for growth for maturing companies, has helped mid-size companies expand beyond their current scope, and has helped big companies enter new areas beyond their existing comfort zones. The new “plug-in” production structure operates at all stages and all scales and all along the value chain. JPG Resources can provide manufacturing or train manufacturers from start up through expansion. The can help with food science, create new processes, manage contracting, identify and mitigate risk factors and arrange insurance. They can organize supply chain redundancy (efficient redundancy through back-ups, not wasteful redundancy through duplicates) and build resilience for clients. A virtual supply chain is superior to — and more flexible than - the self-assembled version. The new entrepreneurial production structure is a network without boundaries. The very term “supply chain” reflects linear thinking — links joined together in sequence. Systems thinking is non-linear. The JPG Resources infrastructure is an ecosystem using connective logic, connecting the necessary components, people, knowledge and flows for the desired outcome, and reconnecting as needed when the environment or the market changes. The network is not bounded — there are always external or partner services that are currently outside the network that can be brought in through new connections. All are conceptually aligned, and all the relationships and contracts are win-win. The experience of JPG Resources in designing, assembling and integrating supply chains and production networks means that they've seen both sides of contractual relationships and service partnerships under all conceivable circumstances and can make sure all the agreements work - and expand the value space - for all parties. The new entrepreneurial production structure is an acceleration and strengthening of knowledge-building proficiency. In episode #199, we identified knowledge-building proficiency as the key to value creation capacity. By partnering with infrastructure building firms like JPG Resources (and Gembah from episode #210), entrepreneurs can benefit from sharing the knowledge that these forms have already accumulated over multiple projects and product and business launches and growth initiatives. Jeff's company is only too happy to share this knowledge, and doing so can help entrepreneurs avoid what he calls “self-harm” — making mistakes that could be avoided with the relevant prior knowledge. Experience is harder to share. Jeff's staff have hundreds of thousands of hours of experience, and, while entrepreneurs can't live what they've lived, they can certainly benefit from experiential learning. The error avoidance inherent in knowledge and experience sharing can be invaluable to entrepreneurs. Individual freedom and choice still apply, in a more flexible capital structure. Entrepreneurs can choose as much or as little of the available pre-built infrastructure as they choose. They can focus on their own strengths and supplement where they know they need to. They can make their own connections in the ecosystem and their own adjustments as circumstances dictate. The new entrepreneurial infrastructure does not imply a reduction in entrepreneurial initiative, but a boost, an acceleration, an expansion of value creation potential. It enables the entrepreneur to concentrate on value facilitation rather than on building a supply chain. The capital structure for value creation in the economy as a whole becomes more flexible, flows more freely and can throw off the shackles of bureaucracy and regulatory compliance. The entrepreneur can pass on the burdens of HR and finance and legal and many more functions that are peripheral to — and sometimes impediments to - value creation and concentrate on the value task alone. This suite of organizational and capital innovation points to a structure of more firms, better firms, and faster and more significant value creation, with fewer economic resources devoted to value-extracting bureaucracy. Additional Resources JPGResources.com Jeff Grogg on LinkedIn: Mises.org/E4B_211_LinkedIn

It's time to re-imagine how entrepreneurs bring their innovative value propositions to market at the appropriate scale to meet the important needs of millions of people. The new way of thinking is for entrepreneurs to focus all their energy on designing, refining and strengthening the value proposition, and then plugging in to a network of resources assembled by others so that customers enjoy the full realization of the value experience the entrepreneurial has designed. Jeff Grogg of JPG Resources joined Economics For Business to describe how this works in the CPG food and beverage industry. Knowledge Capsule Starting From A New Value Proposition. The entrepreneurial journey — whether starting a new company or launching or improving a brand or launching and managing a new corporate innovation initiative or even a new division or internal venture — starts with a value innovation goal. An entrepreneurial team or an entrepreneurial organization conceives of a new experience for customers that they'll value highly enough to warrant the firm's investment in new capabilities. The team tests the market appeal and commercial power of the value proposition to greatest extent they can. They get ready to go to market at scale — to produce, package, ship, distribute, sell and take payments, and then to respond to marketplace results with more volume, or broader distribution, or maybe some tweaks to some aspects of the execution of the value proposition. Traditionally, once the launch decision is made, the firm maps out the value chain and assembles the enabling resources — manufacturing capacity for products, service backrooms and infrastructure for services, supply chain components, business partnerships and their associated contracts, marketing and sales capabilities, distribution, warehousing and retail access. What if this part — the resource assembly part — were already done? The risks and constraints of making a new business out of a new value proposition would be greatly reduced. Jeff Grogg and his platform firm have built new business infrastructure so that entrepreneurs don't need to. Jeff describes his company, JPG Resources, as a business builder. His focus is on food and beverage businesses in the CPG category. The company build businesses so that entrepreneurs don't have to. To be clear, the entrepreneurial teams focus on the customer and customer empathy and understanding, identifying a unique value that meets meaningful needs for a large number of people. That's the critical step in the generation of new economic value. The next step is typically building the supply chain from formulation and recipe development for scale, to manufacturing and packaging, shipping and distribution, and designing the management processes and hiring the people and drawing up the contracts for smooth continuous scale operations. That's extremely hard work, and fraught with risk. The phrase “starting a business” can sound intimidating for that reason. JPG Resources can absorb and take on and solve all those challenges and potential problems, and free the entrepreneurs to concentrate on customer value design and the last mile of marketing and sales. The new entrepreneurial production structure can apply at all scales. JPG Resources has helped pre-market start-ups with initial product development and culinary research, has provided infrastructure for growth for maturing companies, has helped mid-size companies expand beyond their current scope, and has helped big companies enter new areas beyond their existing comfort zones. The new “plug-in” production structure operates at all stages and all scales and all along the value chain. JPG Resources can provide manufacturing or train manufacturers from start up through expansion. The can help with food science, create new processes, manage contracting, identify and mitigate risk factors and arrange insurance. They can organize supply chain redundancy (efficient redundancy through back-ups, not wasteful redundancy through duplicates) and build resilience for clients. A virtual supply chain is superior to — and more flexible than - the self-assembled version. The new entrepreneurial production structure is a network without boundaries. The very term “supply chain” reflects linear thinking — links joined together in sequence. Systems thinking is non-linear. The JPG Resources infrastructure is an ecosystem using connective logic, connecting the necessary components, people, knowledge and flows for the desired outcome, and reconnecting as needed when the environment or the market changes. The network is not bounded — there are always external or partner services that are currently outside the network that can be brought in through new connections. All are conceptually aligned, and all the relationships and contracts are win-win. The experience of JPG Resources in designing, assembling and integrating supply chains and production networks means that they've seen both sides of contractual relationships and service partnerships under all conceivable circumstances and can make sure all the agreements work - and expand the value space - for all parties. The new entrepreneurial production structure is an acceleration and strengthening of knowledge-building proficiency. In episode #199, we identified knowledge-building proficiency as the key to value creation capacity. By partnering with infrastructure building firms like JPG Resources (and Gembah from episode #210), entrepreneurs can benefit from sharing the knowledge that these forms have already accumulated over multiple projects and product and business launches and growth initiatives. Jeff's company is only too happy to share this knowledge, and doing so can help entrepreneurs avoid what he calls “self-harm” — making mistakes that could be avoided with the relevant prior knowledge. Experience is harder to share. Jeff's staff have hundreds of thousands of hours of experience, and, while entrepreneurs can't live what they've lived, they can certainly benefit from experiential learning. The error avoidance inherent in knowledge and experience sharing can be invaluable to entrepreneurs. Individual freedom and choice still apply, in a more flexible capital structure. Entrepreneurs can choose as much or as little of the available pre-built infrastructure as they choose. They can focus on their own strengths and supplement where they know they need to. They can make their own connections in the ecosystem and their own adjustments as circumstances dictate. The new entrepreneurial infrastructure does not imply a reduction in entrepreneurial initiative, but a boost, an acceleration, an expansion of value creation potential. It enables the entrepreneur to concentrate on value facilitation rather than on building a supply chain. The capital structure for value creation in the economy as a whole becomes more flexible, flows more freely and can throw off the shackles of bureaucracy and regulatory compliance. The entrepreneur can pass on the burdens of HR and finance and legal and many more functions that are peripheral to — and sometimes impediments to - value creation and concentrate on the value task alone. This suite of organizational and capital innovation points to a structure of more firms, better firms, and faster and more significant value creation, with fewer economic resources devoted to value-extracting bureaucracy. Additional Resources JPGResources.com Jeff Grogg on LinkedIn: Mises.org/E4B_211_LinkedIn

A lot economic thinking about the structure of production and entrepreneurs' challenges in the assembly of resources can be revised in the 21st Century. There are networks of value-driving resources already assembled, connected and operating, into which entrepreneurs can plug their business ideas. We talked to the CEO of one of the leading networks for insights into how it works. Knowledge Capsule Entrepreneurs are rethinking and redesigning the production structure of the economy. Value generation includes the identification of unmet customer needs, the design of a new solution for those needs, and the assembly of a production structure to deliver the solution in the form the customer prefers to experience it. Historically, entrepreneurs have been required to master all three components. Now they can focus on customer understanding and solution design, and plug in to a pre-assembled production structure. Lack of supply chain and production knowledge and experience are no longer barriers to fast and effective business progress. Let's say an entrepreneurial firm or team has a new product – perhaps an idea, perhaps a prototype, perhaps even tested for customer response. How is to be turned into a manufactured and delivered reality? What are the product specs, what are the right fabrics and the right colors and the right feature sets, what is the compatibility with current manufacturing machinery or is customization required, what are the right production steps for packaging and surface design, what about shipping and warehousing, and marketing and sales? What financing arrangements are needed? We can call all of these assembly steps a “supply chain”. If the team does not have supply chain knowledge or the experience of creating products quickly, then great challenges, consuming lots of time and effort, lie ahead. What if all this knowledge and experience were available for any entrepreneurial project or team to plug into, seamlessly, with the freedom to pick and choose customer elements, selecting the very best resources, but only those that are needed? This is a reality today. An entrepreneur who created product success on his own has assembled the network infrastructure for future entrepreneurs to plug into. Steven Blustein created and operated a successful company in the pet toy industry. He conceived of a product design and then went through all the hard and time-consuming work of turning a design into product specs, including materials selection, testing and sourcing, as well as finding a factory to manufacture, packaging, branding and surface design, shipping and warehousing, sales and distribution, legal, finance and accounting. Such a resource assembly and integration task is not only challenging and difficult, but wastefully time consuming. It might require contacting 50 manufacturers before finding the right one to work with, for example. What if someone else could take on this burden, solve all the manufacturing and supply chain problems, and reduce the time and expense required? That's exactly what Steve Blustein did. The Gembah value proposition is to help entrepreneurial businesses grow by focusing them on customer value generation, while others provide all the supporting infrastructure. Steve Blustein's company is called Gembah. In his previous company, Steve had personal experience of the time, effort, challenges and trial-and-error frustrations of identifying and contracting with and fine-tuning manufacturing resources, and building the supply chain from factory to market. He describes traveling to China 60+ times for his own business and the time he committed to learning the language. He experienced the diversion of time and effort away from his focus on serving customers, no matter how committed he was in principle. Entrepreneurs inevitably become consumed by operational detail. His current company, Gembah, aims to solve that problem for entrepreneurs. It offers a client-customizable network of supply chain components, all selected and vetted to be best-in-class, and provides the management and co-ordination as a service, so that the entrepreneur no longer needs to devote time and effort to doing so. Gembah maps the value production and supply network for the entrepreneur, and the journey processes and stages, and provides hands-on assistance at every point. Journeys are classified by general type (e.g., for hard goods, soft goods and mechanical / electrical), and then transparently customized and priced for each individual entrepreneurial project. The entrepreneur can have direct connection to the producing factory (no intermediate trading company or agent) or can choose hands off management through a Gembah account director. Control always rests with the entrepreneur. The starting point for the journey is flexible. The supply chain journey can begin even before there's a product design or even a fully fleshed out idea. Or the journey may start for a company with an existing supply chain seeking a new product to add to their portfolio. Or it could be an existing supply chain that a company seeks to relocate or strengthen or change in some way. Gembah offers complete infrastructure assembly and re-assembly to meet client needs. There are different kinds of journeys entrepreneurs can choose. For example, a “direct to manufacturing journey” is one appropriate for existing goods that a seller on Amazon or other platforms might want to add to their range with only slight customization and some branding and surface design embellishments. Another might be a time-compressed product development journey. Steve gave the example of a company that sourced a new Bluetooth speaker to their own specs which they were able to manufacture from existing tooling, customize the feature set to make it unique, add branding, and launch in 5 months versus the more usual 52 weeks. Gembah clients tap in to a large and growing knowledge base, and no part of the supply chain and manufacturing back-end for products is uncovered or unavailable. Gembah aims at a complete service, with no gaps in the capacity to meet client requests, apart from the upstream components of doing the selling and generating revenue. There are experts available to help with design, marketing and branding, as well as financing, and also in opportunity identification via market scans. Most services are provided directly, some via partnerships. There is even the potential for a reverse flow in which the manufacturers bring the product ideas and finished products to a seller who is a client of Gembah. The development costs are already spent and the seller benefits. The prospect is for a new production structure in the economy integrating better companies with better value creation performance. In today's production structure, we observe problems of concentration, with large corporations dominating industries and markets, and the so-called small and medium sized businesses constrained, no matter how creative they are, by limited access to capital and infrastructure. The prospect now is for this to change. Those who succeed at identifying important unmet customer needs can plug in to the manufacturing, supply chain and infrastructure network that companies like Gembah assemble, customize and manage. We'll replace industry concentration with a new set of empathic, value generating entrepreneurial companies. They'll be better companies (e.g., less bureaucracy because it's not needed, less financialization that distorts their results focus)) with better performance (greater concentration on customers and customer value creation, and more flexibility in adaptively reconfiguring operations when market changes call for it). Entrepreneurial companies will be newly empowered to rise and to thrive, wherever they are in the world. Additional Resources Gembah.com Steven Blustein on LinkedIn: Mises.org/E4B_210_LinkedIn

A lot economic thinking about the structure of production and entrepreneurs' challenges in the assembly of resources can be revised in the 21st Century. There are networks of value-driving resources already assembled, connected and operating, into which entrepreneurs can plug their business ideas. We talked to the CEO of one of the leading networks for insights into how it works. Knowledge Capsule Entrepreneurs are rethinking and redesigning the production structure of the economy. Value generation includes the identification of unmet customer needs, the design of a new solution for those needs, and the assembly of a production structure to deliver the solution in the form the customer prefers to experience it. Historically, entrepreneurs have been required to master all three components. Now they can focus on customer understanding and solution design, and plug in to a pre-assembled production structure. Lack of supply chain and production knowledge and experience are no longer barriers to fast and effective business progress. Let's say an entrepreneurial firm or team has a new product – perhaps an idea, perhaps a prototype, perhaps even tested for customer response. How is to be turned into a manufactured and delivered reality? What are the product specs, what are the right fabrics and the right colors and the right feature sets, what is the compatibility with current manufacturing machinery or is customization required, what are the right production steps for packaging and surface design, what about shipping and warehousing, and marketing and sales? What financing arrangements are needed? We can call all of these assembly steps a “supply chain”. If the team does not have supply chain knowledge or the experience of creating products quickly, then great challenges, consuming lots of time and effort, lie ahead. What if all this knowledge and experience were available for any entrepreneurial project or team to plug into, seamlessly, with the freedom to pick and choose customer elements, selecting the very best resources, but only those that are needed? This is a reality today. An entrepreneur who created product success on his own has assembled the network infrastructure for future entrepreneurs to plug into. Steven Blustein created and operated a successful company in the pet toy industry. He conceived of a product design and then went through all the hard and time-consuming work of turning a design into product specs, including materials selection, testing and sourcing, as well as finding a factory to manufacture, packaging, branding and surface design, shipping and warehousing, sales and distribution, legal, finance and accounting. Such a resource assembly and integration task is not only challenging and difficult, but wastefully time consuming. It might require contacting 50 manufacturers before finding the right one to work with, for example. What if someone else could take on this burden, solve all the manufacturing and supply chain problems, and reduce the time and expense required? That's exactly what Steve Blustein did. The Gembah value proposition is to help entrepreneurial businesses grow by focusing them on customer value generation, while others provide all the supporting infrastructure. Steve Blustein's company is called Gembah. In his previous company, Steve had personal experience of the time, effort, challenges and trial-and-error frustrations of identifying and contracting with and fine-tuning manufacturing resources, and building the supply chain from factory to market. He describes traveling to China 60+ times for his own business and the time he committed to learning the language. He experienced the diversion of time and effort away from his focus on serving customers, no matter how committed he was in principle. Entrepreneurs inevitably become consumed by operational detail. His current company, Gembah, aims to solve that problem for entrepreneurs. It offers a client-customizable network of supply chain components, all selected and vetted to be best-in-class, and provides the management and co-ordination as a service, so that the entrepreneur no longer needs to devote time and effort to doing so. Gembah maps the value production and supply network for the entrepreneur, and the journey processes and stages, and provides hands-on assistance at every point. Journeys are classified by general type (e.g., for hard goods, soft goods and mechanical / electrical), and then transparently customized and priced for each individual entrepreneurial project. The entrepreneur can have direct connection to the producing factory (no intermediate trading company or agent) or can choose hands off management through a Gembah account director. Control always rests with the entrepreneur. The starting point for the journey is flexible. The supply chain journey can begin even before there's a product design or even a fully fleshed out idea. Or the journey may start for a company with an existing supply chain seeking a new product to add to their portfolio. Or it could be an existing supply chain that a company seeks to relocate or strengthen or change in some way. Gembah offers complete infrastructure assembly and re-assembly to meet client needs. There are different kinds of journeys entrepreneurs can choose. For example, a “direct to manufacturing journey” is one appropriate for existing goods that a seller on Amazon or other platforms might want to add to their range with only slight customization and some branding and surface design embellishments. Another might be a time-compressed product development journey. Steve gave the example of a company that sourced a new Bluetooth speaker to their own specs which they were able to manufacture from existing tooling, customize the feature set to make it unique, add branding, and launch in 5 months versus the more usual 52 weeks. Gembah clients tap in to a large and growing knowledge base, and no part of the supply chain and manufacturing back-end for products is uncovered or unavailable. Gembah aims at a complete service, with no gaps in the capacity to meet client requests, apart from the upstream components of doing the selling and generating revenue. There are experts available to help with design, marketing and branding, as well as financing, and also in opportunity identification via market scans. Most services are provided directly, some via partnerships. There is even the potential for a reverse flow in which the manufacturers bring the product ideas and finished products to a seller who is a client of Gembah. The development costs are already spent and the seller benefits. The prospect is for a new production structure in the economy integrating better companies with better value creation performance. In today's production structure, we observe problems of concentration, with large corporations dominating industries and markets, and the so-called small and medium sized businesses constrained, no matter how creative they are, by limited access to capital and infrastructure. The prospect now is for this to change. Those who succeed at identifying important unmet customer needs can plug in to the manufacturing, supply chain and infrastructure network that companies like Gembah assemble, customize and manage. We'll replace industry concentration with a new set of empathic, value generating entrepreneurial companies. They'll be better companies (e.g., less bureaucracy because it's not needed, less financialization that distorts their results focus)) with better performance (greater concentration on customers and customer value creation, and more flexibility in adaptively reconfiguring operations when market changes call for it). Entrepreneurial companies will be newly empowered to rise and to thrive, wherever they are in the world. Additional Resources Gembah.com Steven Blustein on LinkedIn: Mises.org/E4B_210_LinkedIn

A lot economic thinking about the structure of production and entrepreneurs' challenges in the assembly of resources can be revised in the 21st Century. There are networks of value-driving resources already assembled, connected and operating, into which entrepreneurs can plug their business ideas. We talked to the CEO of one of the leading networks for insights into how it works. Knowledge Capsule Entrepreneurs are rethinking and redesigning the production structure of the economy. Value generation includes the identification of unmet customer needs, the design of a new solution for those needs, and the assembly of a production structure to deliver the solution in the form the customer prefers to experience it. Historically, entrepreneurs have been required to master all three components. Now they can focus on customer understanding and solution design, and plug in to a pre-assembled production structure. Lack of supply chain and production knowledge and experience are no longer barriers to fast and effective business progress. Let's say an entrepreneurial firm or team has a new product – perhaps an idea, perhaps a prototype, perhaps even tested for customer response. How is to be turned into a manufactured and delivered reality? What are the product specs, what are the right fabrics and the right colors and the right feature sets, what is the compatibility with current manufacturing machinery or is customization required, what are the right production steps for packaging and surface design, what about shipping and warehousing, and marketing and sales? What financing arrangements are needed? We can call all of these assembly steps a “supply chain”. If the team does not have supply chain knowledge or the experience of creating products quickly, then great challenges, consuming lots of time and effort, lie ahead. What if all this knowledge and experience were available for any entrepreneurial project or team to plug into, seamlessly, with the freedom to pick and choose customer elements, selecting the very best resources, but only those that are needed? This is a reality today. An entrepreneur who created product success on his own has assembled the network infrastructure for future entrepreneurs to plug into. Steven Blustein created and operated a successful company in the pet toy industry. He conceived of a product design and then went through all the hard and time-consuming work of turning a design into product specs, including materials selection, testing and sourcing, as well as finding a factory to manufacture, packaging, branding and surface design, shipping and warehousing, sales and distribution, legal, finance and accounting. Such a resource assembly and integration task is not only challenging and difficult, but wastefully time consuming. It might require contacting 50 manufacturers before finding the right one to work with, for example. What if someone else could take on this burden, solve all the manufacturing and supply chain problems, and reduce the time and expense required? That's exactly what Steve Blustein did. The Gembah value proposition is to help entrepreneurial businesses grow by focusing them on customer value generation, while others provide all the supporting infrastructure. Steve Blustein's company is called Gembah. In his previous company, Steve had personal experience of the time, effort, challenges and trial-and-error frustrations of identifying and contracting with and fine-tuning manufacturing resources, and building the supply chain from factory to market. He describes traveling to China 60+ times for his own business and the time he committed to learning the language. He experienced the diversion of time and effort away from his focus on serving customers, no matter how committed he was in principle. Entrepreneurs inevitably become consumed by operational detail. His current company, Gembah, aims to solve that problem for entrepreneurs. It offers a client-customizable network of supply chain components, all selected and vetted to be best-in-class, and provides the management and co-ordination as a service, so that the entrepreneur no longer needs to devote time and effort to doing so. Gembah maps the value production and supply network for the entrepreneur, and the journey processes and stages, and provides hands-on assistance at every point. Journeys are classified by general type (e.g., for hard goods, soft goods and mechanical / electrical), and then transparently customized and priced for each individual entrepreneurial project. The entrepreneur can have direct connection to the producing factory (no intermediate trading company or agent) or can choose hands off management through a Gembah account director. Control always rests with the entrepreneur. The starting point for the journey is flexible. The supply chain journey can begin even before there's a product design or even a fully fleshed out idea. Or the journey may start for a company with an existing supply chain seeking a new product to add to their portfolio. Or it could be an existing supply chain that a company seeks to relocate or strengthen or change in some way. Gembah offers complete infrastructure assembly and re-assembly to meet client needs. There are different kinds of journeys entrepreneurs can choose. For example, a “direct to manufacturing journey” is one appropriate for existing goods that a seller on Amazon or other platforms might want to add to their range with only slight customization and some branding and surface design embellishments. Another might be a time-compressed product development journey. Steve gave the example of a company that sourced a new Bluetooth speaker to their own specs which they were able to manufacture from existing tooling, customize the feature set to make it unique, add branding, and launch in 5 months versus the more usual 52 weeks. Gembah clients tap in to a large and growing knowledge base, and no part of the supply chain and manufacturing back-end for products is uncovered or unavailable. Gembah aims at a complete service, with no gaps in the capacity to meet client requests, apart from the upstream components of doing the selling and generating revenue. There are experts available to help with design, marketing and branding, as well as financing, and also in opportunity identification via market scans. Most services are provided directly, some via partnerships. There is even the potential for a reverse flow in which the manufacturers bring the product ideas and finished products to a seller who is a client of Gembah. The development costs are already spent and the seller benefits. The prospect is for a new production structure in the economy integrating better companies with better value creation performance. In today's production structure, we observe problems of concentration, with large corporations dominating industries and markets, and the so-called small and medium sized businesses constrained, no matter how creative they are, by limited access to capital and infrastructure. The prospect now is for this to change. Those who succeed at identifying important unmet customer needs can plug in to the manufacturing, supply chain and infrastructure network that companies like Gembah assemble, customize and manage. We'll replace industry concentration with a new set of empathic, value generating entrepreneurial companies. They'll be better companies (e.g., less bureaucracy because it's not needed, less financialization that distorts their results focus)) with better performance (greater concentration on customers and customer value creation, and more flexibility in adaptively reconfiguring operations when market changes call for it). Entrepreneurial companies will be newly empowered to rise and to thrive, wherever they are in the world. Additional Resources Gembah.com Steven Blustein on LinkedIn: Mises.org/E4B_210_LinkedIn

Entrepreneurship and innovation are the keys to economic growth and higher standards of living. The USA has long enjoyed leadership status on these dimensions — people see the USA as the land of entrepreneurs and the source of new ideas and advances in business. Is the reputation still deserved? Or is it being eclipsed as part of the general decline in standards and capabilities that we observe? Lipton Matthews is a global economic and geo-political analyst who brings deep knowledge and expertise to address our concerns. Knowledge Capsule Borrowing a framework from the Global Innovation Index published by the World Intellectual Property Organization, we can examine the state of entrepreneurship and innovation in the US relative to both other countries and its own history, under the headings of institutions, human capital and research, infrastructure, market sophistication and business sophistication. Institutions: The private sector institutions of the USA continue to excel for entrepreneurship and innovation. When we think of American institutions for the encouragement of entrepreneurship and innovation, we must examine private sector institutions, not those of government. Ordinary people in civil society build the institutions that promote innovation. Private scientific research is robust in responding to market signals of consumer and business needs. Financial institutions such as venture capital and angel investors support innovative development. Policymakers mistakenly believe they can conjure up a creative economy by fiat, but they're wrong. It's private institutions that support and cultivate innovation. Even if the public sector tries to encroach, the private sector maintains its innovative edge. Professor Sam Gregg warned us recently that the United States of today more closely resembles a European social democracy than many Americans are willing to admit, but Lipton Matthews is confident that America is still winning the entrepreneurship contests because the forces of democratic socialism can't overpower the higher-energy force of the private sector drive for creative innovation in return for market reward. Human capital and research: The ability to execute overcomes any shortcomings in education. If we look through the declinist lens, it's easy to become gravely concerned about the state of education at all levels in the US, which directly impacts the development and deployment of what economists refer to as human capital. Do we under-allocate resources to teaching schoolkids business and entrepreneurship skills and tools, and at the college level, do we turn out too many English and philosophy grads compared to market needs, and not enough engineers and STEM grads? Lipton Matthews cautions us against worrying about the wrong things. The educational qualifications of the products of American schools and universities matters less than their executional and implementational capabilities. America is a nation of do-ers, and that type of expertise is embedded and innate, from the time of the founding fathers and early immigrants who built the America economy. We prize innovators more than inventors — the ones who successfully turn ideas into marketable products and services. Entrepreneurship is action, and American business capitalizes the talent for execution, combining scientific learning with creative action to generate innovation. Executional capacity comes more from a market orientation than from formal learning. A concern about the research component of the Global Innovation Index's “human capital and research” classification is, perhaps, more justified. Government-directed research dominates formal research budgets — directed to fields such as climate change — for universities in the US, and the historical evidence is clear that this pool of research is inappropriate for the support of entrepreneurship, despite European aspirations to an entrepreneurial state. Brilliant scholars and researchers who could be entrepreneurs and innovators are diverted into unproductive activities. It's difficult to quantify private sector R&D; we must hope that it is sufficient to counter-balance the state's diversion of research funds. In fact, Lipton Matthews points out, we must expect the state and innovators to be in competition. The former prefers control and stability versus the latter's pursuit of disruption and change. Infrastructure: Think local and regional, not national. We are frequently presented with stories about the crumbling of US infrastructure. That's the wrong level of focus, according to Lipton Matthews. First we should compare US infrastructure to other countries, where the quality of engineers and engineering may be lower, and so roads, bridges and communications networks are inherently superior in the US. Second, we should focus on infrastructure in our localities and regions. Local communities can manage infrastructure well in support of local businesses. Some towns and cities will have better-managed and better-maintained infrastructure than other parts of their state, and businesses will be attracted there. Market sophistication: capital flowing to best entrepreneurial uses. Lipton Matthews interprets the Global Innovation Index's category of market sophistication to refer to the financing of startups, scale-ups and innovative entrepreneurial businesses. American deployment of venture capital and the widespread networked access to investment funds are examples of market sophistication in practice. Ordinary people can invest in startups and innovation, and entrepreneurs at every stage of their journey can arrange access to investors. While these investment funding networks may not be perfect, and while we may encounter some challenges in moving capital to the bottom of the pyramid, nevertheless, the private financial sector in the US is effective in directing funds towards innovation. While there may be some erosion of purpose, from long term funding of innovation to making money via short term trading in-and-out of markets, this does not detract from America's lead in market sophistication. Business sophistication: The ability of business to absorb new knowledge and use it to innovate. Bart Madden called knowledge-building proficiency the central differentiating function of the successful firm. Our businesses are learning machines, continuously generating new knowledge via R&D, marketplace experiments, interactions with customers and feedback from all business activities. While it's possible that Americans might be eclipsed by some other countries in the race to produce patents, this is not a relevant measure. Marketplace innovation is the test of business sophistication, not patent registration. Knowledge accumulation must be accompanied by knowledge application. America's entrepreneurial nation of doers not only engages in eternal learning but in the adaptive entrepreneurial method of act-learn-improve. The rest of the world has not fully caught up. Summary In Lipton's eyes, America was oriented for entrepreneurial success by the founding fathers and early immigrants, and will continue to innovate and grow as a result of entrepreneurship. Only if we get in our own way through excessive statism, regulation and government intervention that misdirects our energy and resources will we break the well-established historical track record. Additional Resources Global Innovation Index: Mises.org/E4B_209_Index "For Now, Entrepreneurship And Innovation Still Hold A High Place In The USA" by Lipton Matthews: Mises.org/E4B_209_Article

Entrepreneurship and innovation are the keys to economic growth and higher standards of living. The USA has long enjoyed leadership status on these dimensions — people see the USA as the land of entrepreneurs and the source of new ideas and advances in business. Is the reputation still deserved? Or is it being eclipsed as part of the general decline in standards and capabilities that we observe? Lipton Matthews is a global economic and geo-political analyst who brings deep knowledge and expertise to address our concerns. Knowledge Capsule Borrowing a framework from the Global Innovation Index published by the World Intellectual Property Organization, we can examine the state of entrepreneurship and innovation in the US relative to both other countries and its own history, under the headings of institutions, human capital and research, infrastructure, market sophistication and business sophistication. Institutions: The private sector institutions of the USA continue to excel for entrepreneurship and innovation. When we think of American institutions for the encouragement of entrepreneurship and innovation, we must examine private sector institutions, not those of government. Ordinary people in civil society build the institutions that promote innovation. Private scientific research is robust in responding to market signals of consumer and business needs. Financial institutions such as venture capital and angel investors support innovative development. Policymakers mistakenly believe they can conjure up a creative economy by fiat, but they're wrong. It's private institutions that support and cultivate innovation. Even if the public sector tries to encroach, the private sector maintains its innovative edge. Professor Sam Gregg warned us recently that the United States of today more closely resembles a European social democracy than many Americans are willing to admit, but Lipton Matthews is confident that America is still winning the entrepreneurship contests because the forces of democratic socialism can't overpower the higher-energy force of the private sector drive for creative innovation in return for market reward. Human capital and research: The ability to execute overcomes any shortcomings in education. If we look through the declinist lens, it's easy to become gravely concerned about the state of education at all levels in the US, which directly impacts the development and deployment of what economists refer to as human capital. Do we under-allocate resources to teaching schoolkids business and entrepreneurship skills and tools, and at the college level, do we turn out too many English and philosophy grads compared to market needs, and not enough engineers and STEM grads? Lipton Matthews cautions us against worrying about the wrong things. The educational qualifications of the products of American schools and universities matters less than their executional and implementational capabilities. America is a nation of do-ers, and that type of expertise is embedded and innate, from the time of the founding fathers and early immigrants who built the America economy. We prize innovators more than inventors — the ones who successfully turn ideas into marketable products and services. Entrepreneurship is action, and American business capitalizes the talent for execution, combining scientific learning with creative action to generate innovation. Executional capacity comes more from a market orientation than from formal learning. A concern about the research component of the Global Innovation Index's “human capital and research” classification is, perhaps, more justified. Government-directed research dominates formal research budgets — directed to fields such as climate change — for universities in the US, and the historical evidence is clear that this pool of research is inappropriate for the support of entrepreneurship, despite European aspirations to an entrepreneurial state. Brilliant scholars and researchers who could be entrepreneurs and innovators are diverted into unproductive activities. It's difficult to quantify private sector R&D; we must hope that it is sufficient to counter-balance the state's diversion of research funds. In fact, Lipton Matthews points out, we must expect the state and innovators to be in competition. The former prefers control and stability versus the latter's pursuit of disruption and change. Infrastructure: Think local and regional, not national. We are frequently presented with stories about the crumbling of US infrastructure. That's the wrong level of focus, according to Lipton Matthews. First we should compare US infrastructure to other countries, where the quality of engineers and engineering may be lower, and so roads, bridges and communications networks are inherently superior in the US. Second, we should focus on infrastructure in our localities and regions. Local communities can manage infrastructure well in support of local businesses. Some towns and cities will have better-managed and better-maintained infrastructure than other parts of their state, and businesses will be attracted there. Market sophistication: capital flowing to best entrepreneurial uses. Lipton Matthews interprets the Global Innovation Index's category of market sophistication to refer to the financing of startups, scale-ups and innovative entrepreneurial businesses. American deployment of venture capital and the widespread networked access to investment funds are examples of market sophistication in practice. Ordinary people can invest in startups and innovation, and entrepreneurs at every stage of their journey can arrange access to investors. While these investment funding networks may not be perfect, and while we may encounter some challenges in moving capital to the bottom of the pyramid, nevertheless, the private financial sector in the US is effective in directing funds towards innovation. While there may be some erosion of purpose, from long term funding of innovation to making money via short term trading in-and-out of markets, this does not detract from America's lead in market sophistication. Business sophistication: The ability of business to absorb new knowledge and use it to innovate. Bart Madden called knowledge-building proficiency the central differentiating function of the successful firm. Our businesses are learning machines, continuously generating new knowledge via R&D, marketplace experiments, interactions with customers and feedback from all business activities. While it's possible that Americans might be eclipsed by some other countries in the race to produce patents, this is not a relevant measure. Marketplace innovation is the test of business sophistication, not patent registration. Knowledge accumulation must be accompanied by knowledge application. America's entrepreneurial nation of doers not only engages in eternal learning but in the adaptive entrepreneurial method of act-learn-improve. The rest of the world has not fully caught up. Summary In Lipton's eyes, America was oriented for entrepreneurial success by the founding fathers and early immigrants, and will continue to innovate and grow as a result of entrepreneurship. Only if we get in our own way through excessive statism, regulation and government intervention that misdirects our energy and resources will we break the well-established historical track record. Additional Resources Global Innovation Index: Mises.org/E4B_209_Index "For Now, Entrepreneurship And Innovation Still Hold A High Place In The USA" by Lipton Matthews: Mises.org/E4B_209_Article

Entrepreneurship and innovation are the keys to economic growth and higher standards of living. The USA has long enjoyed leadership status on these dimensions — people see the USA as the land of entrepreneurs and the source of new ideas and advances in business. Is the reputation still deserved? Or is it being eclipsed as part of the general decline in standards and capabilities that we observe? Lipton Matthews is a global economic and geo-political analyst who brings deep knowledge and expertise to address our concerns. Knowledge Capsule Borrowing a framework from the Global Innovation Index published by the World Intellectual Property Organization, we can examine the state of entrepreneurship and innovation in the US relative to both other countries and its own history, under the headings of institutions, human capital and research, infrastructure, market sophistication and business sophistication. Institutions: The private sector institutions of the USA continue to excel for entrepreneurship and innovation. When we think of American institutions for the encouragement of entrepreneurship and innovation, we must examine private sector institutions, not those of government. Ordinary people in civil society build the institutions that promote innovation. Private scientific research is robust in responding to market signals of consumer and business needs. Financial institutions such as venture capital and angel investors support innovative development. Policymakers mistakenly believe they can conjure up a creative economy by fiat, but they're wrong. It's private institutions that support and cultivate innovation. Even if the public sector tries to encroach, the private sector maintains its innovative edge. Professor Sam Gregg warned us recently that the United States of today more closely resembles a European social democracy than many Americans are willing to admit, but Lipton Matthews is confident that America is still winning the entrepreneurship contests because the forces of democratic socialism can't overpower the higher-energy force of the private sector drive for creative innovation in return for market reward. Human capital and research: The ability to execute overcomes any shortcomings in education. If we look through the declinist lens, it's easy to become gravely concerned about the state of education at all levels in the US, which directly impacts the development and deployment of what economists refer to as human capital. Do we under-allocate resources to teaching schoolkids business and entrepreneurship skills and tools, and at the college level, do we turn out too many English and philosophy grads compared to market needs, and not enough engineers and STEM grads? Lipton Matthews cautions us against worrying about the wrong things. The educational qualifications of the products of American schools and universities matters less than their executional and implementational capabilities. America is a nation of do-ers, and that type of expertise is embedded and innate, from the time of the founding fathers and early immigrants who built the America economy. We prize innovators more than inventors — the ones who successfully turn ideas into marketable products and services. Entrepreneurship is action, and American business capitalizes the talent for execution, combining scientific learning with creative action to generate innovation. Executional capacity comes more from a market orientation than from formal learning. A concern about the research component of the Global Innovation Index's “human capital and research” classification is, perhaps, more justified. Government-directed research dominates formal research budgets — directed to fields such as climate change — for universities in the US, and the historical evidence is clear that this pool of research is inappropriate for the support of entrepreneurship, despite European aspirations to an entrepreneurial state. Brilliant scholars and researchers who could be entrepreneurs and innovators are diverted into unproductive activities. It's difficult to quantify private sector R&D; we must hope that it is sufficient to counter-balance the state's diversion of research funds. In fact, Lipton Matthews points out, we must expect the state and innovators to be in competition. The former prefers control and stability versus the latter's pursuit of disruption and change. Infrastructure: Think local and regional, not national. We are frequently presented with stories about the crumbling of US infrastructure. That's the wrong level of focus, according to Lipton Matthews. First we should compare US infrastructure to other countries, where the quality of engineers and engineering may be lower, and so roads, bridges and communications networks are inherently superior in the US. Second, we should focus on infrastructure in our localities and regions. Local communities can manage infrastructure well in support of local businesses. Some towns and cities will have better-managed and better-maintained infrastructure than other parts of their state, and businesses will be attracted there. Market sophistication: capital flowing to best entrepreneurial uses. Lipton Matthews interprets the Global Innovation Index's category of market sophistication to refer to the financing of startups, scale-ups and innovative entrepreneurial businesses. American deployment of venture capital and the widespread networked access to investment funds are examples of market sophistication in practice. Ordinary people can invest in startups and innovation, and entrepreneurs at every stage of their journey can arrange access to investors. While these investment funding networks may not be perfect, and while we may encounter some challenges in moving capital to the bottom of the pyramid, nevertheless, the private financial sector in the US is effective in directing funds towards innovation. While there may be some erosion of purpose, from long term funding of innovation to making money via short term trading in-and-out of markets, this does not detract from America's lead in market sophistication. Business sophistication: The ability of business to absorb new knowledge and use it to innovate. Bart Madden called knowledge-building proficiency the central differentiating function of the successful firm. Our businesses are learning machines, continuously generating new knowledge via R&D, marketplace experiments, interactions with customers and feedback from all business activities. While it's possible that Americans might be eclipsed by some other countries in the race to produce patents, this is not a relevant measure. Marketplace innovation is the test of business sophistication, not patent registration. Knowledge accumulation must be accompanied by knowledge application. America's entrepreneurial nation of doers not only engages in eternal learning but in the adaptive entrepreneurial method of act-learn-improve. The rest of the world has not fully caught up. Summary In Lipton's eyes, America was oriented for entrepreneurial success by the founding fathers and early immigrants, and will continue to innovate and grow as a result of entrepreneurship. Only if we get in our own way through excessive statism, regulation and government intervention that misdirects our energy and resources will we break the well-established historical track record. Additional Resources Global Innovation Index: Mises.org/E4B_209_Index "For Now, Entrepreneurship And Innovation Still Hold A High Place In The USA" by Lipton Matthews: Mises.org/E4B_209_Article

What can economics tell us about designing fulfilling jobs and productive workplaces? Quite a lot if we apply the economics of subjective value and empathy. Melissa Swift is the author of Work Here Now: Think Like A Human And Build A Powerhouse Workplace. She discusses her research on the Economics For Business podcast. Knowledge Capsule Poorly designed jobs and workplaces are dangerous, dull, annoying, frustrating and/or confusing. The results of academic research have confirmed how alienated many workers are from their jobs, and the trends in these findings are worsening, not improving. During the pandemic, many of us had the opportunity to stand back and survey this situation, and realize that it's a problem that we need to address. We can do better by applying Austrian economics principles of subjective value and empathy. The economics of subjective value should point employers in the direction of asking how employees feel about their jobs and the sense of purpose and meaning they derive from them. Why do these considerations not arise, or why are they insufficiently acknowledged? Melissa Swift sees what she calls a wall between how human beings operate and how the world of work operates. We think in discrete terms about “work” on one hand, and “people” on another, and don't integrate them well. Managers have demonstrated a penchant for intensifying work (doing more in less time and with fewer resources) and for pressing for over-collaboration (too many reports, checkpoints, meetings and interactions and exchanges, and belonging to too many teams) with the ultimate result of detracting from an individual's capacity to get things done. Managers don't necessarily tie the design of work to impact delivered or value created. In fact, much work is performative, putting on a display of work that is not necessarily productive (writing impeccable but essentially useless reports, for example). Managers should be actively looking for and rooting out problems of bad jobs and poor work environments. Melissa Swift's formula is to be humble and curious in asking how work feels to those who are doing it. Employees know their work better than managers do (an observation which, of course, turns management science on its head). There are a couple of “monsters” that can be identified and tamed. One is the anxiety monster - we all feel anxiety about whether we are productive enough, or doing good enough work, or being viewed in a favorable light. Anxious managers stand over people, telling them to work harder and faster. We must shut down all the anxious stories that are in our heads. Employees can be over-anxious about customers, too. We may tend to over-deliver on customer care and customer expectations, to the point where we train them to be so demanding that they go beyond the point where the corporation is capable of fulfilling its own promises. Once “monster” jobs — those that generate excess anxiety — are established, there's a tendency for the HR “copy machine” to copy-paste them throughout the company, so that more employees become stressed. Listening for job stress and devising better ways of working is an entrepreneurial task. The entrepreneurial mindset is to listen to customers (in this case, job incumbents), to identify unmet needs, which are aways based on emotion and can never be articulated perfectly clearly, to creatively design new solutions to the customer's felt problem, and to institute positive change using the new solution. This implies continuous adaptive change in job descriptions, performance expectations, structures, team and tasks. The entrepreneurial approach is often hard to apply in the corporation. One reason is that incentives are lined up to favor what Melissa Swift calls “smooth”. Management incentive schemes are often designed to encourage “smooth” — no drastic changes or turns, steady progress. Yet the adaptive entrepreneurial system does not promise smooth, and can't delver it. Innovation in response to changes in customer preferences or competition can be bumpy. And many organizations suffer from autoimmune disease — the defenses go up as soon as something unknown or unprecedented is encountered. Good leadership can counter the auto-immune response — but it's leadership that does less rather than more, relaxing constraints and letting those closest to customers and markets to make any needed adjustments and to respond at the rate of change that the market demands. Business school concepts of leadership have goaded executives into over-managing and over-controlling, and reversing the over-active concept of leadership is one of Melissa Swifts core prescriptions. The HR Department is a big part of the problem. The deep history of HR is dark. The function was founded to quell violence between labor and management. HR was to stand in the middle and to keep a lid on a boiling pot, as Melissa picturesquely expressed it. Performance management — mechanically measuring humans' output in these toxic adversarial environments — was never a warm or supportive concept. As big business became more centralized, HR simply became more empowered and widened its scope. There was never much humanism in HR. HR departments are not typically thinking about work and how work is changing and how to make it a better experience for people. If they were, they'd be thinking differently about matching talent to jobs, thinking more deeply about how alienating and constraining automation technology can be to those who have to use it. They know they are being monitored and measured and assessed. Melissa recommends couples therapy for technology and those who work with it — to stop each party from driving the other crazy. Asynchronous work, deconstructed work, transparent work. Melissa's book has 90 strategies for organizational level and team level problem solving actions and adjustments. We discussed three directions for better work. Asynchronous work: fewer meetings, which provides greater flexibility for workers, it naturally de-intensifies (you don't have to have the report ready for the regularly scheduled Thursday meeting), and it makes for more relaxed collaboration across time zones. Asynchronous work tends to be better documented and more permanent. Deconstructed work: start with tasks to be done rather than job descriptions; assemble the optimum combination of humans and technology to get the tasks done; let talent flow to the work, i.e., it doesn't matter if it is full time employees, part-timers, project specialists or gig workers or agencies or consultants doing the work, so long as the tasks get done by the best-qualified talent. Transparent work: make all information available to all employees at all times, nothing hidden or out-of-bounds. As a result, employees and teams have all the information they need to do their jobs, with no need for hierarchical or administrative intervention. Accountability and empowerment are enhanced, and new talent may emerge when you don't hire for information but for skill in using it. Additional Resources Work Here Now: Think Like A Human And Build A Powerhouse Workplace by Melissa Swift: Mises.org/E4B_208_Book1 Bullshit Jobs: A Theory by David Graeber: Mises.org/E4B_208_Book2

What can economics tell us about designing fulfilling jobs and productive workplaces? Quite a lot if we apply the economics of subjective value and empathy. Melissa Swift is the author of Work Here Now: Think Like A Human And Build A Powerhouse Workplace. She discusses her research on the Economics For Business podcast. Knowledge Capsule Poorly designed jobs and workplaces are dangerous, dull, annoying, frustrating and/or confusing. The results of academic research have confirmed how alienated many workers are from their jobs, and the trends in these findings are worsening, not improving. During the pandemic, many of us had the opportunity to stand back and survey this situation, and realize that it's a problem that we need to address. We can do better by applying Austrian economics principles of subjective value and empathy. The economics of subjective value should point employers in the direction of asking how employees feel about their jobs and the sense of purpose and meaning they derive from them. Why do these considerations not arise, or why are they insufficiently acknowledged? Melissa Swift sees what she calls a wall between how human beings operate and how the world of work operates. We think in discrete terms about “work” on one hand, and “people” on another, and don't integrate them well. Managers have demonstrated a penchant for intensifying work (doing more in less time and with fewer resources) and for pressing for over-collaboration (too many reports, checkpoints, meetings and interactions and exchanges, and belonging to too many teams) with the ultimate result of detracting from an individual's capacity to get things done. Managers don't necessarily tie the design of work to impact delivered or value created. In fact, much work is performative, putting on a display of work that is not necessarily productive (writing impeccable but essentially useless reports, for example). Managers should be actively looking for and rooting out problems of bad jobs and poor work environments. Melissa Swift's formula is to be humble and curious in asking how work feels to those who are doing it. Employees know their work better than managers do (an observation which, of course, turns management science on its head). There are a couple of “monsters” that can be identified and tamed. One is the anxiety monster - we all feel anxiety about whether we are productive enough, or doing good enough work, or being viewed in a favorable light. Anxious managers stand over people, telling them to work harder and faster. We must shut down all the anxious stories that are in our heads. Employees can be over-anxious about customers, too. We may tend to over-deliver on customer care and customer expectations, to the point where we train them to be so demanding that they go beyond the point where the corporation is capable of fulfilling its own promises. Once “monster” jobs — those that generate excess anxiety — are established, there's a tendency for the HR “copy machine” to copy-paste them throughout the company, so that more employees become stressed. Listening for job stress and devising better ways of working is an entrepreneurial task. The entrepreneurial mindset is to listen to customers (in this case, job incumbents), to identify unmet needs, which are aways based on emotion and can never be articulated perfectly clearly, to creatively design new solutions to the customer's felt problem, and to institute positive change using the new solution. This implies continuous adaptive change in job descriptions, performance expectations, structures, team and tasks. The entrepreneurial approach is often hard to apply in the corporation. One reason is that incentives are lined up to favor what Melissa Swift calls “smooth”. Management incentive schemes are often designed to encourage “smooth” — no drastic changes or turns, steady progress. Yet the adaptive entrepreneurial system does not promise smooth, and can't delver it. Innovation in response to changes in customer preferences or competition can be bumpy. And many organizations suffer from autoimmune disease — the defenses go up as soon as something unknown or unprecedented is encountered. Good leadership can counter the auto-immune response — but it's leadership that does less rather than more, relaxing constraints and letting those closest to customers and markets to make any needed adjustments and to respond at the rate of change that the market demands. Business school concepts of leadership have goaded executives into over-managing and over-controlling, and reversing the over-active concept of leadership is one of Melissa Swifts core prescriptions. The HR Department is a big part of the problem. The deep history of HR is dark. The function was founded to quell violence between labor and management. HR was to stand in the middle and to keep a lid on a boiling pot, as Melissa picturesquely expressed it. Performance management — mechanically measuring humans' output in these toxic adversarial environments — was never a warm or supportive concept. As big business became more centralized, HR simply became more empowered and widened its scope. There was never much humanism in HR. HR departments are not typically thinking about work and how work is changing and how to make it a better experience for people. If they were, they'd be thinking differently about matching talent to jobs, thinking more deeply about how alienating and constraining automation technology can be to those who have to use it. They know they are being monitored and measured and assessed. Melissa recommends couples therapy for technology and those who work with it — to stop each party from driving the other crazy. Asynchronous work, deconstructed work, transparent work. Melissa's book has 90 strategies for organizational level and team level problem solving actions and adjustments. We discussed three directions for better work. Asynchronous work: fewer meetings, which provides greater flexibility for workers, it naturally de-intensifies (you don't have to have the report ready for the regularly scheduled Thursday meeting), and it makes for more relaxed collaboration across time zones. Asynchronous work tends to be better documented and more permanent. Deconstructed work: start with tasks to be done rather than job descriptions; assemble the optimum combination of humans and technology to get the tasks done; let talent flow to the work, i.e., it doesn't matter if it is full time employees, part-timers, project specialists or gig workers or agencies or consultants doing the work, so long as the tasks get done by the best-qualified talent. Transparent work: make all information available to all employees at all times, nothing hidden or out-of-bounds. As a result, employees and teams have all the information they need to do their jobs, with no need for hierarchical or administrative intervention. Accountability and empowerment are enhanced, and new talent may emerge when you don't hire for information but for skill in using it. Additional Resources Work Here Now: Think Like A Human And Build A Powerhouse Workplace by Melissa Swift: Mises.org/E4B_208_Book1 Bullshit Jobs: A Theory by David Graeber: Mises.org/E4B_208_Book2

What can economics tell us about designing fulfilling jobs and productive workplaces? Quite a lot if we apply the economics of subjective value and empathy. Melissa Swift is the author of Work Here Now: Think Like A Human And Build A Powerhouse Workplace. She discusses her research on the Economics For Business podcast. Knowledge Capsule Poorly designed jobs and workplaces are dangerous, dull, annoying, frustrating and/or confusing. The results of academic research have confirmed how alienated many workers are from their jobs, and the trends in these findings are worsening, not improving. During the pandemic, many of us had the opportunity to stand back and survey this situation, and realize that it's a problem that we need to address. We can do better by applying Austrian economics principles of subjective value and empathy. The economics of subjective value should point employers in the direction of asking how employees feel about their jobs and the sense of purpose and meaning they derive from them. Why do these considerations not arise, or why are they insufficiently acknowledged? Melissa Swift sees what she calls a wall between how human beings operate and how the world of work operates. We think in discrete terms about “work” on one hand, and “people” on another, and don't integrate them well. Managers have demonstrated a penchant for intensifying work (doing more in less time and with fewer resources) and for pressing for over-collaboration (too many reports, checkpoints, meetings and interactions and exchanges, and belonging to too many teams) with the ultimate result of detracting from an individual's capacity to get things done. Managers don't necessarily tie the design of work to impact delivered or value created. In fact, much work is performative, putting on a display of work that is not necessarily productive (writing impeccable but essentially useless reports, for example). Managers should be actively looking for and rooting out problems of bad jobs and poor work environments. Melissa Swift's formula is to be humble and curious in asking how work feels to those who are doing it. Employees know their work better than managers do (an observation which, of course, turns management science on its head). There are a couple of “monsters” that can be identified and tamed. One is the anxiety monster - we all feel anxiety about whether we are productive enough, or doing good enough work, or being viewed in a favorable light. Anxious managers stand over people, telling them to work harder and faster. We must shut down all the anxious stories that are in our heads. Employees can be over-anxious about customers, too. We may tend to over-deliver on customer care and customer expectations, to the point where we train them to be so demanding that they go beyond the point where the corporation is capable of fulfilling its own promises. Once “monster” jobs — those that generate excess anxiety — are established, there's a tendency for the HR “copy machine” to copy-paste them throughout the company, so that more employees become stressed. Listening for job stress and devising better ways of working is an entrepreneurial task. The entrepreneurial mindset is to listen to customers (in this case, job incumbents), to identify unmet needs, which are aways based on emotion and can never be articulated perfectly clearly, to creatively design new solutions to the customer's felt problem, and to institute positive change using the new solution. This implies continuous adaptive change in job descriptions, performance expectations, structures, team and tasks. The entrepreneurial approach is often hard to apply in the corporation. One reason is that incentives are lined up to favor what Melissa Swift calls “smooth”. Management incentive schemes are often designed to encourage “smooth” — no drastic changes or turns, steady progress. Yet the adaptive entrepreneurial system does not promise smooth, and can't delver it. Innovation in response to changes in customer preferences or competition can be bumpy. And many organizations suffer from autoimmune disease — the defenses go up as soon as something unknown or unprecedented is encountered. Good leadership can counter the auto-immune response — but it's leadership that does less rather than more, relaxing constraints and letting those closest to customers and markets to make any needed adjustments and to respond at the rate of change that the market demands. Business school concepts of leadership have goaded executives into over-managing and over-controlling, and reversing the over-active concept of leadership is one of Melissa Swifts core prescriptions. The HR Department is a big part of the problem. The deep history of HR is dark. The function was founded to quell violence between labor and management. HR was to stand in the middle and to keep a lid on a boiling pot, as Melissa picturesquely expressed it. Performance management — mechanically measuring humans' output in these toxic adversarial environments — was never a warm or supportive concept. As big business became more centralized, HR simply became more empowered and widened its scope. There was never much humanism in HR. HR departments are not typically thinking about work and how work is changing and how to make it a better experience for people. If they were, they'd be thinking differently about matching talent to jobs, thinking more deeply about how alienating and constraining automation technology can be to those who have to use it. They know they are being monitored and measured and assessed. Melissa recommends couples therapy for technology and those who work with it — to stop each party from driving the other crazy. Asynchronous work, deconstructed work, transparent work. Melissa's book has 90 strategies for organizational level and team level problem solving actions and adjustments. We discussed three directions for better work. Asynchronous work: fewer meetings, which provides greater flexibility for workers, it naturally de-intensifies (you don't have to have the report ready for the regularly scheduled Thursday meeting), and it makes for more relaxed collaboration across time zones. Asynchronous work tends to be better documented and more permanent. Deconstructed work: start with tasks to be done rather than job descriptions; assemble the optimum combination of humans and technology to get the tasks done; let talent flow to the work, i.e., it doesn't matter if it is full time employees, part-timers, project specialists or gig workers or agencies or consultants doing the work, so long as the tasks get done by the best-qualified talent. Transparent work: make all information available to all employees at all times, nothing hidden or out-of-bounds. As a result, employees and teams have all the information they need to do their jobs, with no need for hierarchical or administrative intervention. Accountability and empowerment are enhanced, and new talent may emerge when you don't hire for information but for skill in using it. Additional Resources Work Here Now: Think Like A Human And Build A Powerhouse Workplace by Melissa Swift: Mises.org/E4B_208_Book1 Bullshit Jobs: A Theory by David Graeber: Mises.org/E4B_208_Book2

What is strategy, and is it useful for business? Business schools want you think it is the critical factor in competitive success or failure. They teach structured markets, divided up by market share, with boundaries and external and internal forces to be assessed and countered. “Where to play and how to win.” They see strategy through their lens of financialization and utilize fictitious economic calculations like discounted future cash flows and market capitalization. There's very little Austrian flavor in their view — no acknowledgement of subjective value and the qualitative drivers of value, customer sovereignty, empathy, constantly changing customer preferences, no role for the entrepreneur in helping customers learn what they can want in an evolving world. Our guest Erik Schön provides us with an entirely different view of strategy, which he arrives at via a synthesis of three great strategists: Sun Tzu, John Boyd, and Simon Wardley. Knowledge Capsule Strategy is how to survive and thrive and, for a business, the key tool is harmonization. Sun Tzu identified Purpose as the fundamental factor that keeps people united: customers, producers, suppliers, partners, owners, executives, employees, supporting each other without fear through success and failure. In Sun Tzu, there are four more fundamental factors: Landscape — your business environment.Climate: the forces acting on the environment.Doctrine: ways of operating.Leadership: actions, decisions, choices, and gameplays. Master all five to succeed, or else fail. John Boyd added the dynamics of continuously changing intentions within the pursuit of the realization of purpose. (We find reflections here of Mises' concept of constant flux — everything changing all the time.) Boyd's definition of strategy Is a mental tapestry of changing intentions for harmonizing our efforts to realize purpose in a world that can be bewildering. The purpose of strategy is to improve our ability to adapt: a vision that magnifies the strength and commitment of its adherents, and a grand ideal or noble philosophy providing a binding paradigm for all. Boyd's famous framing of the learning process to develop the ability to adapt is the OODA Loop. [[{"fid":"138778","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"John Boyd's OODA Loop","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"1":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"John Boyd's OODA Loop","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"John Boyd's OODA Loop","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"1"}}]] For Wardley, strategy is the art of moving in and manipulating an environment using tools such as positioning and technological innovation. Wardley's major contribution is to visualize strategy in the form of a map where the X-axis is movement in the environment in predictable steps: Genesis: a new technology or solution or brand is introduced; it's unique.Custom built: a company identifies ways to serve customers with constructed products and services from the new origin.Product: move from custom built to standardization, including sourcing standard parts from suppliersCommodity: there's nothing left that's unique, many companies can be producers.Evolution: a new genesis emerges. The automobile industry provides an example. Genesis: the first internal combustion engine.Custom built: the first car brands, often from craftsmen and small workshops.Product: Many suppliers, competitive differentiation (Ford versus GM).Commodity: ICE automobiles produced in many countries (Japan, South Korea, China, Italy, etc.) with limited customer differentiation.Evolution: the beginning of the EV era. Wardley's approach is that all markets exhibit this evolution. It's important to know the current landscape and predict the future landscape, moving through it with “the why of purpose” (to survive and thrive) and “the why of movement” (taking a particular action that moves you through the landscape). Everything evolves through supply and demand competition. [[{"fid":"138779","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Climatic Pattern","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"2":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Climatic Pattern","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Climatic Pattern","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"2"}}]] The Sun Tzu, Boyd and Wardley approaches to strategy can be combined in the concept of the Strategy Cycle, Strategists move continually through the phases and components. [[{"fid":"138780","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"the Strategy Cycle","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"3":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"the Strategy Cycle","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"the Strategy Cycle","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"3"}}]] The reference to these strategy masters enables businesses to move beyond business school strategy. Move beyond strategy as wars, battles and combat for market share, towards strategy as individuals, teams and organizations fulfilling their shared purpose. Move beyond strategy for survival in competitive environments to sustainably thriving in a world with a high rate of change. Move beyond strategy development as planning, metrics and data towards strategy development for a harmonized direction based on regular assessment of needs (especially customers' needs) and the organization's purpose. Move beyond strategy development as execution and chasing targets to decisions and actions in a harmonized direction by everyone everywhere in the organization based on high situational awareness. Move beyond business as maximizing shareholder value to business as succeeding together with customers and other stakeholders. Move beyond leadership for managers and people in hierarchical leader roles to leadership as a service provided by all people in the organization. Move beyond practices and principles for optimizing parts to harmonizing the whole. The art of strategy is to succeed by securing harmony among stakeholders, and keeping competition off-balance through evolving better capabilities to influence, adapt and map. The three strategists offer complementary views of strategic success. Sun Tzu: Unite society rather than divide.Unite the organization rather than divide.Unite the team rather than divide.Make the organization resilient by cultivating purpose and doctrine. Boyd: A grand ideal, overarching theme, or noble philosophy that individuals can shape and adapt to unfolding circumstances. Wardley: Know your user — know your customers and know how to create value through meeting their needs.Set exceptional standards.Be resilient to cope with a wide variety of extremes and changes by rapidly adapting. The great obstacle to adaptiveness in strategy is inertia in its various forms. Success breeds inertia, and inertia kills. It's rarely a lack of innovation that kills companies, but rather inertia caused by pre-existing business models. Any past success with any component or element will tend to create a resistance to change. Inertia is a loss of capital — whether physical, human, social, or financial. Strategists look to identify different categories of inertia and devise ways to counter them. Category of inertiaCounterpointPeople resist disruption of past normsPast has evolved / lead the charge Write down cost of legacy, run more efficiently Building future agility Already happening in the market, falling behind Fear of transition to the newLet's build new skills internally Develop capabilities in-house Develop relationships with new suppliers Work on adapting practices, not scrapping them Are we sure we can make the new work? Don't seek certainty, seek learning Develop new standards, use open source Use multiple vendors, use brokers Improve supplier relationships Changing business models is hard Avoid death spiral; new approaches e.g., ecosystem Risk mitigation; spin off the old Use rewards, education, training Perfect telling the new story Leading without pressure and control. Erik uses the gardening analogy to illustrate the Sun Tzu style of leading without pressure and control. The gardener tends the garden gently, tilling and planting and watering ahead of time, and the flowers grow. Today we might call this style “self-organization”. The three strategists are very consistent with the action-focused approach to entrepreneurship from Austrian economics. Action is learning. The path is made by walking. Try things out. Draw some Wardley maps as a trial. They'll take you a long way. Additional Resources The Art of Strategy: Steps Towards Business Agility by Erik Schön: Mises.org/E4B_207_Book1 The Art Of Leadership: Purpose and Integrity for Sustainable Success by Erik Schön: Mises.org/E4B_207_Book2 Erik Schön on LinkedIn: Mises.org/E4B_207_LinkedIn A Collection of Wardley Maps: Mises.org/E4B_207_Maps1 A Wardley Map of the Automobile Industry: Mises.org/E4B_207_Maps2

What is strategy, and is it useful for business? Business schools want you think it is the critical factor in competitive success or failure. They teach structured markets, divided up by market share, with boundaries and external and internal forces to be assessed and countered. “Where to play and how to win.” They see strategy through their lens of financialization and utilize fictitious economic calculations like discounted future cash flows and market capitalization. There's very little Austrian flavor in their view — no acknowledgement of subjective value and the qualitative drivers of value, customer sovereignty, empathy, constantly changing customer preferences, no role for the entrepreneur in helping customers learn what they can want in an evolving world. Our guest Erik Schön provides us with an entirely different view of strategy, which he arrives at via a synthesis of three great strategists: Sun Tzu, John Boyd, and Simon Wardley. Knowledge Capsule Strategy is how to survive and thrive and, for a business, the key tool is harmonization. Sun Tzu identified Purpose as the fundamental factor that keeps people united: customers, producers, suppliers, partners, owners, executives, employees, supporting each other without fear through success and failure. In Sun Tzu, there are four more fundamental factors: Landscape — your business environment.Climate: the forces acting on the environment.Doctrine: ways of operating.Leadership: actions, decisions, choices, and gameplays. Master all five to succeed, or else fail. John Boyd added the dynamics of continuously changing intentions within the pursuit of the realization of purpose. (We find reflections here of Mises' concept of constant flux — everything changing all the time.) Boyd's definition of strategy Is a mental tapestry of changing intentions for harmonizing our efforts to realize purpose in a world that can be bewildering. The purpose of strategy is to improve our ability to adapt: a vision that magnifies the strength and commitment of its adherents, and a grand ideal or noble philosophy providing a binding paradigm for all. Boyd's famous framing of the learning process to develop the ability to adapt is the OODA Loop. [[{"fid":"138778","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"John Boyd's OODA Loop","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"1":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"John Boyd's OODA Loop","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"John Boyd's OODA Loop","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"1"}}]] For Wardley, strategy is the art of moving in and manipulating an environment using tools such as positioning and technological innovation. Wardley's major contribution is to visualize strategy in the form of a map where the X-axis is movement in the environment in predictable steps: Genesis: a new technology or solution or brand is introduced; it's unique.Custom built: a company identifies ways to serve customers with constructed products and services from the new origin.Product: move from custom built to standardization, including sourcing standard parts from suppliersCommodity: there's nothing left that's unique, many companies can be producers.Evolution: a new genesis emerges. The automobile industry provides an example. Genesis: the first internal combustion engine.Custom built: the first car brands, often from craftsmen and small workshops.Product: Many suppliers, competitive differentiation (Ford versus GM).Commodity: ICE automobiles produced in many countries (Japan, South Korea, China, Italy, etc.) with limited customer differentiation.Evolution: the beginning of the EV era. Wardley's approach is that all markets exhibit this evolution. It's important to know the current landscape and predict the future landscape, moving through it with “the why of purpose” (to survive and thrive) and “the why of movement” (taking a particular action that moves you through the landscape). Everything evolves through supply and demand competition. [[{"fid":"138779","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Climatic Pattern","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"2":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Climatic Pattern","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Climatic Pattern","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"2"}}]] The Sun Tzu, Boyd and Wardley approaches to strategy can be combined in the concept of the Strategy Cycle, Strategists move continually through the phases and components. [[{"fid":"138780","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"the Strategy Cycle","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"3":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"the Strategy Cycle","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"the Strategy Cycle","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"3"}}]] The reference to these strategy masters enables businesses to move beyond business school strategy. Move beyond strategy as wars, battles and combat for market share, towards strategy as individuals, teams and organizations fulfilling their shared purpose. Move beyond strategy for survival in competitive environments to sustainably thriving in a world with a high rate of change. Move beyond strategy development as planning, metrics and data towards strategy development for a harmonized direction based on regular assessment of needs (especially customers' needs) and the organization's purpose. Move beyond strategy development as execution and chasing targets to decisions and actions in a harmonized direction by everyone everywhere in the organization based on high situational awareness. Move beyond business as maximizing shareholder value to business as succeeding together with customers and other stakeholders. Move beyond leadership for managers and people in hierarchical leader roles to leadership as a service provided by all people in the organization. Move beyond practices and principles for optimizing parts to harmonizing the whole. The art of strategy is to succeed by securing harmony among stakeholders, and keeping competition off-balance through evolving better capabilities to influence, adapt and map. The three strategists offer complementary views of strategic success. Sun Tzu: Unite society rather than divide.Unite the organization rather than divide.Unite the team rather than divide.Make the organization resilient by cultivating purpose and doctrine. Boyd: A grand ideal, overarching theme, or noble philosophy that individuals can shape and adapt to unfolding circumstances. Wardley: Know your user — know your customers and know how to create value through meeting their needs.Set exceptional standards.Be resilient to cope with a wide variety of extremes and changes by rapidly adapting. The great obstacle to adaptiveness in strategy is inertia in its various forms. Success breeds inertia, and inertia kills. It's rarely a lack of innovation that kills companies, but rather inertia caused by pre-existing business models. Any past success with any component or element will tend to create a resistance to change. Inertia is a loss of capital — whether physical, human, social, or financial. Strategists look to identify different categories of inertia and devise ways to counter them. Category of inertiaCounterpointPeople resist disruption of past normsPast has evolved / lead the charge Write down cost of legacy, run more efficiently Building future agility Already happening in the market, falling behind Fear of transition to the newLet's build new skills internally Develop capabilities in-house Develop relationships with new suppliers Work on adapting practices, not scrapping them Are we sure we can make the new work? Don't seek certainty, seek learning Develop new standards, use open source Use multiple vendors, use brokers Improve supplier relationships Changing business models is hard Avoid death spiral; new approaches e.g., ecosystem Risk mitigation; spin off the old Use rewards, education, training Perfect telling the new story Leading without pressure and control. Erik uses the gardening analogy to illustrate the Sun Tzu style of leading without pressure and control. The gardener tends the garden gently, tilling and planting and watering ahead of time, and the flowers grow. Today we might call this style “self-organization”. The three strategists are very consistent with the action-focused approach to entrepreneurship from Austrian economics. Action is learning. The path is made by walking. Try things out. Draw some Wardley maps as a trial. They'll take you a long way. Additional Resources The Art of Strategy: Steps Towards Business Agility by Erik Schön: Mises.org/E4B_207_Book1 The Art Of Leadership: Purpose and Integrity for Sustainable Success by Erik Schön: Mises.org/E4B_207_Book2 Erik Schön on LinkedIn: Mises.org/E4B_207_LinkedIn A Collection of Wardley Maps: Mises.org/E4B_207_Maps1 A Wardley Map of the Automobile Industry: Mises.org/E4B_207_Maps2

What is strategy, and is it useful for business? Business schools want you think it is the critical factor in competitive success or failure. They teach structured markets, divided up by market share, with boundaries and external and internal forces to be assessed and countered. “Where to play and how to win.” They see strategy through their lens of financialization and utilize fictitious economic calculations like discounted future cash flows and market capitalization. There's very little Austrian flavor in their view — no acknowledgement of subjective value and the qualitative drivers of value, customer sovereignty, empathy, constantly changing customer preferences, no role for the entrepreneur in helping customers learn what they can want in an evolving world. Our guest Erik Schön provides us with an entirely different view of strategy, which he arrives at via a synthesis of three great strategists: Sun Tzu, John Boyd, and Simon Wardley. Knowledge Capsule Strategy is how to survive and thrive and, for a business, the key tool is harmonization. Sun Tzu identified Purpose as the fundamental factor that keeps people united: customers, producers, suppliers, partners, owners, executives, employees, supporting each other without fear through success and failure. In Sun Tzu, there are four more fundamental factors: Landscape — your business environment.Climate: the forces acting on the environment.Doctrine: ways of operating.Leadership: actions, decisions, choices, and gameplays. Master all five to succeed, or else fail. John Boyd added the dynamics of continuously changing intentions within the pursuit of the realization of purpose. (We find reflections here of Mises' concept of constant flux — everything changing all the time.) Boyd's definition of strategy Is a mental tapestry of changing intentions for harmonizing our efforts to realize purpose in a world that can be bewildering. The purpose of strategy is to improve our ability to adapt: a vision that magnifies the strength and commitment of its adherents, and a grand ideal or noble philosophy providing a binding paradigm for all. Boyd's famous framing of the learning process to develop the ability to adapt is the OODA Loop. [[{"fid":"138778","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"John Boyd's OODA Loop","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"1":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"John Boyd's OODA Loop","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"John Boyd's OODA Loop","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"1"}}]] For Wardley, strategy is the art of moving in and manipulating an environment using tools such as positioning and technological innovation. Wardley's major contribution is to visualize strategy in the form of a map where the X-axis is movement in the environment in predictable steps: Genesis: a new technology or solution or brand is introduced; it's unique.Custom built: a company identifies ways to serve customers with constructed products and services from the new origin.Product: move from custom built to standardization, including sourcing standard parts from suppliersCommodity: there's nothing left that's unique, many companies can be producers.Evolution: a new genesis emerges. The automobile industry provides an example. Genesis: the first internal combustion engine.Custom built: the first car brands, often from craftsmen and small workshops.Product: Many suppliers, competitive differentiation (Ford versus GM).Commodity: ICE automobiles produced in many countries (Japan, South Korea, China, Italy, etc.) with limited customer differentiation.Evolution: the beginning of the EV era. Wardley's approach is that all markets exhibit this evolution. It's important to know the current landscape and predict the future landscape, moving through it with “the why of purpose” (to survive and thrive) and “the why of movement” (taking a particular action that moves you through the landscape). Everything evolves through supply and demand competition. [[{"fid":"138779","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Climatic Pattern","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"2":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Climatic Pattern","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Climatic Pattern","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"2"}}]] The Sun Tzu, Boyd and Wardley approaches to strategy can be combined in the concept of the Strategy Cycle, Strategists move continually through the phases and components. [[{"fid":"138780","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"the Strategy Cycle","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"3":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"the Strategy Cycle","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"the Strategy Cycle","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"3"}}]] The reference to these strategy masters enables businesses to move beyond business school strategy. Move beyond strategy as wars, battles and combat for market share, towards strategy as individuals, teams and organizations fulfilling their shared purpose. Move beyond strategy for survival in competitive environments to sustainably thriving in a world with a high rate of change. Move beyond strategy development as planning, metrics and data towards strategy development for a harmonized direction based on regular assessment of needs (especially customers' needs) and the organization's purpose. Move beyond strategy development as execution and chasing targets to decisions and actions in a harmonized direction by everyone everywhere in the organization based on high situational awareness. Move beyond business as maximizing shareholder value to business as succeeding together with customers and other stakeholders. Move beyond leadership for managers and people in hierarchical leader roles to leadership as a service provided by all people in the organization. Move beyond practices and principles for optimizing parts to harmonizing the whole. The art of strategy is to succeed by securing harmony among stakeholders, and keeping competition off-balance through evolving better capabilities to influence, adapt and map. The three strategists offer complementary views of strategic success. Sun Tzu: Unite society rather than divide.Unite the organization rather than divide.Unite the team rather than divide.Make the organization resilient by cultivating purpose and doctrine. Boyd: A grand ideal, overarching theme, or noble philosophy that individuals can shape and adapt to unfolding circumstances. Wardley: Know your user — know your customers and know how to create value through meeting their needs.Set exceptional standards.Be resilient to cope with a wide variety of extremes and changes by rapidly adapting. The great obstacle to adaptiveness in strategy is inertia in its various forms. Success breeds inertia, and inertia kills. It's rarely a lack of innovation that kills companies, but rather inertia caused by pre-existing business models. Any past success with any component or element will tend to create a resistance to change. Inertia is a loss of capital — whether physical, human, social, or financial. Strategists look to identify different categories of inertia and devise ways to counter them. Category of inertiaCounterpointPeople resist disruption of past normsPast has evolved / lead the charge Write down cost of legacy, run more efficiently Building future agility Already happening in the market, falling behind Fear of transition to the newLet's build new skills internally Develop capabilities in-house Develop relationships with new suppliers Work on adapting practices, not scrapping them Are we sure we can make the new work? Don't seek certainty, seek learning Develop new standards, use open source Use multiple vendors, use brokers Improve supplier relationships Changing business models is hard Avoid death spiral; new approaches e.g., ecosystem Risk mitigation; spin off the old Use rewards, education, training Perfect telling the new story Leading without pressure and control. Erik uses the gardening analogy to illustrate the Sun Tzu style of leading without pressure and control. The gardener tends the garden gently, tilling and planting and watering ahead of time, and the flowers grow. Today we might call this style “self-organization”. The three strategists are very consistent with the action-focused approach to entrepreneurship from Austrian economics. Action is learning. The path is made by walking. Try things out. Draw some Wardley maps as a trial. They'll take you a long way. Additional Resources The Art of Strategy: Steps Towards Business Agility by Erik Schön: Mises.org/E4B_207_Book1 The Art Of Leadership: Purpose and Integrity for Sustainable Success by Erik Schön: Mises.org/E4B_207_Book2 Erik Schön on LinkedIn: Mises.org/E4B_207_LinkedIn A Collection of Wardley Maps: Mises.org/E4B_207_Maps1 A Wardley Map of the Automobile Industry: Mises.org/E4B_207_Maps2

Entrepreneurship is by no means exclusively American. But this country has led the way in unleashing, encouraging and elevating entrepreneurship as the creative and virtuous pathway to the creation of new value for all. As a republic, we've established the institutional framework in which entrepreneurship can flourish, and entrepreneurs who are successful in creating value reap — and keep — the rewards. Dr. Samuel Gregg, in his book The Next American Economy, examines how this framework was designed at the founding, and discusses what we must all do to preserve it and re-animate it despite the attacks on it from the left. Knowledge Capsule Entrepreneurship and the founding of America are intertwined. America remains the most entrepreneurial country in the world, even if the degree is declining. Our nation has many people willing to pursue the uncertain path of creating new economic value for customers through new products, services and businesses; and, equally importantly, people who will try and buy the new offerings. Alexis de Tocqueville captured the entrepreneurial character in Democracy In America. He thought everyone in America was entrepreneurial. He noted that those immigrants who arrived would quickly start a business, then move on to another one. He observed the tremendous creative energy of the United States. Immigrants have already embraced change in the act of leaving one country to establish themselves in another, and business entrepreneurship is a direct expression of this same love of change. In fact, says Dr. Gregg, America was designed by its Founding Fathers — as they plainly expressed in the Constitution, Declaration Of Independence, the Federalist papers and documents like Washington's Farewell Address - as a commercial republic based on entrepreneurship, and not a political or military or top-down republic or mass democracy. Commerce — or what we would call business — was not viewed with disdain, as it was in aristocratic Britain, but as republican virtue. Washington's Farewell Address refers to the importance of expanding, of national and international navigation and trading, and about the development of strong markets to give Americans an outlet for their production. Business was viewed as the height of civilizational activity. There was a commercial ethic in the vision of a commercial republic which would grow wealth for all. Economic expectations were high and political institutions were designed to be compatible with these economic expectations. There is an increasing trend towards government and the administrative state strangling the creative energy of American entrepreneurship. The erosion of institutional integrity shift and suppresses the creative energy of entrepreneurs. A strong tradition of property rights, in which entrepreneurs can feel confident that they will not only be able to earn but also keep the reward that come from satisfying customers and meeting demand, is an important element of the incentive structure for entrepreneurship. Similarly, entrepreneurs need to feel confidence that commercial disputes will be fairly adjudicated in courts. And they also need to feel confidence that government regulation will not act as an unreversible ratchet of restrictions on their value-creation activities. The trends in the business environment in the US are currently running in the opposite direction: the property rights of successful entrepreneurs are being increasingly questioned and squeezed, commercial interests are viewed unfavorably in courts, and the regulation ratchet is running in the direction of more, not less, restriction on commerce. Dr. Gregg sees the anti-entrepreneurship trend beginning in the Progressive Era and gathering pace since the days of Woodrow Wilson. Progressives seek forms of control that will suppress economic uncertainty and social turbulence. The entrepreneurial embrace of change and pursuit of new value must be suppressed. If society and the economy is to conform to their design, unpredictable creativity must be excluded. The progressive control urge took expanded form in the New Deal and the Great Society and all the successive opportunistically explosive expansions of government power. The anti-entrepreneurial tool is regulation and the administrative state. Dr. Gregg employs the term corporatism to mean legislators and elected politicians, government departments and their administrative bureaucracies working together with big corporations and NGO's to impose control through regulation — “attempting to manage everything for everyone else”. Corporatism is very uncomfortable with freedom, and is more than willing to trade off liberty, and the capacity of markets for entrepreneurial competition, in favor of stagnation and the vision of engineering a specific economic outcome. Their preference is for a form of regulatory state capitalism that exerts control over free enterprise. Recently developed constraints such as ESG and DEI are a manifestation of state capitalism with a particular ideological edge that emanates from left-leaning politics. Companies can no longer have a free choice in the assembly and orchestration of their human capital, which will seriously impair the capacity of the economy to deliver what consumers expect of it. Most of the government's regulation is not aimed at any “public good” (e.g., overall workplace safety) but at special protections for specific interest groups. Often, the businesses who are protecting their interests are the ones who, first, initiate the regulation, and second, write it, through their lobbying firms. If citizens were more habituated to asking who is the group behind any specific regulation, there'd be a greater understanding of this problem and a developing distaste for regulation. Dr. Gregg sees the expansion of state capitalism and the regulatory state as cyclical and capable of reversal. The trends are in the wrong direction, but are not irreversible. Dr. Gregg expressed great confidence in the ability of Americans to work their way around the regulatory barriers to creative entrepreneurship. He highlighted two of the optimistic themes in his book: Capital, capital, capital: Regulation has made it increasingly difficult to match up small entrepreneurial businesses with the capital they need. It takes lots of expensive lawyers to navigate the regulatory jungle that exists for capital acquisition in the us. Yet, American entrepreneurs are proving to be just as creative in capital acquisition as in other fields. They can find their way around the regulatory system. Inventions such as crowdsourcing are a good example of new ways to access capital. The fintech industry is entirely dedicated to freer access to capital. Angel funds, regional and local venture capital funds, new entrepreneurial communities (such as Brandjectory) and new two-sided investment platforms provide more impetus. Deregulate, deregulate, deregulate: If we want to retain the American edge in entrepreneurship, we should focus on reducing the size and scope of the regulation at the local, state and federal level. One of Dr. Gregg's fears is that individuals become political entrepreneurs, and their efforts are directed towards finding ways to thrive in an expanding administrative state and insufficiently on creating new and improved products. Let's find creative ways to reduce regulations, rather than creative ways to survive. Additional Resources The Next American Economy: Nation, State And Markets In An Uncertain World by Samuel Gregg: Mises.org/E4B_206_Book

Entrepreneurship is by no means exclusively American. But this country has led the way in unleashing, encouraging and elevating entrepreneurship as the creative and virtuous pathway to the creation of new value for all. As a republic, we've established the institutional framework in which entrepreneurship can flourish, and entrepreneurs who are successful in creating value reap — and keep — the rewards. Dr. Samuel Gregg, in his book The Next American Economy, examines how this framework was designed at the founding, and discusses what we must all do to preserve it and re-animate it despite the attacks on it from the left. Knowledge Capsule Entrepreneurship and the founding of America are intertwined. America remains the most entrepreneurial country in the world, even if the degree is declining. Our nation has many people willing to pursue the uncertain path of creating new economic value for customers through new products, services and businesses; and, equally importantly, people who will try and buy the new offerings. Alexis de Tocqueville captured the entrepreneurial character in Democracy In America. He thought everyone in America was entrepreneurial. He noted that those immigrants who arrived would quickly start a business, then move on to another one. He observed the tremendous creative energy of the United States. Immigrants have already embraced change in the act of leaving one country to establish themselves in another, and business entrepreneurship is a direct expression of this same love of change. In fact, says Dr. Gregg, America was designed by its Founding Fathers — as they plainly expressed in the Constitution, Declaration Of Independence, the Federalist papers and documents like Washington's Farewell Address - as a commercial republic based on entrepreneurship, and not a political or military or top-down republic or mass democracy. Commerce — or what we would call business — was not viewed with disdain, as it was in aristocratic Britain, but as republican virtue. Washington's Farewell Address refers to the importance of expanding, of national and international navigation and trading, and about the development of strong markets to give Americans an outlet for their production. Business was viewed as the height of civilizational activity. There was a commercial ethic in the vision of a commercial republic which would grow wealth for all. Economic expectations were high and political institutions were designed to be compatible with these economic expectations. There is an increasing trend towards government and the administrative state strangling the creative energy of American entrepreneurship. The erosion of institutional integrity shift and suppresses the creative energy of entrepreneurs. A strong tradition of property rights, in which entrepreneurs can feel confident that they will not only be able to earn but also keep the reward that come from satisfying customers and meeting demand, is an important element of the incentive structure for entrepreneurship. Similarly, entrepreneurs need to feel confidence that commercial disputes will be fairly adjudicated in courts. And they also need to feel confidence that government regulation will not act as an unreversible ratchet of restrictions on their value-creation activities. The trends in the business environment in the US are currently running in the opposite direction: the property rights of successful entrepreneurs are being increasingly questioned and squeezed, commercial interests are viewed unfavorably in courts, and the regulation ratchet is running in the direction of more, not less, restriction on commerce. Dr. Gregg sees the anti-entrepreneurship trend beginning in the Progressive Era and gathering pace since the days of Woodrow Wilson. Progressives seek forms of control that will suppress economic uncertainty and social turbulence. The entrepreneurial embrace of change and pursuit of new value must be suppressed. If society and the economy is to conform to their design, unpredictable creativity must be excluded. The progressive control urge took expanded form in the New Deal and the Great Society and all the successive opportunistically explosive expansions of government power. The anti-entrepreneurial tool is regulation and the administrative state. Dr. Gregg employs the term corporatism to mean legislators and elected politicians, government departments and their administrative bureaucracies working together with big corporations and NGO's to impose control through regulation — “attempting to manage everything for everyone else”. Corporatism is very uncomfortable with freedom, and is more than willing to trade off liberty, and the capacity of markets for entrepreneurial competition, in favor of stagnation and the vision of engineering a specific economic outcome. Their preference is for a form of regulatory state capitalism that exerts control over free enterprise. Recently developed constraints such as ESG and DEI are a manifestation of state capitalism with a particular ideological edge that emanates from left-leaning politics. Companies can no longer have a free choice in the assembly and orchestration of their human capital, which will seriously impair the capacity of the economy to deliver what consumers expect of it. Most of the government's regulation is not aimed at any “public good” (e.g., overall workplace safety) but at special protections for specific interest groups. Often, the businesses who are protecting their interests are the ones who, first, initiate the regulation, and second, write it, through their lobbying firms. If citizens were more habituated to asking who is the group behind any specific regulation, there'd be a greater understanding of this problem and a developing distaste for regulation. Dr. Gregg sees the expansion of state capitalism and the regulatory state as cyclical and capable of reversal. The trends are in the wrong direction, but are not irreversible. Dr. Gregg expressed great confidence in the ability of Americans to work their way around the regulatory barriers to creative entrepreneurship. He highlighted two of the optimistic themes in his book: Capital, capital, capital: Regulation has made it increasingly difficult to match up small entrepreneurial businesses with the capital they need. It takes lots of expensive lawyers to navigate the regulatory jungle that exists for capital acquisition in the us. Yet, American entrepreneurs are proving to be just as creative in capital acquisition as in other fields. They can find their way around the regulatory system. Inventions such as crowdsourcing are a good example of new ways to access capital. The fintech industry is entirely dedicated to freer access to capital. Angel funds, regional and local venture capital funds, new entrepreneurial communities (such as Brandjectory) and new two-sided investment platforms provide more impetus. Deregulate, deregulate, deregulate: If we want to retain the American edge in entrepreneurship, we should focus on reducing the size and scope of the regulation at the local, state and federal level. One of Dr. Gregg's fears is that individuals become political entrepreneurs, and their efforts are directed towards finding ways to thrive in an expanding administrative state and insufficiently on creating new and improved products. Let's find creative ways to reduce regulations, rather than creative ways to survive. Additional Resources The Next American Economy: Nation, State And Markets In An Uncertain World by Samuel Gregg: Mises.org/E4B_206_Book

Entrepreneurship is by no means exclusively American. But this country has led the way in unleashing, encouraging and elevating entrepreneurship as the creative and virtuous pathway to the creation of new value for all. As a republic, we've established the institutional framework in which entrepreneurship can flourish, and entrepreneurs who are successful in creating value reap — and keep — the rewards. Dr. Samuel Gregg, in his book The Next American Economy, examines how this framework was designed at the founding, and discusses what we must all do to preserve it and re-animate it despite the attacks on it from the left. Knowledge Capsule Entrepreneurship and the founding of America are intertwined. America remains the most entrepreneurial country in the world, even if the degree is declining. Our nation has many people willing to pursue the uncertain path of creating new economic value for customers through new products, services and businesses; and, equally importantly, people who will try and buy the new offerings. Alexis de Tocqueville captured the entrepreneurial character in Democracy In America. He thought everyone in America was entrepreneurial. He noted that those immigrants who arrived would quickly start a business, then move on to another one. He observed the tremendous creative energy of the United States. Immigrants have already embraced change in the act of leaving one country to establish themselves in another, and business entrepreneurship is a direct expression of this same love of change. In fact, says Dr. Gregg, America was designed by its Founding Fathers — as they plainly expressed in the Constitution, Declaration Of Independence, the Federalist papers and documents like Washington's Farewell Address - as a commercial republic based on entrepreneurship, and not a political or military or top-down republic or mass democracy. Commerce — or what we would call business — was not viewed with disdain, as it was in aristocratic Britain, but as republican virtue. Washington's Farewell Address refers to the importance of expanding, of national and international navigation and trading, and about the development of strong markets to give Americans an outlet for their production. Business was viewed as the height of civilizational activity. There was a commercial ethic in the vision of a commercial republic which would grow wealth for all. Economic expectations were high and political institutions were designed to be compatible with these economic expectations. There is an increasing trend towards government and the administrative state strangling the creative energy of American entrepreneurship. The erosion of institutional integrity shift and suppresses the creative energy of entrepreneurs. A strong tradition of property rights, in which entrepreneurs can feel confident that they will not only be able to earn but also keep the reward that come from satisfying customers and meeting demand, is an important element of the incentive structure for entrepreneurship. Similarly, entrepreneurs need to feel confidence that commercial disputes will be fairly adjudicated in courts. And they also need to feel confidence that government regulation will not act as an unreversible ratchet of restrictions on their value-creation activities. The trends in the business environment in the US are currently running in the opposite direction: the property rights of successful entrepreneurs are being increasingly questioned and squeezed, commercial interests are viewed unfavorably in courts, and the regulation ratchet is running in the direction of more, not less, restriction on commerce. Dr. Gregg sees the anti-entrepreneurship trend beginning in the Progressive Era and gathering pace since the days of Woodrow Wilson. Progressives seek forms of control that will suppress economic uncertainty and social turbulence. The entrepreneurial embrace of change and pursuit of new value must be suppressed. If society and the economy is to conform to their design, unpredictable creativity must be excluded. The progressive control urge took expanded form in the New Deal and the Great Society and all the successive opportunistically explosive expansions of government power. The anti-entrepreneurial tool is regulation and the administrative state. Dr. Gregg employs the term corporatism to mean legislators and elected politicians, government departments and their administrative bureaucracies working together with big corporations and NGO's to impose control through regulation — “attempting to manage everything for everyone else”. Corporatism is very uncomfortable with freedom, and is more than willing to trade off liberty, and the capacity of markets for entrepreneurial competition, in favor of stagnation and the vision of engineering a specific economic outcome. Their preference is for a form of regulatory state capitalism that exerts control over free enterprise. Recently developed constraints such as ESG and DEI are a manifestation of state capitalism with a particular ideological edge that emanates from left-leaning politics. Companies can no longer have a free choice in the assembly and orchestration of their human capital, which will seriously impair the capacity of the economy to deliver what consumers expect of it. Most of the government's regulation is not aimed at any “public good” (e.g., overall workplace safety) but at special protections for specific interest groups. Often, the businesses who are protecting their interests are the ones who, first, initiate the regulation, and second, write it, through their lobbying firms. If citizens were more habituated to asking who is the group behind any specific regulation, there'd be a greater understanding of this problem and a developing distaste for regulation. Dr. Gregg sees the expansion of state capitalism and the regulatory state as cyclical and capable of reversal. The trends are in the wrong direction, but are not irreversible. Dr. Gregg expressed great confidence in the ability of Americans to work their way around the regulatory barriers to creative entrepreneurship. He highlighted two of the optimistic themes in his book: Capital, capital, capital: Regulation has made it increasingly difficult to match up small entrepreneurial businesses with the capital they need. It takes lots of expensive lawyers to navigate the regulatory jungle that exists for capital acquisition in the us. Yet, American entrepreneurs are proving to be just as creative in capital acquisition as in other fields. They can find their way around the regulatory system. Inventions such as crowdsourcing are a good example of new ways to access capital. The fintech industry is entirely dedicated to freer access to capital. Angel funds, regional and local venture capital funds, new entrepreneurial communities (such as Brandjectory) and new two-sided investment platforms provide more impetus. Deregulate, deregulate, deregulate: If we want to retain the American edge in entrepreneurship, we should focus on reducing the size and scope of the regulation at the local, state and federal level. One of Dr. Gregg's fears is that individuals become political entrepreneurs, and their efforts are directed towards finding ways to thrive in an expanding administrative state and insufficiently on creating new and improved products. Let's find creative ways to reduce regulations, rather than creative ways to survive. Additional Resources The Next American Economy: Nation, State And Markets In An Uncertain World by Samuel Gregg: Mises.org/E4B_206_Book

In economics, production and marketing are not separate concepts. Production responds to customers' needs and marketing is the expression of those needs inside the firm. The entire customer-facing activity of the firm is marketing. Like any other business activity, there is constant flux brought to bear by changing customer preferences, competitive innovation and market evolution. Marketing must be adaptive to change, and a major shift is occurring right now. Mark Schaefer writes about it in Belonging To The Brand: Why Community Is The Last Great Marketing Strategy. Knowledge Capsule Established strategies and tactics of marketing are no longer effective. Marketing thought-leader Mark Schaefer puts it this way: marketing doesn't work like it used to. The established techniques were biased towards outbound communication, such as advertising, PR and events. Mark classifies these techniques as “interrupt and annoy” to try to get customers to give their attention to feature and benefit of the company's offerings. The communications environment shifted from analog to digital and from outbound to interactive, but interrupt and annoy remained the primary technique. Finally, there's an alternative marketing strategy. The new strategy goes by the term “community” or “community building”. As economics advises, it's a product of customer sovereignty. People want to belong to communities that share values and interests. And in the digital age, where work-from-home and glued-to-a-screen are life conditions that can lead to profound loneliness, the need for belonging is amplified. The covid lockdown experience exacerbated the problem. Community is an experience that is highly valued by customer, distinguished via three features: Connection with each other. There's a group feeling of difference that's not shared with others who don't belong to the community.Purpose: community members gather because they have a shared reason to do so, whether it is software development or wine appreciation or the development of technical skills. There are shared rituals and traditions and common behaviors that generate a sense of group identity and bonding through common values.Relevance: A thriving community adapt and adjusts as times and members' needs change. Adaptability strengthens group cohesion and assures continuity and resilience. There's a business case for community building. Community-building may replace brand-building as a primary pathway to facilitating value for customers and thereby generating strong cash flows. The technique has a viable business model. Differentiation: when customers bond in community, they're differentiating themselves and the brand(s) they prefer and support. It's a lasting advantage.Market monitoring: a community is a continuing conversation, a source of insight and signals of change.High speed information: the flow of information from customers and markets to firms is another source of advantage. The behaviors and preferences of community members can be continuously polled, with the opportunity for fast response.Trust. Businesses are recognizing the importance of trust in relationships with ever-greater clarity. Brand communities are trusted by their members; trust is inherent.Advocacy. Community members become the marketer. They communicate benefits and positive experiences. User-generated content both reduces marketing costs and adds authenticity and belief.Loyalty: The most profitable customers are the most loyal customers. Community members are loyal, and, in fact, go beyond loyalty to “attachment”.Co-creation. Value is created by customers in their own experience, or it can be viewed as co-created through interactions with the firm and its products and services. In brand communities, there is community co-creation, such as in LEGO Ideas groups and the IKEA user community.Membership as a product: Some communities become the business modem as members pay both to join and maintain membership and purchase the products and services of the community.Cultural alignment: community is a trend, especially for younger people experiencing social and digital isolation.Customer data: when members freely express their values and preferences, they create a rich new first-hand data source. Purpose is the critical driver. There's a case to be made that a brand is its purpose. A clear and compelling purpose provides inner direction for the entrepreneur and the management team throughout the entrepreneurial journey. Shared purpose can bind customers to the brand. The same is true for a brand community; Mark Schaefer talks of bold, piercing purpose that aligns every resource of the company towards the community goal. Harley-Davidson is one (well-used) example: fulfilling dreams through the experience of motorcycling. The purpose is a customer experience, aligned with their values and open to their expansive and creative interpretation. Corporate purpose, when genuinely felt and well-expressed, Mark writes, can be existential (this is why we exist?), differentiating (how do we make a difference?), values-based (how are our founding values relevant to the world?), distinctive (what headlines will be written about us), adaptive (how is the world changing in a way that unites us with our community?) and fulfilling (how can we fulfill customers' dreams?) Additional Resources Mark's Books: Belonging To The Brand: Why Community Is The Last Great Marketing Strategy: Mises.org/E4B_204_Book1 Marketing Rebellion: The Most Human Company Wins: Mises.org/E4B_204_Book2 The Marketing Companion podcast: Mises.org/E4B_204_Pod Mark Schaefer website: BusinessesGrow.com

In economics, production and marketing are not separate concepts. Production responds to customers' needs and marketing is the expression of those needs inside the firm. The entire customer-facing activity of the firm is marketing. Like any other business activity, there is constant flux brought to bear by changing customer preferences, competitive innovation and market evolution. Marketing must be adaptive to change, and a major shift is occurring right now. Mark Schaefer writes about it in Belonging To The Brand: Why Community Is The Last Great Marketing Strategy. Knowledge Capsule Established strategies and tactics of marketing are no longer effective. Marketing thought-leader Mark Schaefer puts it this way: marketing doesn't work like it used to. The established techniques were biased towards outbound communication, such as advertising, PR and events. Mark classifies these techniques as “interrupt and annoy” to try to get customers to give their attention to feature and benefit of the company's offerings. The communications environment shifted from analog to digital and from outbound to interactive, but interrupt and annoy remained the primary technique. Finally, there's an alternative marketing strategy. The new strategy goes by the term “community” or “community building”. As economics advises, it's a product of customer sovereignty. People want to belong to communities that share values and interests. And in the digital age, where work-from-home and glued-to-a-screen are life conditions that can lead to profound loneliness, the need for belonging is amplified. The covid lockdown experience exacerbated the problem. Community is an experience that is highly valued by customer, distinguished via three features: Connection with each other. There's a group feeling of difference that's not shared with others who don't belong to the community.Purpose: community members gather because they have a shared reason to do so, whether it is software development or wine appreciation or the development of technical skills. There are shared rituals and traditions and common behaviors that generate a sense of group identity and bonding through common values.Relevance: A thriving community adapt and adjusts as times and members' needs change. Adaptability strengthens group cohesion and assures continuity and resilience. There's a business case for community building. Community-building may replace brand-building as a primary pathway to facilitating value for customers and thereby generating strong cash flows. The technique has a viable business model. Differentiation: when customers bond in community, they're differentiating themselves and the brand(s) they prefer and support. It's a lasting advantage.Market monitoring: a community is a continuing conversation, a source of insight and signals of change.High speed information: the flow of information from customers and markets to firms is another source of advantage. The behaviors and preferences of community members can be continuously polled, with the opportunity for fast response.Trust. Businesses are recognizing the importance of trust in relationships with ever-greater clarity. Brand communities are trusted by their members; trust is inherent.Advocacy. Community members become the marketer. They communicate benefits and positive experiences. User-generated content both reduces marketing costs and adds authenticity and belief.Loyalty: The most profitable customers are the most loyal customers. Community members are loyal, and, in fact, go beyond loyalty to “attachment”.Co-creation. Value is created by customers in their own experience, or it can be viewed as co-created through interactions with the firm and its products and services. In brand communities, there is community co-creation, such as in LEGO Ideas groups and the IKEA user community.Membership as a product: Some communities become the business modem as members pay both to join and maintain membership and purchase the products and services of the community.Cultural alignment: community is a trend, especially for younger people experiencing social and digital isolation.Customer data: when members freely express their values and preferences, they create a rich new first-hand data source. Purpose is the critical driver. There's a case to be made that a brand is its purpose. A clear and compelling purpose provides inner direction for the entrepreneur and the management team throughout the entrepreneurial journey. Shared purpose can bind customers to the brand. The same is true for a brand community; Mark Schaefer talks of bold, piercing purpose that aligns every resource of the company towards the community goal. Harley-Davidson is one (well-used) example: fulfilling dreams through the experience of motorcycling. The purpose is a customer experience, aligned with their values and open to their expansive and creative interpretation. Corporate purpose, when genuinely felt and well-expressed, Mark writes, can be existential (this is why we exist?), differentiating (how do we make a difference?), values-based (how are our founding values relevant to the world?), distinctive (what headlines will be written about us), adaptive (how is the world changing in a way that unites us with our community?) and fulfilling (how can we fulfill customers' dreams?) Additional Resources Mark's Books: Belonging To The Brand: Why Community Is The Last Great Marketing Strategy: Mises.org/E4B_204_Book1 Marketing Rebellion: The Most Human Company Wins: Mises.org/E4B_204_Book2 The Marketing Companion podcast: Mises.org/E4B_204_Pod Mark Schaefer website: BusinessesGrow.com

In economics, production and marketing are not separate concepts. Production responds to customers' needs and marketing is the expression of those needs inside the firm. The entire customer-facing activity of the firm is marketing. Like any other business activity, there is constant flux brought to bear by changing customer preferences, competitive innovation and market evolution. Marketing must be adaptive to change, and a major shift is occurring right now. Mark Schaefer writes about it in Belonging To The Brand: Why Community Is The Last Great Marketing Strategy. Knowledge Capsule Established strategies and tactics of marketing are no longer effective. Marketing thought-leader Mark Schaefer puts it this way: marketing doesn't work like it used to. The established techniques were biased towards outbound communication, such as advertising, PR and events. Mark classifies these techniques as “interrupt and annoy” to try to get customers to give their attention to feature and benefit of the company's offerings. The communications environment shifted from analog to digital and from outbound to interactive, but interrupt and annoy remained the primary technique. Finally, there's an alternative marketing strategy. The new strategy goes by the term “community” or “community building”. As economics advises, it's a product of customer sovereignty. People want to belong to communities that share values and interests. And in the digital age, where work-from-home and glued-to-a-screen are life conditions that can lead to profound loneliness, the need for belonging is amplified. The covid lockdown experience exacerbated the problem. Community is an experience that is highly valued by customer, distinguished via three features: Connection with each other. There's a group feeling of difference that's not shared with others who don't belong to the community.Purpose: community members gather because they have a shared reason to do so, whether it is software development or wine appreciation or the development of technical skills. There are shared rituals and traditions and common behaviors that generate a sense of group identity and bonding through common values.Relevance: A thriving community adapt and adjusts as times and members' needs change. Adaptability strengthens group cohesion and assures continuity and resilience. There's a business case for community building. Community-building may replace brand-building as a primary pathway to facilitating value for customers and thereby generating strong cash flows. The technique has a viable business model. Differentiation: when customers bond in community, they're differentiating themselves and the brand(s) they prefer and support. It's a lasting advantage.Market monitoring: a community is a continuing conversation, a source of insight and signals of change.High speed information: the flow of information from customers and markets to firms is another source of advantage. The behaviors and preferences of community members can be continuously polled, with the opportunity for fast response.Trust. Businesses are recognizing the importance of trust in relationships with ever-greater clarity. Brand communities are trusted by their members; trust is inherent.Advocacy. Community members become the marketer. They communicate benefits and positive experiences. User-generated content both reduces marketing costs and adds authenticity and belief.Loyalty: The most profitable customers are the most loyal customers. Community members are loyal, and, in fact, go beyond loyalty to “attachment”.Co-creation. Value is created by customers in their own experience, or it can be viewed as co-created through interactions with the firm and its products and services. In brand communities, there is community co-creation, such as in LEGO Ideas groups and the IKEA user community.Membership as a product: Some communities become the business modem as members pay both to join and maintain membership and purchase the products and services of the community.Cultural alignment: community is a trend, especially for younger people experiencing social and digital isolation.Customer data: when members freely express their values and preferences, they create a rich new first-hand data source. Purpose is the critical driver. There's a case to be made that a brand is its purpose. A clear and compelling purpose provides inner direction for the entrepreneur and the management team throughout the entrepreneurial journey. Shared purpose can bind customers to the brand. The same is true for a brand community; Mark Schaefer talks of bold, piercing purpose that aligns every resource of the company towards the community goal. Harley-Davidson is one (well-used) example: fulfilling dreams through the experience of motorcycling. The purpose is a customer experience, aligned with their values and open to their expansive and creative interpretation. Corporate purpose, when genuinely felt and well-expressed, Mark writes, can be existential (this is why we exist?), differentiating (how do we make a difference?), values-based (how are our founding values relevant to the world?), distinctive (what headlines will be written about us), adaptive (how is the world changing in a way that unites us with our community?) and fulfilling (how can we fulfill customers' dreams?) Additional Resources Mark's Books: Belonging To The Brand: Why Community Is The Last Great Marketing Strategy: Mises.org/E4B_204_Book1 Marketing Rebellion: The Most Human Company Wins: Mises.org/E4B_204_Book2 The Marketing Companion podcast: Mises.org/E4B_204_Pod Mark Schaefer website: BusinessesGrow.com

The concept of risk provides us with an excellent opportunity to bridge between formal economic theory and personal business experience. Economics provides us with rigorous understanding of risk and uncertainty and the distinctions between them and their various types. But risk — the word that we use in everyday conversation — bring with it subjective feelings that affect how we approach it. Knowledge Capsule It's appropriate for entrepreneurs to reframe the concept of risk so that they can embrace it wholeheartedly. Risk has traditionally been framed as the downside of a choice. It's the potential negative outcome for anything we try. But we just have to look at our own lives to see that a lot of risks we've taken have generated upside, whether that's choosing a college, getting married, or taking a particular job. If we feel good about the outcome, then risk is a path to reward. Part of the reframing of risk is to see it as a process rather than a single choice. Risk can sound like it comes at us as a single choice, or an event, or a once-and-for-all decision. It's much better to think of risk as a process — a behavioral process rather than a decision-making threshold. The risk process is one of experimentation —taking small steps, trying different things, getting feedback from the market, making adjustments, then trying some more things. Instead of “starting a business”, we can think of setting out on the pathway to entrepreneurship. Instead of “committing to a future new product launch”, we can think initiating an exploration with low resource commitment until we have better feedback knowledge in order to take the next step and commit more resources. We can think of a new initiative as an experience gap that we look to fill with knowledge from experts and experience from mentors or advisors who've done something similar. The key to this reframed risk process is a courageous commitment to perpetual learning. Through learning, we can all redefine our understanding of risk and re-establish our relationship with it. A part of risk is the ego-bruising realization that we don't know everything and can therefore make mistakes, or take actions that have unintended consequences. By embracing learning, we establish a social reward for not knowing — learning is viewed positively, as a reward. Developing new knowledge is one of the primary roles of the entrepreneur. While it may take intellectual courage to own up to not knowing, the courage is rewarded with new understanding and new advantages. There's always opportunity to learn more. Imagination is an antidote to risk. Imagination can overcome risk. We all have the capability of imagining future achievements — “future wins”, as Angie Morgan Witkowski put it. Imagination can be an exercise in creativity, and it's OK to let it run wild, releasing our minds from the restraints that risk can impose. Taking the time for free-thinking can be very beneficial. The pathway to the imagined future is to marry possibility with probability. In our exercise in imagination, it's easy to eliminate the impossible. But we shouldn't limit the possible. We can start from the imagined possible future and then work back through probabilities about whether we can accomplish it. Angie stimulated her business imagination vi a sidewalk margarita bar in Florida and ultimately opened a successful coffee shop in Traverse City, Michigan. It was a process of working backwards from what was possible to what was more probably, given her circumstances. Similarly, her consulting business started by imagining writing a book about a better style of leadership than is taught in business school. She contacted literary agents, who encouraged her not only to write the book but to also start a speaking business. The audience for her speaking engagements sought consulting help, and she developed a series of workshops as part of the delivery system. Her consulting business is now cross-industry, from startups to the oil-and-gas majors, and worldwide. It started with imagination. Imagination is complemented by hard work and realistic capacity assessment. It would be wrong to think that the reframing of risk to action and perpetual learning comes additional without costs. Angie mentioned two. One is hard work. All learning pathways must be undertaken with the commitment to working as hard as it takes to advance. It requires time, effort, and continuous review. The intellectual courage that Angie highlighted is hard work in itself — the cognitive work of thinking about how to think, exercising cognitive discipline, exploring flexible options such as design thinking, that require the effort of looking at problems from many different perspectives. The second cost Angie mentioned is the honest assessment of our capacity. We can imagine future wins and assess the probability of achieving them, but we must be honest about our capacity. Do we have the resources, do we have the skills, can we assemble the right team, are we willing to undertake the hard work? Putting hard work and capacity together means we don't risk an inadequate attempt to solve the target problem. As Angie put it, using Marines language, don't be “half-assed”. Action is more important than planning. Angie's prescription in her book, Bet On You, is for one-third of time to be allocated to planning and two-thirds making things happen. The make-things-happen part is what generates the feedback loop and learning that is so important. Here are Economics For Business, we'd probably relegate planning to 10% or less of resource allocation, but the point is the same. Action is the more important. There is one aspect of planning that can deliver extra value, and that's planning for failure, or contingency planning. Our imagination should be partially applied to imagining what could go wrong. How would the contingency transpire? What would we do next if it did? We should prepare for resilience in the aftermath of a setback. A plan, in Angie's words (which, in turn, come from the Marines), is a reference point for change. Ultimately, risk must feel good. If the antidote to the downside of risk is imagining future wins, then we can also benefit from a focus on the wins we experience every day. Choose the path that feels good both tomorrow and today, and that makes all efforts worthwhile. Additional Resources Bet On You: How To Win With Risk by Angie Morgan and Courtney Lynch: Mises.org/E4B_203_Book Bet On You Podcast: Mises.org/E4B_203_Podcast Angie Morgan Witkowski on LinkedIn: Mises.org/E4B_203_LinkedIn

The concept of risk provides us with an excellent opportunity to bridge between formal economic theory and personal business experience. Economics provides us with rigorous understanding of risk and uncertainty and the distinctions between them and their various types. But risk — the word that we use in everyday conversation — bring with it subjective feelings that affect how we approach it. Knowledge Capsule It's appropriate for entrepreneurs to reframe the concept of risk so that they can embrace it wholeheartedly. Risk has traditionally been framed as the downside of a choice. It's the potential negative outcome for anything we try. But we just have to look at our own lives to see that a lot of risks we've taken have generated upside, whether that's choosing a college, getting married, or taking a particular job. If we feel good about the outcome, then risk is a path to reward. Part of the reframing of risk is to see it as a process rather than a single choice. Risk can sound like it comes at us as a single choice, or an event, or a once-and-for-all decision. It's much better to think of risk as a process — a behavioral process rather than a decision-making threshold. The risk process is one of experimentation —taking small steps, trying different things, getting feedback from the market, making adjustments, then trying some more things. Instead of “starting a business”, we can think of setting out on the pathway to entrepreneurship. Instead of “committing to a future new product launch”, we can think initiating an exploration with low resource commitment until we have better feedback knowledge in order to take the next step and commit more resources. We can think of a new initiative as an experience gap that we look to fill with knowledge from experts and experience from mentors or advisors who've done something similar. The key to this reframed risk process is a courageous commitment to perpetual learning. Through learning, we can all redefine our understanding of risk and re-establish our relationship with it. A part of risk is the ego-bruising realization that we don't know everything and can therefore make mistakes, or take actions that have unintended consequences. By embracing learning, we establish a social reward for not knowing — learning is viewed positively, as a reward. Developing new knowledge is one of the primary roles of the entrepreneur. While it may take intellectual courage to own up to not knowing, the courage is rewarded with new understanding and new advantages. There's always opportunity to learn more. Imagination is an antidote to risk. Imagination can overcome risk. We all have the capability of imagining future achievements — “future wins”, as Angie Morgan Witkowski put it. Imagination can be an exercise in creativity, and it's OK to let it run wild, releasing our minds from the restraints that risk can impose. Taking the time for free-thinking can be very beneficial. The pathway to the imagined future is to marry possibility with probability. In our exercise in imagination, it's easy to eliminate the impossible. But we shouldn't limit the possible. We can start from the imagined possible future and then work back through probabilities about whether we can accomplish it. Angie stimulated her business imagination vi a sidewalk margarita bar in Florida and ultimately opened a successful coffee shop in Traverse City, Michigan. It was a process of working backwards from what was possible to what was more probably, given her circumstances. Similarly, her consulting business started by imagining writing a book about a better style of leadership than is taught in business school. She contacted literary agents, who encouraged her not only to write the book but to also start a speaking business. The audience for her speaking engagements sought consulting help, and she developed a series of workshops as part of the delivery system. Her consulting business is now cross-industry, from startups to the oil-and-gas majors, and worldwide. It started with imagination. Imagination is complemented by hard work and realistic capacity assessment. It would be wrong to think that the reframing of risk to action and perpetual learning comes additional without costs. Angie mentioned two. One is hard work. All learning pathways must be undertaken with the commitment to working as hard as it takes to advance. It requires time, effort, and continuous review. The intellectual courage that Angie highlighted is hard work in itself — the cognitive work of thinking about how to think, exercising cognitive discipline, exploring flexible options such as design thinking, that require the effort of looking at problems from many different perspectives. The second cost Angie mentioned is the honest assessment of our capacity. We can imagine future wins and assess the probability of achieving them, but we must be honest about our capacity. Do we have the resources, do we have the skills, can we assemble the right team, are we willing to undertake the hard work? Putting hard work and capacity together means we don't risk an inadequate attempt to solve the target problem. As Angie put it, using Marines language, don't be “half-assed”. Action is more important than planning. Angie's prescription in her book, Bet On You, is for one-third of time to be allocated to planning and two-thirds making things happen. The make-things-happen part is what generates the feedback loop and learning that is so important. Here are Economics For Business, we'd probably relegate planning to 10% or less of resource allocation, but the point is the same. Action is the more important. There is one aspect of planning that can deliver extra value, and that's planning for failure, or contingency planning. Our imagination should be partially applied to imagining what could go wrong. How would the contingency transpire? What would we do next if it did? We should prepare for resilience in the aftermath of a setback. A plan, in Angie's words (which, in turn, come from the Marines), is a reference point for change. Ultimately, risk must feel good. If the antidote to the downside of risk is imagining future wins, then we can also benefit from a focus on the wins we experience every day. Choose the path that feels good both tomorrow and today, and that makes all efforts worthwhile. Additional Resources Bet On You: How To Win With Risk by Angie Morgan and Courtney Lynch: Mises.org/E4B_203_Book Bet On You Podcast: Mises.org/E4B_203_Podcast Angie Morgan Witkowski on LinkedIn: Mises.org/E4B_203_LinkedIn

Entrepreneurial business solutions can lead to better outcomes in every economic endeavor. In the field of medical care, entrepreneurship has been hampered by non-market arrangements. There's some sense of an emerging trend towards better choices for users, a trend that we discuss with economist Dr. Murray Sabrin. Knowledge Capsule All systems evolve. The current system of medical care uncoupled from private markets evolved in ways that result in higher costs and poorer outcomes. Our economy — and the economic experience of all of us as individuals — would be improved (i.e., greater customer value would be experienced) if we could lighten the burdensome weight of government regulation and its consequent effects on the system of medical care and medical insurance. Our homeowners insurance, our automobile insurance and our life insurance are market products that give us the experience of seeking information and making informed choices based on pricing and perceived benefits. Medical insurance has evolved differently — it's tied to work and puts us in a medical system where prices and choices are opaque and highly constrained. The associated costs are a great burden on the economy, and they result in diversions of productive investment from better uses. The evolution of employment-linked healthcare began in dangerous industries like forestry logging, when employers introduced on—site medical care to treat on-the-job accidents — employers understood the mutual benefit of a healthy workforce. During and after World War II, the incentives for employers shifted: wage controls prevented them from attracting workers with higher pay, and so they introduced the benefit of tax-free healthcare benefits. An industry linking employment and medical care grew by leaps and bounds. Today, both employers and employees are beginning to understand the drawbacks of the evolved system. In the evolved medical care system today, employees feel constrained because they can't freely choose their doctors and service providers, and healthcare treatments they might want are often made unavailable to them. They're not made aware of pricing, and therefore unable to make informed choices. Employers are beginning to understand the high costs for traditional indemnity insurance, and many of them are seeking alternatives. Dr. Sabrin listed a number of these emerging innovations. 1. Employer self-insurance. Instead of incurring the heavy cost of insuring via the conglomerates like Blue Cross Blue Shield, Humana, Aetna, United Healthcare and others, many employers are shifting to self-insurance, hiring an independent third-party administrator to set premiums for normal expenses, and utilizing re-insurance against the cost of catastrophic medical events. 2. Medical savings accounts. Financial innovation has opened the possibility of utilizing current savings for future medical expenses, ideally deposited tax free, appreciating tax free and withdrawn tax free (although, inevitably, there are government restrictions). It's another component in the free-market medicine revolution. 3. Medical cost sharing. Some affinity groups take the route of medical cost sharing — groups pooling funds to pay individual medical costs. Some of these groups may create membership lifestyle qualifications — non-drinkers, non-smokers, etc. — to link healthy behaviors to lower medical care costs. 5. Wellness rather than healthcare. The realization is dawning that medical care costs are inflated by unhealthy lifestyles. Employers and employees share a mutual interest in a healthier workplace and healthier workforce. Better alignment of incentives could encourage healthier eating and drinking habits, greater levels of exercise, and generally more health-conscious behavior. The feeling of entitlement to healthcare that can result in a lowered drive to stay healthy is a moral hazard that has been induced by the current medical care system. Reducing medical care costs via a healthier workforce is a win-win for employee and employer alike. Restoring the doctor-patient relationship via Direct Primary Care. The primary care doctor who has a knowing and caring relationship with individual patients, and who knows their ailments and their lifestyle, and their family and economic circumstances, is a historical tradition in American life, a part of the American dream. The corporate medical care system took this relationship away in many ways, replacing it with an impersonal system of “in-network” availability of physicians with no personal relationship component. Direct Primary Care is restoring the doctor-patient relationship following principles of entrepreneurial business design. A doctor contracts with a small number of patients — few enough to ensure availability and access — who pay a subscription fee, sufficient to provide cash flow for the doctor's office and immediate support functions. The doctor constructs a personally curated set of network connections to specialists, such as cardiologists or urologists, and to services such as imaging and lab analysis, so that patients can be directly connected with pre-selected and approved providers for specialist needs. Direct Primary Care can eliminate or circumnavigate much of the bureaucracy, paperwork, and creativity-stifling sclerosis of current day corporate medical care systems. 6. Pricing transparency. A parallel innovation to DPC is demonstrated in transparent pricing clinics and surgeries, the clearest example being provided by Surgery Center Of Oklahoma (SCOO) which famously provides an open price list for commonplace surgeries, with no surprise surcharges or hidden fees. These prices are often much, much lower than would be charged for the same service by corporate hospitals; the quality is often higher; the speed of getting an appointment is faster; and the most important trait is that the pricing is transparent to the end-user. Patients become consumers in the traditional sense of the word — able to make a free choice based on open pricing information. 7. Better self-monitoring. How's your health? You may not have sufficient information for a good answer – the medical care system often makes information hard to access. One improvement is the self-monitoring that is technologically enabled today. Your Apple watch, for example, can tell you a lot about your vital signs, as can apps+devices like Kardia or a simple scale. Consumers may also be able to find a local DPC doctor or naturopath with whom to share the data for recommendations on natural solutions for any signals they might detect. This is a decentralized approach to healthcare that's consistent with the general trend away from restrictive top-down centralized structures and processes. Additional Resources The Finance of Health Care: Wellness and Innovative Approaches to Employee Medical Insurance by Murray Sabrin: Mises.org/E4B_202_Book1 From Immigrant to Public Intellectual: An American Story by Murray Sabrin: Mises.org/E4B_202_Book2 MurraySabrin.com MurraySabrin.Substack.com

Entrepreneurial business solutions can lead to better outcomes in every economic endeavor. In the field of medical care, entrepreneurship has been hampered by non-market arrangements. There's some sense of an emerging trend towards better choices for users, a trend that we discuss with economist Dr. Murray Sabrin. Knowledge Capsule All systems evolve. The current system of medical care uncoupled from private markets evolved in ways that result in higher costs and poorer outcomes. Our economy — and the economic experience of all of us as individuals — would be improved (i.e., greater customer value would be experienced) if we could lighten the burdensome weight of government regulation and its consequent effects on the system of medical care and medical insurance. Our homeowners insurance, our automobile insurance and our life insurance are market products that give us the experience of seeking information and making informed choices based on pricing and perceived benefits. Medical insurance has evolved differently — it's tied to work and puts us in a medical system where prices and choices are opaque and highly constrained. The associated costs are a great burden on the economy, and they result in diversions of productive investment from better uses. The evolution of employment-linked healthcare began in dangerous industries like forestry logging, when employers introduced on—site medical care to treat on-the-job accidents — employers understood the mutual benefit of a healthy workforce. During and after World War II, the incentives for employers shifted: wage controls prevented them from attracting workers with higher pay, and so they introduced the benefit of tax-free healthcare benefits. An industry linking employment and medical care grew by leaps and bounds. Today, both employers and employees are beginning to understand the drawbacks of the evolved system. In the evolved medical care system today, employees feel constrained because they can't freely choose their doctors and service providers, and healthcare treatments they might want are often made unavailable to them. They're not made aware of pricing, and therefore unable to make informed choices. Employers are beginning to understand the high costs for traditional indemnity insurance, and many of them are seeking alternatives. Dr. Sabrin listed a number of these emerging innovations. 1. Employer self-insurance. Instead of incurring the heavy cost of insuring via the conglomerates like Blue Cross Blue Shield, Humana, Aetna, United Healthcare and others, many employers are shifting to self-insurance, hiring an independent third-party administrator to set premiums for normal expenses, and utilizing re-insurance against the cost of catastrophic medical events. 2. Medical savings accounts. Financial innovation has opened the possibility of utilizing current savings for future medical expenses, ideally deposited tax free, appreciating tax free and withdrawn tax free (although, inevitably, there are government restrictions). It's another component in the free-market medicine revolution. 3. Medical cost sharing. Some affinity groups take the route of medical cost sharing — groups pooling funds to pay individual medical costs. Some of these groups may create membership lifestyle qualifications — non-drinkers, non-smokers, etc. — to link healthy behaviors to lower medical care costs. 5. Wellness rather than healthcare. The realization is dawning that medical care costs are inflated by unhealthy lifestyles. Employers and employees share a mutual interest in a healthier workplace and healthier workforce. Better alignment of incentives could encourage healthier eating and drinking habits, greater levels of exercise, and generally more health-conscious behavior. The feeling of entitlement to healthcare that can result in a lowered drive to stay healthy is a moral hazard that has been induced by the current medical care system. Reducing medical care costs via a healthier workforce is a win-win for employee and employer alike. Restoring the doctor-patient relationship via Direct Primary Care. The primary care doctor who has a knowing and caring relationship with individual patients, and who knows their ailments and their lifestyle, and their family and economic circumstances, is a historical tradition in American life, a part of the American dream. The corporate medical care system took this relationship away in many ways, replacing it with an impersonal system of “in-network” availability of physicians with no personal relationship component. Direct Primary Care is restoring the doctor-patient relationship following principles of entrepreneurial business design. A doctor contracts with a small number of patients — few enough to ensure availability and access — who pay a subscription fee, sufficient to provide cash flow for the doctor's office and immediate support functions. The doctor constructs a personally curated set of network connections to specialists, such as cardiologists or urologists, and to services such as imaging and lab analysis, so that patients can be directly connected with pre-selected and approved providers for specialist needs. Direct Primary Care can eliminate or circumnavigate much of the bureaucracy, paperwork, and creativity-stifling sclerosis of current day corporate medical care systems. 6. Pricing transparency. A parallel innovation to DPC is demonstrated in transparent pricing clinics and surgeries, the clearest example being provided by Surgery Center Of Oklahoma (SCOO) which famously provides an open price list for commonplace surgeries, with no surprise surcharges or hidden fees. These prices are often much, much lower than would be charged for the same service by corporate hospitals; the quality is often higher; the speed of getting an appointment is faster; and the most important trait is that the pricing is transparent to the end-user. Patients become consumers in the traditional sense of the word — able to make a free choice based on open pricing information. 7. Better self-monitoring. How's your health? You may not have sufficient information for a good answer – the medical care system often makes information hard to access. One improvement is the self-monitoring that is technologically enabled today. Your Apple watch, for example, can tell you a lot about your vital signs, as can apps+devices like Kardia or a simple scale. Consumers may also be able to find a local DPC doctor or naturopath with whom to share the data for recommendations on natural solutions for any signals they might detect. This is a decentralized approach to healthcare that's consistent with the general trend away from restrictive top-down centralized structures and processes. Additional Resources The Finance of Health Care: Wellness and Innovative Approaches to Employee Medical Insurance by Murray Sabrin: Mises.org/E4B_202_Book1 From Immigrant to Public Intellectual: An American Story by Murray Sabrin: Mises.org/E4B_202_Book2 MurraySabrin.com MurraySabrin.Substack.com

It's the ambition of every entrepreneurial business to advance from a standing start to customer—recognized leadership in its chosen field. It's achievable, even without breakthrough technology and venture capital financing. Trini Amador's Gracianna Winery is one of our Economics For Business entrepreneurial businesses of the year for 2022 for precisely such a journey story. Trini joins us to review the principles, processes and programs that are driving success. Knowledge Capsule Gracianna is the most awarded winery. Metrics of success can vary across categories and industries. In the wine industry, awards presented in tastings conducted by prestigious panels and arbiters are important signals to customers. In a recent period, Gracianna winery, a small craft producer in the highly competitive Russian River wine area of Sonoma County, California, has become the most awarded in its class. And since that class is, by the owner's choice, world-class — the best-of-the-best — the achievement is elevated to the highest possible level. Examples of the awards won include gold medals at the Sommeliers Choice Awards and the Sunset International Wine Competition, and double gold at the Los Angeles International Wine Competition. More awards are listed at Gracianna.com/Awards Gracianna winery has also won hospitality awards for its tours and wine tastings, including a #1 position on TripAdvisor for Things To Do In Healdsburg, CA (out of 117 competing alternatives). Everything begins with a commitment to understanding customer needs. Trini and his family set themselves a goal of making a mark as a world class winery. They've certainly done that. How? Trini Amador is an entrepreneur in the Austrian tradition: the entire journey starts with deep understanding of customers and their needs. Who are the people who enjoy world class wines and associated experiences, and why do they choose to participate in this industry as consumers? What kind of experiences do they seek? How do they want to feel about those experiences? Why do they undertake travel to visit different wineries? Why do they choose California, and Sonoma County and the Westside Highway in the Russian River Valley? How do they like to buy online? Why do they join wine clubs? All of these choices are emotionally driven — the answers lie in the heart and not the data. Becoming a world class winery is a direction of travel, and the destination becomes clear with more and more learning about customers and their needs, wants and preferences. Brand vision is integrated with customer understanding and empathy. Focus and feedback can take a brand to the top. Trini describes his company and his team as obsessively focused on customers. As they collect more and more customer knowledge via more and more interactions, the better they get at serving customer needs. There are really only two I techniques: listen and observe. Since the Gracianna experience includes onsite tastings and tours, the Gracianna team can meet customers face to face and listen for their responses, preferences and hopes. And since all Gracianna wine is sold direct via the internet, butting activity can be observed directly. The requisite business skill is always to pay attention for signals, and always attend to the feedback that results from interaction. All guests are self—selecting themselves to be part of the Gracianna story. They've chosen the relationship. Gleaning the motivation behind their doing so is the goal of the marketing team. Consistent, precise execution is more important than strategy. Once the brand's direction is set, and an initial understand of customers is established, then execution takes over. Execution is a daily discipline, and the power tool is consistency: establishing a high standard and maintaining it in every action. It's perfectly possible to build a brand this way. Trini likened his approach to building a bird's next — one twig at a time. Every act of execution, every customer service interaction, every e—mail and every tasting service is another twig added to a perfectly shaped, ultra—strong construction. Small brands can claim ownership of an equity this way (such as “best tasting room experience” on TripAdvisor) without expensive investment in communications; just execute, execute, execute. Let employees on the team exercise both their responsibility and their creativity in precision execution. Always aim for effectiveness (the best possible execution) rather than efficiency (the lowest cost or least—resource execution). The best kind of planning is contingency planning to establish a prepared adaptiveness. Wine is, at its fundamental level, an agricultural business. Trini calls it rhythmic — grow, harvest, make wine, store wine, release a vintage. No two growing seasons are ever alike. In addition, there can be crises — excess rain, floods, unusual growing temperatures, fires, pests. The best way to deal with these variations is contingency planning, i.e., imagining all the things that could go wrong and having a set of actions in mind if they do. Adaptiveness is a core attribute for all entrepreneurs, and is especially applicable in wine. Explore and expand is an orientation that fully applies — once the curves that nature throws have been negotiated. The greatest entrepreneurial attribute is courage. In face of all the challenges and amidst all the uncertainty of an entrepreneurial business, Trini maintains that the key to a successful outcome is not so much strategy as courage. Make the best decisions you possibly can based on understanding customer needs, and then have the courage to act on the decision. The action generates interaction, which results in feedback, which provides the knowledge and energy for the next decision and next action. Courage is the entrepreneur's best business tool. Additional Resources "Gracianna: Award Winning Winemaking and Entrepreneurship" (video): Mises.org/E4B_201_Video Gracianna.com Lisa Amador's Cookbook, Comfort! A Gracianna Member-Inspired Cookbook: Mises.org/E4B_201_Cookbook Trini Amador's "Brand Uniqueness Blueprint" (PDF): Mises.org/E4B_201_PDF

It's the ambition of every entrepreneurial business to advance from a standing start to customer—recognized leadership in its chosen field. It's achievable, even without breakthrough technology and venture capital financing. Trini Amador's Gracianna Winery is one of our Economics For Business entrepreneurial businesses of the year for 2022 for precisely such a journey story. Trini joins us to review the principles, processes and programs that are driving success. Knowledge Capsule Gracianna is the most awarded winery. Metrics of success can vary across categories and industries. In the wine industry, awards presented in tastings conducted by prestigious panels and arbiters are important signals to customers. In a recent period, Gracianna winery, a small craft producer in the highly competitive Russian River wine area of Sonoma County, California, has become the most awarded in its class. And since that class is, by the owner's choice, world-class — the best-of-the-best — the achievement is elevated to the highest possible level. Examples of the awards won include gold medals at the Sommeliers Choice Awards and the Sunset International Wine Competition, and double gold at the Los Angeles International Wine Competition. More awards are listed at Gracianna.com/Awards Gracianna winery has also won hospitality awards for its tours and wine tastings, including a #1 position on TripAdvisor for Things To Do In Healdsburg, CA (out of 117 competing alternatives). Everything begins with a commitment to understanding customer needs. Trini and his family set themselves a goal of making a mark as a world class winery. They've certainly done that. How? Trini Amador is an entrepreneur in the Austrian tradition: the entire journey starts with deep understanding of customers and their needs. Who are the people who enjoy world class wines and associated experiences, and why do they choose to participate in this industry as consumers? What kind of experiences do they seek? How do they want to feel about those experiences? Why do they undertake travel to visit different wineries? Why do they choose California, and Sonoma County and the Westside Highway in the Russian River Valley? How do they like to buy online? Why do they join wine clubs? All of these choices are emotionally driven — the answers lie in the heart and not the data. Becoming a world class winery is a direction of travel, and the destination becomes clear with more and more learning about customers and their needs, wants and preferences. Brand vision is integrated with customer understanding and empathy. Focus and feedback can take a brand to the top. Trini describes his company and his team as obsessively focused on customers. As they collect more and more customer knowledge via more and more interactions, the better they get at serving customer needs. There are really only two I techniques: listen and observe. Since the Gracianna experience includes onsite tastings and tours, the Gracianna team can meet customers face to face and listen for their responses, preferences and hopes. And since all Gracianna wine is sold direct via the internet, butting activity can be observed directly. The requisite business skill is always to pay attention for signals, and always attend to the feedback that results from interaction. All guests are self—selecting themselves to be part of the Gracianna story. They've chosen the relationship. Gleaning the motivation behind their doing so is the goal of the marketing team. Consistent, precise execution is more important than strategy. Once the brand's direction is set, and an initial understand of customers is established, then execution takes over. Execution is a daily discipline, and the power tool is consistency: establishing a high standard and maintaining it in every action. It's perfectly possible to build a brand this way. Trini likened his approach to building a bird's next — one twig at a time. Every act of execution, every customer service interaction, every e—mail and every tasting service is another twig added to a perfectly shaped, ultra—strong construction. Small brands can claim ownership of an equity this way (such as “best tasting room experience” on TripAdvisor) without expensive investment in communications; just execute, execute, execute. Let employees on the team exercise both their responsibility and their creativity in precision execution. Always aim for effectiveness (the best possible execution) rather than efficiency (the lowest cost or least—resource execution). The best kind of planning is contingency planning to establish a prepared adaptiveness. Wine is, at its fundamental level, an agricultural business. Trini calls it rhythmic — grow, harvest, make wine, store wine, release a vintage. No two growing seasons are ever alike. In addition, there can be crises — excess rain, floods, unusual growing temperatures, fires, pests. The best way to deal with these variations is contingency planning, i.e., imagining all the things that could go wrong and having a set of actions in mind if they do. Adaptiveness is a core attribute for all entrepreneurs, and is especially applicable in wine. Explore and expand is an orientation that fully applies — once the curves that nature throws have been negotiated. The greatest entrepreneurial attribute is courage. In face of all the challenges and amidst all the uncertainty of an entrepreneurial business, Trini maintains that the key to a successful outcome is not so much strategy as courage. Make the best decisions you possibly can based on understanding customer needs, and then have the courage to act on the decision. The action generates interaction, which results in feedback, which provides the knowledge and energy for the next decision and next action. Courage is the entrepreneur's best business tool. Additional Resources "Gracianna: Award Winning Winemaking and Entrepreneurship" (video): Mises.org/E4B_201_Video Gracianna.com Lisa Amador's Cookbook, Comfort! A Gracianna Member-Inspired Cookbook: Mises.org/E4B_201_Cookbook Trini Amador's "Brand Uniqueness Blueprint" (PDF): Mises.org/E4B_201_PDF

We've conducted 99 conversations with value-creating entrepreneurs, and we've conducted about 100 Q&As with business school professors who research and teach value creation. Here's a headline summary of what we've learned. Knowledge Capsule 1) A firm is defined by its purpose. Firms with a clear purpose that aligns everyone who works there, along with all suppliers and partners and customers, perform at a high level over the long term. Lack of clarity of purpose is associated with fluctuating performance and often with “fade” — permitting competitors and market changes to erode away a firm's advantage. Knowledge Capsule #199: Mises.org/E4B_200_A 2) A successful firm's purpose is always based on value for customers. Purposeful firms identify a vision of value received by the customer, and commit themselves to it. They craft a business model to deliver the vision, including continuous increases in efficiency and continuous innovation, thus expanding the value space in which they operate. They build and maintain strong relationships in all directions. They look to the long term, including future generations. Per Bylund and Mark Packard on Subjective Value, The New Economics Of Value and Value Creation: Mises.org/E4B_200_B Econ4Business.com/value 3) Firms need a deep understanding of value. We say in Austrian economics that value is subjective. It's formed entirely in the mind of the customer, as result of a customer's learning process: becoming aware of a firm's offering, evaluating its attractiveness, comparing it with alternatives, putting it to use and assessing whether the usage experience met expectations. They learn from their own perspective, in their own context, and in the process of running their own system (their household, their office, their factory) and living through dynamic changes that alter their perspective. Value is a 2-way flow: the value proposition flows to the customer, and the value experience flows back to the firm as cash flow and feedback. The value cycle is complex and understanding it is very demanding, as is understanding the customer and their system. Winning firms work hard to build a deep value knowledge. The Value Learning Process: Mises.org/E4B_200_C 4) Purpose + Value Creation + Entrepreneurship. In Austrian economics, entrepreneurship is the driver of the business system. The term is often misinterpreted as pertaining to start-ups and small business innovation. It actually pertains to value creation. Entrepreneurship is an approach to business that starts with the customer and their needs — a definition of what new value opportunities are currently unmet — and develops the knowledge and assembles the capability to craft a product or service to meet those needs. There is time uncertainty and resource risk in committing to this development. Any firm and any project that pursues this new knowledge with the intent of creating new customer value is entrepreneurial, irrespective of scale. Entrepreneurship also weeds out elements that are not value drivers — bureaucracy, obsolete assets and unproductive infrastructure such as luxury office suites. Entrepreneurial firms are focused and efficient. This is Value Entrepreneurship: Mises.org/E4B_200_D 5) Entrepreneurial firms operate unique value-centric business models. Entrepreneurship is action, and the set of actions the firm takes to make money consistently over the long term is called the business model. Business models vary by industry — some industries are more profitable than others — and by firm — in every industry, there is something about some firms that makes them more profitable than others. That something is their business model. The business model that emerges from 199 Economics For Business episodes is the 4V's model: Value understanding: building an advantaged and exclusive knowledge base on understanding your chosen customers and their value needs and value preferences. Value facilitation: designing and assembling a system to meet those needs and preferences and taking it to market for feedback on customer acceptance and approval. Value exchange: market implementation at scale to generate reliable recurring cash flows from customer purchases and relationships. Value agility: systems to receive and respond to feedback in a dynamic, responsive flow. Per Bylund introduces the Austrian Business Model: Mises.org/E4B_200_E The Austrian Business Model Video: Mises.org/E4B_200_F Hermann Morris's Business Model: Educate The Industry: Mises.org/E4B_200_G 6. The entrepreneurial mindset is different. Over 199 episodes, we observed the following characteristics of the entrepreneurial mindset: Greater capacity for imagination: imagining great futures for customers; Better judgment: judgment is intent (the strong emotional relationship with a desired successful outcome), plus intuitive decision-making when data are incomplete, plus confidence in action-as-experimentation, whatever the degree of uncertainty; Learning: entrepreneurial firms are learning machines, and especially good at challenging their own assumptions. Empathy: the skill to understand how customers feel subjective value, and to process data through the customer's mental model; Orchestration: entrepreneurial firms seldom have direct control over all the resources required to deliver value, and they are expert at orchestrating others' resources, including their time and skills and knowledge. Embrace of change: entrepreneurs don't fear change, they welcome it as an opportunity. Peter Klein: Opportunities Don't “Exist”. Entrepreneurs Create Them: Mises.org/E4B_200_H Victor Chor's Entrepreneurial Orientation: Mises.org/E4B_200_I 7. Explore and expand. Entrepreneurial firms not only embrace change, they make it, through a process we call explore and expand. It means always running lots of experiments to see what works unexpectedly. Experiments should be designed to refute existing assumptions. There should be a wide variation of experiments, not just a series of nuanced changes. Entrepreneurs look for a big variation in outcome and so they make big variations in inputs. The Age Of Strategy Is Over: The Replacement Is Explore And Expand: Mises.org/E4B_200_J 8. Harnessing the highest values. What guides customers' behaviors are not features and attributes, like pricing and performance metrics and guarantees, but values. The firmest guidance comes from the highest values. If a customer's highest value is family security, they'll never buy any offering that doesn't align with their value system. Successful entrepreneurial firms know how to climb the values ladder from features to highest value, providing strong rungs at every level, and always going all the way to the top. Internally for business, the highest values are service to others, delivered in the form of value creation, and ethical behavior. Value As A Basis For Business Building: Mises.org/E4B_200_K 9. Managing the loop Business is a flow. In business-as-a-flow, there's no start and no finish. It's non-linear. The environment is entirely uncertain and unpredictable. A business forms its intent, and then chooses and implements actions it judges will advance that intent. There's no way to know what the result will be, and so the business commits to receiving and reading the feedback, making appropriate adjustments, and then implementing new, adjusted actions, to gain the next round of feedback. This is the flow of knowledge-building, and it flows as a repeated loop, with the same process but different actions, new learning and continuous adjustment. With sound and active monitoring and management, the loop will generate some durable learning that merit repeated action. Cash flow will flow back to the company, and profitable returns will grow. The loop can be self-reinforcing. Mark McGrath: OODA Loop: Mises.org/E4B_200_L Bart Madden: Proficiency With The Knowledge-Building Loop Is The Key To Value Creation: Mises.org/E4B_200_M

We've conducted 99 conversations with value-creating entrepreneurs, and we've conducted about 100 Q&As with business school professors who research and teach value creation. Here's a headline summary of what we've learned. Knowledge Capsule 1) A firm is defined by its purpose. Firms with a clear purpose that aligns everyone who works there, along with all suppliers and partners and customers, perform at a high level over the long term. Lack of clarity of purpose is associated with fluctuating performance and often with “fade” — permitting competitors and market changes to erode away a firm's advantage. Knowledge Capsule #199: Mises.org/E4B_200_A 2) A successful firm's purpose is always based on value for customers. Purposeful firms identify a vision of value received by the customer, and commit themselves to it. They craft a business model to deliver the vision, including continuous increases in efficiency and continuous innovation, thus expanding the value space in which they operate. They build and maintain strong relationships in all directions. They look to the long term, including future generations. Per Bylund and Mark Packard on Subjective Value, The New Economics Of Value and Value Creation: Mises.org/E4B_200_B Econ4Business.com/value 3) Firms need a deep understanding of value. We say in Austrian economics that value is subjective. It's formed entirely in the mind of the customer, as result of a customer's learning process: becoming aware of a firm's offering, evaluating its attractiveness, comparing it with alternatives, putting it to use and assessing whether the usage experience met expectations. They learn from their own perspective, in their own context, and in the process of running their own system (their household, their office, their factory) and living through dynamic changes that alter their perspective. Value is a 2-way flow: the value proposition flows to the customer, and the value experience flows back to the firm as cash flow and feedback. The value cycle is complex and understanding it is very demanding, as is understanding the customer and their system. Winning firms work hard to build a deep value knowledge. The Value Learning Process: Mises.org/E4B_200_C 4) Purpose + Value Creation + Entrepreneurship. In Austrian economics, entrepreneurship is the driver of the business system. The term is often misinterpreted as pertaining to start-ups and small business innovation. It actually pertains to value creation. Entrepreneurship is an approach to business that starts with the customer and their needs — a definition of what new value opportunities are currently unmet — and develops the knowledge and assembles the capability to craft a product or service to meet those needs. There is time uncertainty and resource risk in committing to this development. Any firm and any project that pursues this new knowledge with the intent of creating new customer value is entrepreneurial, irrespective of scale. Entrepreneurship also weeds out elements that are not value drivers — bureaucracy, obsolete assets and unproductive infrastructure such as luxury office suites. Entrepreneurial firms are focused and efficient. This is Value Entrepreneurship: Mises.org/E4B_200_D 5) Entrepreneurial firms operate unique value-centric business models. Entrepreneurship is action, and the set of actions the firm takes to make money consistently over the long term is called the business model. Business models vary by industry — some industries are more profitable than others — and by firm — in every industry, there is something about some firms that makes them more profitable than others. That something is their business model. The business model that emerges from 199 Economics For Business episodes is the 4V's model: Value understanding: building an advantaged and exclusive knowledge base on understanding your chosen customers and their value needs and value preferences. Value facilitation: designing and assembling a system to meet those needs and preferences and taking it to market for feedback on customer acceptance and approval. Value exchange: market implementation at scale to generate reliable recurring cash flows from customer purchases and relationships. Value agility: systems to receive and respond to feedback in a dynamic, responsive flow. Per Bylund introduces the Austrian Business Model: Mises.org/E4B_200_E The Austrian Business Model Video: Mises.org/E4B_200_F Hermann Morris's Business Model: Educate The Industry: Mises.org/E4B_200_G 6. The entrepreneurial mindset is different. Over 199 episodes, we observed the following characteristics of the entrepreneurial mindset: Greater capacity for imagination: imagining great futures for customers; Better judgment: judgment is intent (the strong emotional relationship with a desired successful outcome), plus intuitive decision-making when data are incomplete, plus confidence in action-as-experimentation, whatever the degree of uncertainty; Learning: entrepreneurial firms are learning machines, and especially good at challenging their own assumptions. Empathy: the skill to understand how customers feel subjective value, and to process data through the customer's mental model; Orchestration: entrepreneurial firms seldom have direct control over all the resources required to deliver value, and they are expert at orchestrating others' resources, including their time and skills and knowledge. Embrace of change: entrepreneurs don't fear change, they welcome it as an opportunity. Peter Klein: Opportunities Don't “Exist”. Entrepreneurs Create Them: Mises.org/E4B_200_H Victor Chor's Entrepreneurial Orientation: Mises.org/E4B_200_I 7. Explore and expand. Entrepreneurial firms not only embrace change, they make it, through a process we call explore and expand. It means always running lots of experiments to see what works unexpectedly. Experiments should be designed to refute existing assumptions. There should be a wide variation of experiments, not just a series of nuanced changes. Entrepreneurs look for a big variation in outcome and so they make big variations in inputs. The Age Of Strategy Is Over: The Replacement Is Explore And Expand: Mises.org/E4B_200_J 8. Harnessing the highest values. What guides customers' behaviors are not features and attributes, like pricing and performance metrics and guarantees, but values. The firmest guidance comes from the highest values. If a customer's highest value is family security, they'll never buy any offering that doesn't align with their value system. Successful entrepreneurial firms know how to climb the values ladder from features to highest value, providing strong rungs at every level, and always going all the way to the top. Internally for business, the highest values are service to others, delivered in the form of value creation, and ethical behavior. Value As A Basis For Business Building: Mises.org/E4B_200_K 9. Managing the loop Business is a flow. In business-as-a-flow, there's no start and no finish. It's non-linear. The environment is entirely uncertain and unpredictable. A business forms its intent, and then chooses and implements actions it judges will advance that intent. There's no way to know what the result will be, and so the business commits to receiving and reading the feedback, making appropriate adjustments, and then implementing new, adjusted actions, to gain the next round of feedback. This is the flow of knowledge-building, and it flows as a repeated loop, with the same process but different actions, new learning and continuous adjustment. With sound and active monitoring and management, the loop will generate some durable learning that merit repeated action. Cash flow will flow back to the company, and profitable returns will grow. The loop can be self-reinforcing. Mark McGrath: OODA Loop: Mises.org/E4B_200_L Bart Madden: Proficiency With The Knowledge-Building Loop Is The Key To Value Creation: Mises.org/E4B_200_M

Value for customers is the purpose of all entrepreneurial business. Firms big and small must know, follow, and adhere to the principles of value creation. This is pragmatic not theoretical — the consequence of a failure to do so is that the firm cannot survive. Bartley J. Madden studied value creating firms as a co-founder of a successful investment research firm and then managing director of Credit Suisse HOLT. He is now an independent researcher and founder of the Madden Center For Value Creation in the College of Business at Florida Atlantic University. He joins the Economics For Business podcast and shared a summary of a lifetime of research. Knowledge Capsule A systems thinking approach provides the best route to understanding value creation. The business firm is a sub-system within a bigger system, that of society. The effectiveness of the firm is tied to organizational learning and the evolution of dynamic capabilities. Bart Madden's pragmatic theory of the firm treats it as a holistic system with a well-defined purpose. If it is successful in achieving its purpose, it will benefit the larger societal system. The purpose of the firm is a four-fold composition of mutually reinforcing goals. Sometimes, the business literature is guilty of treating purpose as a PR statement, a catchphrase that can be communicated without it necessarily governing the firm's behavior. Bart Madden's view of purpose demonstrates much greater depth, appropriate for complex systems management. Purpose is 4-fold: A vision of the value that can be realized by customers, and that can inspire and motivate employees to work for a firm committed to ethical behavior and making the world a better place through customer value. [[{"fid":"137418","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 1","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"1":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 1","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Example 1","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"1"}}]] Customers consume value by experiencing it in their interactions and relationships with the firm. The customer's experience is dynamic within their own system of competitive offerings and alternative choices.Survive and prosper through continual gains in efficiency and sustained innovation. These are long term performance variables that depend directly on a firm's knowledge-building proficiency. A firm must generate a return that is greater than the cost of capital, and as it matures, this return can be eroded away by competitors who offer lower prices or different features to customers. Building knowledge and translating it into new business capabilities is critical for long-term survival. [[{"fid":"137419","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 2","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"2":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 2","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Example 2","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"2"}}]]Work continuously to sustain win-win relationships in every direction. Relationships with customers are primary for value creation, and relationships with employees and managers must generate the understanding, motivation and commitment to delivering customer value, while relationships with suppliers, collaborating firms and other partners must result in their best support for value creation. It's a way of living and doing business that engenders trust all around. Shareholders are also rewarded as a consequence of these relationships.Take care of future generations. The long-term view of the pragmatic theory of the firm as a system within the bigger system of society emphasizes thoughtful concern for the future, so that return on capital can be sustained. Paying attention to minimizing waste in the earliest product and service design stages can serve the future, and this includes minimizing pollution (a form of waste) and reducing harm to the environment.[[{"fid":"137421","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 3","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"4":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 3","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Example 3","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"4"}}]] A firm that is successful in achieving its four-part purpose benefits customers, employees, partners, suppliers and shareholders, as well as society at large. Nurturing and sustaining a knowledge-building culture is the most critical driver of long-term performance. Knowledge-building is a continuous loop: Knowledge base, purposes and worldview: Every firm has a knowledge base that determines current perceptions or current worldview, which includes ideas and beliefs and assumptions about interacting with the world. Perceptions: We see the world through our perceptions and construct our reality that way. We may be self-assured about some favorite ideas about the obvious way to proceed, but we may be proven wrong via future learning. Purposeful actions and consequences: With its purpose in mind, the firm takes actions, and each action has consequences, which may or may not have been anticipated. Feedback: Learning from actions and their consequences is consumed as feedback, a critical component of the knowledge-building loop. The knowledge base changes as a result of this learning. An existing assumption may be replaced. Humility is important when traversing the knowledge-building loop. New understanding and new perceptions: As a result of feedback and learning we may be able to evaluate our assumptions differently and perceive the world in a new and more accurate way. It's hard to be skeptical about our own strongly held beliefs, and therefore a cultural commitment to experimentation — the kind that's capable of revealing obsolete assumptions — is necessary. Knowledge-building stems from firm culture. Knowledge-building proficiency is a culture which views everyone in the firm as a value creator and a knowledge worker who can continuously improve their own problem-solving skills. This, in turn, motivates all employees since they can take great satisfaction from their jobs. One of the errors of the traditional command-and-control management structure is that it assumes the smartest people are “higher up”, and it takes decision-making away from those closest to the customer and to the most relevant knowledge. The higher-ups set short-term targets for the employees, which is inconsistent with treating individuals as learners and value creators. Knowledge-building occurs, and must be nurtured, at every layer of the firm. The correct view — and the correct measurement — of firm performance is the life cycle. All firms traverse an inevitable life cycle. Bartley J. Madden's books and research picture it this way. [[{"fid":"137423","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"The Competitive Life Cycle View of the Firm","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"6":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"The Competitive Life Cycle View of the Firm","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"The Competitive Life Cycle View of the Firm","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"6"}}]] During a period of high innovation, economic returns are high, and firms can reinvest at a high rate. This inevitably fades as competitors erode the advantage. In maturity the returns approach the cost of capital, and the business model may fade to the point where it fails to make the long-term cost of capital. That's why firms must always be investing in long term new innovation projects for continuous refreshment and to repeat the high return stage. They must demonstrate to investors a skill in making these high return long term investments. The stock price is an appraisal of this skill. [[{"fid":"137422","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 4","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"5":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 4","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Example 4","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"5"}}]] The life cycle components are the long-term cost of capital, the return on capital that results from knowledge-building proficiency, the fade rate and the reinvestment rate. The metrics of firm performance are those related to the life cycle. Additional Resources The Pragmatic Theory of The Firm and The Knowledge-Building Loop (PDF): Mises.org/E4B_199_PDF Books by Bartley J. Madden: Value Creation Principles: The Pragmatic Theory of the Firm Begins with Purpose and Ends with Sustainable Capitalism: Mises.org/E4B_199_Book1Value Creation Thinking: Mises.org/E4B_199_Book2CFROI Valuation: Mises.org/E4B_199_Book3Reconstructing Your Worldview: The Four Core Beliefs You Need to Solve Complex Business Problems: Mises.org/E4B_199_Book4 Paper: "Bet on innovation, not Environmental, Social and Governance metrics, to lead the Net Zero transition" by Bartley J. Madden (PDF): Mises.org/E4B_199_Paper Good Strategy Bad Strategy: The Difference and Why It Matters by Richard Rumelt: Mises.org/E4B_199_Book5 Plain Talk: Lessons From A Business Maverick by Ken Iverson: Mises.org/E4B_199_Book6

Value for customers is the purpose of all entrepreneurial business. Firms big and small must know, follow, and adhere to the principles of value creation. This is pragmatic not theoretical — the consequence of a failure to do so is that the firm cannot survive. Bartley J. Madden studied value creating firms as a co-founder of a successful investment research firm and then managing director of Credit Suisse HOLT. He is now an independent researcher and founder of the Madden Center For Value Creation in the College of Business at Florida Atlantic University. He joins the Economics For Business podcast and shared a summary of a lifetime of research. Knowledge Capsule A systems thinking approach provides the best route to understanding value creation. The business firm is a sub-system within a bigger system, that of society. The effectiveness of the firm is tied to organizational learning and the evolution of dynamic capabilities. Bart Madden's pragmatic theory of the firm treats it as a holistic system with a well-defined purpose. If it is successful in achieving its purpose, it will benefit the larger societal system. The purpose of the firm is a four-fold composition of mutually reinforcing goals. Sometimes, the business literature is guilty of treating purpose as a PR statement, a catchphrase that can be communicated without it necessarily governing the firm's behavior. Bart Madden's view of purpose demonstrates much greater depth, appropriate for complex systems management. Purpose is 4-fold: A vision of the value that can be realized by customers, and that can inspire and motivate employees to work for a firm committed to ethical behavior and making the world a better place through customer value. [[{"fid":"137418","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 1","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"1":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 1","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Example 1","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"1"}}]] Customers consume value by experiencing it in their interactions and relationships with the firm. The customer's experience is dynamic within their own system of competitive offerings and alternative choices.Survive and prosper through continual gains in efficiency and sustained innovation. These are long term performance variables that depend directly on a firm's knowledge-building proficiency. A firm must generate a return that is greater than the cost of capital, and as it matures, this return can be eroded away by competitors who offer lower prices or different features to customers. Building knowledge and translating it into new business capabilities is critical for long-term survival. [[{"fid":"137419","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 2","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"2":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 2","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Example 2","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"2"}}]]Work continuously to sustain win-win relationships in every direction. Relationships with customers are primary for value creation, and relationships with employees and managers must generate the understanding, motivation and commitment to delivering customer value, while relationships with suppliers, collaborating firms and other partners must result in their best support for value creation. It's a way of living and doing business that engenders trust all around. Shareholders are also rewarded as a consequence of these relationships.Take care of future generations. The long-term view of the pragmatic theory of the firm as a system within the bigger system of society emphasizes thoughtful concern for the future, so that return on capital can be sustained. Paying attention to minimizing waste in the earliest product and service design stages can serve the future, and this includes minimizing pollution (a form of waste) and reducing harm to the environment.[[{"fid":"137421","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 3","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"4":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 3","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Example 3","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"4"}}]] A firm that is successful in achieving its four-part purpose benefits customers, employees, partners, suppliers and shareholders, as well as society at large. Nurturing and sustaining a knowledge-building culture is the most critical driver of long-term performance. Knowledge-building is a continuous loop: Knowledge base, purposes and worldview: Every firm has a knowledge base that determines current perceptions or current worldview, which includes ideas and beliefs and assumptions about interacting with the world. Perceptions: We see the world through our perceptions and construct our reality that way. We may be self-assured about some favorite ideas about the obvious way to proceed, but we may be proven wrong via future learning. Purposeful actions and consequences: With its purpose in mind, the firm takes actions, and each action has consequences, which may or may not have been anticipated. Feedback: Learning from actions and their consequences is consumed as feedback, a critical component of the knowledge-building loop. The knowledge base changes as a result of this learning. An existing assumption may be replaced. Humility is important when traversing the knowledge-building loop. New understanding and new perceptions: As a result of feedback and learning we may be able to evaluate our assumptions differently and perceive the world in a new and more accurate way. It's hard to be skeptical about our own strongly held beliefs, and therefore a cultural commitment to experimentation — the kind that's capable of revealing obsolete assumptions — is necessary. Knowledge-building stems from firm culture. Knowledge-building proficiency is a culture which views everyone in the firm as a value creator and a knowledge worker who can continuously improve their own problem-solving skills. This, in turn, motivates all employees since they can take great satisfaction from their jobs. One of the errors of the traditional command-and-control management structure is that it assumes the smartest people are “higher up”, and it takes decision-making away from those closest to the customer and to the most relevant knowledge. The higher-ups set short-term targets for the employees, which is inconsistent with treating individuals as learners and value creators. Knowledge-building occurs, and must be nurtured, at every layer of the firm. The correct view — and the correct measurement — of firm performance is the life cycle. All firms traverse an inevitable life cycle. Bartley J. Madden's books and research picture it this way. [[{"fid":"137423","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"The Competitive Life Cycle View of the Firm","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"6":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"The Competitive Life Cycle View of the Firm","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"The Competitive Life Cycle View of the Firm","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"6"}}]] During a period of high innovation, economic returns are high, and firms can reinvest at a high rate. This inevitably fades as competitors erode the advantage. In maturity the returns approach the cost of capital, and the business model may fade to the point where it fails to make the long-term cost of capital. That's why firms must always be investing in long term new innovation projects for continuous refreshment and to repeat the high return stage. They must demonstrate to investors a skill in making these high return long term investments. The stock price is an appraisal of this skill. [[{"fid":"137422","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 4","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"5":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"Example 4","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"Example 4","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"5"}}]] The life cycle components are the long-term cost of capital, the return on capital that results from knowledge-building proficiency, the fade rate and the reinvestment rate. The metrics of firm performance are those related to the life cycle. Additional Resources The Pragmatic Theory of The Firm and The Knowledge-Building Loop (PDF): Mises.org/E4B_199_PDF Books by Bartley J. Madden: Value Creation Principles: The Pragmatic Theory of the Firm Begins with Purpose and Ends with Sustainable Capitalism: Mises.org/E4B_199_Book1Value Creation Thinking: Mises.org/E4B_199_Book2CFROI Valuation: Mises.org/E4B_199_Book3Reconstructing Your Worldview: The Four Core Beliefs You Need to Solve Complex Business Problems: Mises.org/E4B_199_Book4 Paper: "Bet on innovation, not Environmental, Social and Governance metrics, to lead the Net Zero transition" by Bartley J. Madden (PDF): Mises.org/E4B_199_Paper Good Strategy Bad Strategy: The Difference and Why It Matters by Richard Rumelt: Mises.org/E4B_199_Book5 Plain Talk: Lessons From A Business Maverick by Ken Iverson: Mises.org/E4B_199_Book6

Brands are prized by corporations as significant value-driving economic assets. Brands help customers enjoy more valuable experiences, raising willingness-to-pay levels and thus improving cash flows — higher cash flows as a result of higher prices, faster cash flows because branded products tend to turn faster than their non-branded counterparts, longer lasting cash flows because brands have longevity in customers' perceptions, and less volatile cash flows because brand loyalty can smooth out the effects of economic booms and busts. For these reasons, corporations invest in brands and brand building. Catherine Kaputa makes the case that individuals should invest in themselves as brands, and makes the tools of brand-building available to individuals for personal brand-building: the brand of you. Knowledge Capsule You are a brand, assessed subjectively by your customers. Think of yourself as a brand. Think of your customers - your boss, other leaders and decision-makers in your firm, your colleagues, your clients, your suppliers. They all have a subjective perception of you and the value to which you can contribute in any business situation. Is it the perception you want? Do people see you as the problem solver and solution designer for their problems? Like any brand owner, you can work to actively shape that perception. As Catherine Kaputa puts it: If you don't brand yourself, others will, and they may not brand you the way you want to be branded. The first tool in the branding toolbox is positioning. The branding community has developed the idea of brand positioning. In the perception space in which your brand operates, you seek to identify a unique, highly differentiated position. You want to be perceived as different and better. Positioning is the identification and selection of that unique space in the minds of customers and the basis of the of credibility, reputation and trust to be able to make the claim. Importantly, positioning requires outside-in thinking. Think of your customers first, their needs, their mindset, and their perception of the other brands in the space. Your positioning must be in their minds, not yours. Differentiation is a most important element of positioning. Typically, perception spaces are competitive. Customers looking for solutions to problems and better experiences scan the space for alternatives and make comparisons between them. Know your competitors, assess them through the eyes of your customers, and find a positioning that is both different from and better than alternatives for your customer, using their mental model and assessment criteria. Aim to “own” that unique space - meaning that the customer identifies you as the only one or the best one of their alternatives to meet a particular need. Attach an idea to yourself. A way to pin down a perception in a customer's mind is to attach an idea to a brand, in this case yourself as a brand, in a way that the connection is immediate and becomes automatic. The idea should be singular and highly focused. Catherine Kaputa recommends a process of subtraction to reach a singular idea — you'll start with a multi-layered and possibly complicated idea, but if you keep subtracting the least relevant, least important and least differentiated elements, you'll arrive at the pared-down singularity. You should be able to express it in a phrase or a sentence, one that you can keep repeating to embed it. Her own example in her marketing career was to brand herself as “good with difficult clients”. Every marketing services company has clients or accounts or marketing challenges that are deemed to be difficult and not everyone wants to be exposed to that risk. Someone who steps up and enjoys performing well on such a stage is both differentiated and highly sought after. Personal brand positioning strategy templates provide another tool for self-branding. In her book The New Brand You, Catherine Kaputa provides 10 brand positioning templates as examples of how an individual might approach the process of self-branding and build their own brand. Download "Ten Personal Brand Positioning Strategies" in PDF: Mises.org/E4B_198_PDF These are complete templates for rigorous use and application, appropriate for individual interpretation, embellishment and nuance. One example is the Innovator strategy. Let's use this template as an example of the self-brand positioning process. 1. What's the customer need that the Innovator addresses? Identify your target audience and the problem they want solved. Innovators are needed to create something new, when existing strategies are failing or sales are declining or new market entrants are redefining the terms of competition. New solutions are sought, and Innovators are the ones people turn to. Innovators are recognized as the creative resource that's required. 2. What are the attributes to point to in order to claim the Innovator positioning? Catherine Kaputa lists 5: Visionary with clear objectives: not just creative, but capable of identifying business objectives for creativity and of seizing opportunities. Brilliant at problem-solving: full of ideas, but always directed towards solving important problems. Bold risk-taking: when others hold back, Innovators are eager to design and run experiments from which to learn, knowing there's no such thing as failure, just new knowledge. Fresh thinking: not following the crowd but diverging from the norm. Inventive: Innovators demonstrate the capacity to be first in new designs, new thinking and new ideas. The point is to evaluate yourself against the attributes of the positioning type: is this you? 3. The next step is a positioning statement. Catherine provides examples: Sample Positioning Statement: An innovative professional in an industry beset by mergers and dynamic change positioned herself in the following way. Draft Sentence: For senior managers, boss, clients, industry who need new products and services I stand for innovative problem solver in industries undergoing massive change. The format to use is: For (target audience) who needs (problem you solve) I stand for (value proposition). 4. Add reasons to believe. Pick three reasons and 3 keywords or phrases as to why customers should invest in your positioning statement by hiring you or giving you the project. Innovator is just one of multiple possible strategies. Yours may be one of these or a combination of several. There's a personal test you can take at Mises.org/E4B_198_Test for initial input to start your positioning process. Positioning is a means not an end: there is more work to do. Catherine Kaputa follows the logic of brand positioning all the way to implementation. It's not a theory, it's a practice. There are actions that brand marketers take to communicate and embed their positioning. She cites three major ones: visual identity, verbal identity and brand marketing. Commercial brands spend a lot of time, effort and resources on a brand's look: logo design, package design, website colors and typefaces, video style, and so on. The goal is to communicate a style and an engaging and brand-appropriate visual personality. The same principles apply to personal branding - choose your look, your dress-style and fashion carefully and thoughtfully. Verbal identity comes from the words you use, the story you tell, and how you communicate in presentations, e-mails, tweets, speeches and conversations, whether in the conference room, the auditorium or on zoom. Work on it. Marketing your brand should be guided by your goals for your personal brand. Once you have them defined, choose your media, your message, your content, your campaign tactics and your metrics. Additional Resources The New Brand You: How to Wow in the New World of Work by Catherine Kaputa: Mises.org/E4B_198_Book Find your own brand positioning (Mises.org/E4B_198_Test) on SelfBrand.com "Ten Personal Brand Positioning Strategies" (PDF): Mises.org/E4B_198_PDF

Brands are prized by corporations as significant value-driving economic assets. Brands help customers enjoy more valuable experiences, raising willingness-to-pay levels and thus improving cash flows — higher cash flows as a result of higher prices, faster cash flows because branded products tend to turn faster than their non-branded counterparts, longer lasting cash flows because brands have longevity in customers' perceptions, and less volatile cash flows because brand loyalty can smooth out the effects of economic booms and busts. For these reasons, corporations invest in brands and brand building. Catherine Kaputa makes the case that individuals should invest in themselves as brands, and makes the tools of brand-building available to individuals for personal brand-building: the brand of you. Knowledge Capsule You are a brand, assessed subjectively by your customers. Think of yourself as a brand. Think of your customers - your boss, other leaders and decision-makers in your firm, your colleagues, your clients, your suppliers. They all have a subjective perception of you and the value to which you can contribute in any business situation. Is it the perception you want? Do people see you as the problem solver and solution designer for their problems? Like any brand owner, you can work to actively shape that perception. As Catherine Kaputa puts it: If you don't brand yourself, others will, and they may not brand you the way you want to be branded. The first tool in the branding toolbox is positioning. The branding community has developed the idea of brand positioning. In the perception space in which your brand operates, you seek to identify a unique, highly differentiated position. You want to be perceived as different and better. Positioning is the identification and selection of that unique space in the minds of customers and the basis of the of credibility, reputation and trust to be able to make the claim. Importantly, positioning requires outside-in thinking. Think of your customers first, their needs, their mindset, and their perception of the other brands in the space. Your positioning must be in their minds, not yours. Differentiation is a most important element of positioning. Typically, perception spaces are competitive. Customers looking for solutions to problems and better experiences scan the space for alternatives and make comparisons between them. Know your competitors, assess them through the eyes of your customers, and find a positioning that is both different from and better than alternatives for your customer, using their mental model and assessment criteria. Aim to “own” that unique space - meaning that the customer identifies you as the only one or the best one of their alternatives to meet a particular need. Attach an idea to yourself. A way to pin down a perception in a customer's mind is to attach an idea to a brand, in this case yourself as a brand, in a way that the connection is immediate and becomes automatic. The idea should be singular and highly focused. Catherine Kaputa recommends a process of subtraction to reach a singular idea — you'll start with a multi-layered and possibly complicated idea, but if you keep subtracting the least relevant, least important and least differentiated elements, you'll arrive at the pared-down singularity. You should be able to express it in a phrase or a sentence, one that you can keep repeating to embed it. Her own example in her marketing career was to brand herself as “good with difficult clients”. Every marketing services company has clients or accounts or marketing challenges that are deemed to be difficult and not everyone wants to be exposed to that risk. Someone who steps up and enjoys performing well on such a stage is both differentiated and highly sought after. Personal brand positioning strategy templates provide another tool for self-branding. In her book The New Brand You, Catherine Kaputa provides 10 brand positioning templates as examples of how an individual might approach the process of self-branding and build their own brand. Download "Ten Personal Brand Positioning Strategies" in PDF: Mises.org/E4B_198_PDF These are complete templates for rigorous use and application, appropriate for individual interpretation, embellishment and nuance. One example is the Innovator strategy. Let's use this template as an example of the self-brand positioning process. 1. What's the customer need that the Innovator addresses? Identify your target audience and the problem they want solved. Innovators are needed to create something new, when existing strategies are failing or sales are declining or new market entrants are redefining the terms of competition. New solutions are sought, and Innovators are the ones people turn to. Innovators are recognized as the creative resource that's required. 2. What are the attributes to point to in order to claim the Innovator positioning? Catherine Kaputa lists 5: Visionary with clear objectives: not just creative, but capable of identifying business objectives for creativity and of seizing opportunities. Brilliant at problem-solving: full of ideas, but always directed towards solving important problems. Bold risk-taking: when others hold back, Innovators are eager to design and run experiments from which to learn, knowing there's no such thing as failure, just new knowledge. Fresh thinking: not following the crowd but diverging from the norm. Inventive: Innovators demonstrate the capacity to be first in new designs, new thinking and new ideas. The point is to evaluate yourself against the attributes of the positioning type: is this you? 3. The next step is a positioning statement. Catherine provides examples: Sample Positioning Statement: An innovative professional in an industry beset by mergers and dynamic change positioned herself in the following way. Draft Sentence: For senior managers, boss, clients, industry who need new products and services I stand for innovative problem solver in industries undergoing massive change. The format to use is: For (target audience) who needs (problem you solve) I stand for (value proposition). 4. Add reasons to believe. Pick three reasons and 3 keywords or phrases as to why customers should invest in your positioning statement by hiring you or giving you the project. Innovator is just one of multiple possible strategies. Yours may be one of these or a combination of several. There's a personal test you can take at Mises.org/E4B_198_Test for initial input to start your positioning process. Positioning is a means not an end: there is more work to do. Catherine Kaputa follows the logic of brand positioning all the way to implementation. It's not a theory, it's a practice. There are actions that brand marketers take to communicate and embed their positioning. She cites three major ones: visual identity, verbal identity and brand marketing. Commercial brands spend a lot of time, effort and resources on a brand's look: logo design, package design, website colors and typefaces, video style, and so on. The goal is to communicate a style and an engaging and brand-appropriate visual personality. The same principles apply to personal branding - choose your look, your dress-style and fashion carefully and thoughtfully. Verbal identity comes from the words you use, the story you tell, and how you communicate in presentations, e-mails, tweets, speeches and conversations, whether in the conference room, the auditorium or on zoom. Work on it. Marketing your brand should be guided by your goals for your personal brand. Once you have them defined, choose your media, your message, your content, your campaign tactics and your metrics. Additional Resources The New Brand You: How to Wow in the New World of Work by Catherine Kaputa: Mises.org/E4B_198_Book Find your own brand positioning (Mises.org/E4B_198_Test) on SelfBrand.com "Ten Personal Brand Positioning Strategies" (PDF): Mises.org/E4B_198_PDF

Business success goes beyond numbers and planning and finance acumen. There's an emotional component to it, ranging from the courage to make decisions without knowing the outcomes in an uncertain future, to the resilience of weathering storms and coping with unanticipated crises. There is also, of course, the joy of achievement and goal-attainment. There's a concept identified as emotional intelligence that individuals and teams can cultivate as an element of a mental model that's well-aligned with business performance and positive business outcomes. Knowledge Capsule The entrepreneurial method is to pursue change, but people's natural attitude is to resist change. We have an inbuilt, biological resistance to change. It triggers fear and anxiety that get in the way of moving towards the change that we seek. In addition to this emotional resistance, we develop habits that keep us in the status quo, and present another barrier to behavioral change. We all must fight an internal battle between our old habits and desired new habits. Entrepreneurs develop a special emotional intelligence that motivates action. Entrepreneurs are in the business of making change. They can overcome the natural emotional and behavioral barriers because they have a highly developed emotional intelligence. They have such an emotional relationship with their vision of a successful outcome for their efforts that they can overcome fearful restraints and resistance to change. They are especially highly motivated to take action. It's their emotion that drives action, not intellect. Emotional intelligence is much more influential in business success than IQ. A 40-year study at UC Berkeley found that EQ (emotional intelligence) is 400% more powerful than IQ in predicting which individuals would have success in their field. Private companies like PepsiCo and Apple have uncovered similar findings in their internal studies. High emotional intelligence not only releases personal energy and creativity, but it also results in higher levels of interpersonal trust and shared engagement with others. With high emotional intelligence, we are driven to help others to enjoy better experiences as well as to advance out of our own comfort zones to access new areas of achievement. The consequence of achieving high levels of emotional intelligence is higher levels of trust and engagement in business, and, thereby, better business results. Everyone can improve their emotional intelligence and benefit from its compounding effect. We are pretty much born with our IQ — we can't increase it. But everyone can raise their level of emotional intelligence. Not only that, but emotional intelligence is a compounding asset — we can raise it and raise it again and keep on raising, so long as we work at it. Part of the equation is personal energy management. Phil Johnson identifies personal energy as the core element at the heart of the power of emotional intelligence. We “give our energy away” when we permit others to disrupt our emotional flow — make us annoyed or angry or resentful or frustrated. As a consequence, we feel the need to “steal energy from others” by getting the better of them or by exercising a command-and-control management style. The net result is strife, dissension, and misalignment — where team or corporate energy is wasted. We can avoid this waste by cultivating emotional intelligence. There are high-ROI habits, practices and skills that help to build emotional intelligence. Happily, we can practice some of the habits and skills that develop and demonstrate emotional intelligence. One such habit is authentic listening: when we take criticism personally, we give away energy. So, if we eliminate all personal inner-directed emotion from our reception of comments and suggestions from others, we can utilize all the experience and knowledge that's shared with us for betterment and improvement. Don't resist, don't judge. Don't let attachment to our own preferences get in the way of receiving input. Don't raise walls. We have no personal interest in what others think of us, only in the information they can impart, which might be useful The other side of the coin is authentic communication: be sure that all the content of our communication is factual and positively motivating and designed to be helpful to others, strengthening trust and engagement. If we develop a consistent reputation for authentic communication, we'll raise engagement (and Gallup reports that employee engagement is at a very low level today, which is a great cost to economic productivity). In addition to habits and practices, Phil Johnson urges us to commit to the emotional labor of recognizing our own fears, biases, and status quo preferences, and to establish an emotional distance between our motivations to action and our ego-based fear. It's emotional labor that pays interest — it has a high ROI. Emotional intelligence releases the power of intuition, and creates a state of flow. When we fear making decisions, we try to rationalize those decisions, to seek objectivity and lower uncertainty. When we distance ourselves from fear, we can unleash intuition — that decision-making capability that is beyond our understanding and comes from our unconscious brain. Intuition takes over more and more as we master emotional intelligence. We make choices that are not intellectual — we go beyond our intellectual ability. Emotional intelligence takes us to a flow state. We get away from thinking and move towards intuitive doing, beyond our comfort zone beyond our fear and anxiety. Additional Resources Phil Johnson on LinkedIn: Mises.org/E4B_197_LinkedIn Phil Johnson's Zoom Calendar: Mises.org/E4B_197_Zoom Videos from alumni of Phil Johnson's MBL (Master Of Business Leadership) Program: Mises.org/E4B_197_MBL UC Berkeley Study, EQ>IQ: Mises.org/E4B_197_Paper

A great benefit of the internet age is the capacity to accumulate, accelerate, and intensify connections between entrepreneurs, knowledge sources, investors, mentors, collaborators, and service providers. Businesses with a valid value proposition who are in the launch and early expansion phases can interconnect a network of powerful and qualified resources to support their growth. A good way to do so is to utilize a platform (another product of the internet age) designed for the purpose. Tom Malengo established a platform called Brandjectory to serve just this purpose for consumer packaged goods (CPG) startups. Key Takeaways and Actionable Insights. Brandjectory's value proposition is to solve the problem of how to build an investor-ready business. The purpose of a B2B business is to help customers achieve their own purpose. Brandjectory helps with the purpose of becoming investor-ready, the condition of qualifying for funding in the eyes of investors. The problem is multi-faceted, from having an investable value proposition, to having the systems and structure in place to qualify for investment, to overcoming the functional obstacles of expansion, to having access to investors, to having the capability to pitch effectively and persuasively. Brandjectory helps with all phases, for all stages of investable business from pre-market seed stage to post-market Series A where a proven business model and revenue stream represents the bar. All knowledge is specialized: select and know your sector. Brandjectory focuses on consumer packaged goods businesses, often identified by the acronym CPG. It's a sector with open-ended innovation opportunities — e.g., how to make foods and beverages and cleaning products and pet products healthier — along with an identifiable set of obstacles to overcome, such as the cost and difficulty of securing and maintaining distribution in supermarkets and other retail channels. An investable business knows the available innovation gaps and has a practical knowledge of barriers and how to overcome them. Define value in your sector with reachable target customers. The Brandjectory system stresses the understanding of subjective value — that it's an experience of the customer, and is defined by what they feel is important to them and how they feel a new brand will satisfy their need in that area of their life. Value demands an emotional connection, sustained over time. Too many founders, says Tom Malengo, CEO of Brandjectory, do not exhibit a full understanding of value. They are more focused on what's new or different about their product, or on their recipe or ingredients. This is a functional perspective, and misses the emotional component. Tom's technique in assessing a founder's understanding of subjective value is a careful but intense questioning, driving towards a true focus on what's important to consumers. Value understanding must be translated into a value proposition. A value proposition is a structured template for the communication of proposed value to the consumer, enabling them to recognize it. The value proposition must capture the emotional element of value — how consumers will feel better. It's not just about good taste, for example, but the joy of consumption, the family sharing, the feeling of contributing to health rather than undermining health. On econ4business.com, you can read about value propositions (Mises.org/E4B_195_Value), and watch the E4B value proposition design video (Mises.org/E4B_195_Video). Potential investors will probe for the founder's true understanding of value propositions — it's a qualitative rather than quantitative assessment. A founder must be skilled and effective at communicating this understanding. Investor-readiness also implies an identification of all the challenges to growth and how to overcome them. Investor-readiness will vary by business stage. The state of readiness might encompass the capacity of the sales network, or of production processes, or the scalability, sustainability and security of the supply chain, or the strength of processes and systems, or the innovation pipeline, or the quality of the advisor group. Tom's guidance to founders ensure that they know all the questions investors will ask, and leave nothing to chance in framing their answers. The required knowledge-building is achieved through networking and connecting. A major benefit of the Brandjectory platform is its network of advisors, industry experts, mentors, and investors. Founders can connect to them and meet them, and not just listen but also gather knowledge through questioning and discussion. Plugging in to a powerful knowledge network is less stressful than pitching and more conducive to learning. The members of the network have a wide range of incentives. Investors can pick up information about trends and new ideas even if they don't invest directly. Industry experts can sense the response to their information and knowledge sharing and get market feedback. Many mentors enjoy the sense of giving back to their industry and community after years of working. All entrepreneurs can, and should, assemble a network like this. Brandjectory is a convenient way to do it for CPG entrepreneurs. It's important to understand the role of knowledge in firm performance. Tom Malengo says knowledge is power for entrepreneurs — the power to solve problems, address challenges and overcome obstacles. It can be a competitive advantage to gather more specialized knowledge than competitors and incumbents. Professor Per Bylund sees specialized knowledge as solving the production problem (see Mises.org/E4B_195_Book) — the difficulty of initiating new economic production that no-one else has ever attempted, i.e., innovation. Brandjectory takes the problem-solution approach to knowledge building. Entrepreneurs who confront a problem or issue or knowledge gap can ask the appropriate question of the appropriate expert or tap the experience of a more seasoned businessperson and benefit from the exchange, a kind of accelerated learning. Brandjectory is a celebration of the all-American practice of entrepreneurship. Tom Malengo views entrepreneurship as the fabric of civilized society, a tradition that is especially strong in America. Our first settlers and many of our founders were entrepreneurs, and the encouragement of new ideas from any and all sources, giving everyone the chance to pursue their commercial development and experience economic success is woven into our way of life. An entrepreneur, as Tom sees it, is someone who refuse to tolerate the existing status quo and demands better and is willing to exert their own effort and expend their own resources to bring it about — a very Misesian view. Through Brandjectory, he intends to help and support all those in pursuit of betterment in CPG. His platform concept — where the business model is to invite entrepreneurs to join for a fee, with unlimited free access to the knowledge platform and expert network, no commissions, middleman dealmaker cuts, brokerage charges, retail markups, affiliate costs or any other “bite” — is pure support for aspirational growth companies. Additional Resources Brandjectory website: brandjectorynow.com Tom Malengo on LinkedIn: Mises.org/E4B_195_LinkedIn

Breakthrough theory becomes effective practice when it is successful applied by real-life entrepreneurs. The E4B entrepreneurial method is actualized by Hermann and Elizabeth Morris in the very distinctive business model for their brand, The Nail Hub. Knowledge Capsule The true purpose of a B2B business is to help your customers succeed. While outside observers focus on transactions — how much does this business sell, what are its revenues? — entrepreneurial business owners and operators focus on customers and customer relationships. Revenues follow from relationships. This insight is critical, since it guides business model development. Business-to-business models are especially responsive to relationship strategies. When a customer feels that the relationship with a supplier makes their business performance better, they can become a customer for life. That's a recipe for strong and sustainable growth. First, observe the ecosystem in which you operate, and identify gap opportunities. Systems thinking is an important component of the entrepreneurial method. A firm is a component or a node in a network of interconnected services we can call an ecosystem. Hermann's and Elizabeth's ecosystem is the Nail Fashion industry. Nodes include salons and salon owners, the nail technicians (sometimes employees, sometimes independent contractors) who provide service to consumers in the salons, equipment manufacturers and suppliers, product manufacturers and suppliers (for nail gel, etc.), and product distributors. [[{"fid":"136708","view_mode":"image_no_caption","fields":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"E4B Graphic: Evolving The Nail Hub Business Model","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""},"type":"media","field_deltas":{"1":{"format":"image_no_caption","alignment":"center","field_file_image_alt_text[und][0][value]":"E4B Graphic: Evolving The Nail Hub Business Model","field_file_image_title_text[und][0][value]":false,"field_caption_text[und][0][value]":"","field_image_file_link[und][0][value]":""}},"attributes":{"alt":"E4B Graphic: Evolving The Nail Hub Business Model","class":"media-element file-image-no-caption media-wysiwyg-align-center","data-delta":"1"}}]] Hermann and Elizabeth were able to identify a number of gaps in the ecosystem. Many salon owners were enthusiastic about their industry but not well-trained or experienced in the basic economics of business. Many of the technicians were passionate about their trade, but not highly trained in the latest techniques and technologies and in product selection. There were aspects of marketing that were underdeveloped, such as audience segmentation. And there were inconsistencies between products in both quality and safety. In the mind of the entrepreneur, these gaps are opportunities. The entrepreneurial question is: how best to fit in and contribute to the ecosystem. The business model response is determined by individual entrepreneurial orientation. The beginning orientation was that of an operator. Given their knowledge of both the high potential of the industry and the gaps to be addressed / problems to solve, the Morrises' entry point was as an operator. They embarked upon the journey to design a differentiated salon experience with superior nail technique, better products, better trained technicians. They ran the salon with better business acumen (they both came from high-level corporate positions and were able to bring sophisticated operating and financial experience). They segmented with an unusual and especially comfortable in-salon appeal, and via location. They were successful. There was a lot of learning, which Hermann identifies as overcoming pain points. The next growth step comes from re-orientation to larger scale. How could the Morrises scale their salon business? They thought through multiple openings (e.g., open and operate 20 salons), acquisition (acquire 20 salons), and franchising (sell franchises to multiple independent owners). All of these alternatives would require new capability development: establishing standards and a repeatable business model, including a reliable financial model, designing a multi-unit system of supply chains, capital deployment, décor, training and location scouting, and a new kind of marketing to salon managers or franchisees. The Morrises were reorienting to thinking as proprietors of a new kind of multi-division business. It's a different orientation, seeing the same ecosystem from a different perspective. Meanwhile, Elizabeth had the idea for a podcast to share her expertise and knowledge and passion for the industry. It was free business advice, free guidance, free technical training, teaching different aspects of running a salon and technical aspects for nail technicians. Its purpose was a service to consumers (better salon experiences), to technicians (better craftsmanship) and owners (better business operations). The podcast was called The Nail Hub. It generated a great positive reputation in the ecosystem and a lot of positive feedback. The knowledge that The Nail Hub podcast shared was enthusiastically welcomed. The Nail Hub podcast feedback resulted in a further re-orientation. The Nail Hub podcast was helping salon owners and those technicians who were independent contractors renting positions in salons to improve the way they ran their businesses: better management, better understanding of customer needs and segmentation, better approaches to pricing, revenue and profits, better techniques, and better products. What if a podcast can become a business model? Hermann and Elizabeth developed an entirely new B2B services business model which could be summarized as “educate the industry on how to operate a business, and supply them with the highest quality products to fit their business”. Importantly, the education is free to consume. The Nail Hub YouTube channel is free to access, and offers over 140 videos on every aspect of business operations, finances, equipment, products, and techniques. The videos are expensive to produce. The model is that the investment in education will be repaid through loyal customers buying the products that The Nail Hub offers for purchase. The curation of products itself is a service. The Nail Hub has identified a distinctive set of criteria for product selection (health, safety, non-toxic ingredients, cruelty-free) and does the research and validation so that purchasers can be confident in their choices and tin he integrity of their promises to the end-consumer. The products are not the lowest price, they are the highest quality. Salon owners who have not fully absorbed The Nail Hub's education on consumer segmentation, pricing, and customer experience will not be a good fit within The Nail Hub's customer set. The Nail Hub business model has a high internal consistency and integrity. The Nail Hub has re-oriented to B2B service provider educating an entire industry to provide superior consumer experiences, better product quality and profitable operations — i.e., re-orienting from facing those challenges to helping others to face and overcome them. One of the cornerstones of the B2B services model is authentic subject matter expertise. The Nail Hub can help salon owners and nail technicians thrive through their independent action because Hermann and Elizabeth developed a deep subject matter expertise. They've been salon owners and faced all the developmental issues that owners face. They've trained nail technicians. They've evaluated salon equipment and they've committed their resources and time to researching high quality, innovative products that meet their highest standards. Hermann stresses that the arduous development of subject matter expertise is the necessary foundation for a trusted service business. Another is to choose customers carefully. The Nail Hub is making a substantial investment in their customers via their free training and education. The business model that they enable is specific: the highest standards, with the best trained operators, providing a reliably superior consumer experience. The pricing model is premium, which supports the use of the highest quality products and the provision of the highest quality salon environment. Race-to-the-bottom operators who pursue the lowest prices as a competitive edge are not a good fit in The Nail Hub ecosystem, and Hermann makes this a clear element of The Nail Hub's B2B communications. Choose your customers to match your positioning. The evaluation of the business model does not lie in conventional metrics. When the business model is to invest in the success of customers, the conventional metrics of revenue, margins and annual profits are not the primary measures of success (although, of course, they must be acknowledged). The evaluation of the model comes via the feedback loops. Is the educational service welcomed? Does it result in better operations on the part of salon owners? Do salon owners and independent technicians become customers for life? Do product manufacturers clamor for entry into The Nail Hub's curated product set? Are product trends — safe, non-toxic, healthy, etc. — moving in the desired direction? This is the entrepreneurial ethic: make customers more successful, make the world a better place. Additional Resources "Evolving The Nail Hub Business Model" E4B Graphic (PDF): Mises.org/E4B_194_PDF The Nail Hub YouTube Channel: YouTube.com/TheNailHub The Nail Hub Website: TheNailHub.com

There is a threshold of diversity below which no organization can operate with complete effectiveness. Diversity in this sense does not only include the “Big 3” DEI elements of race gender and sexual orientation, but also education, experiential background, business partner diversity, learning capabilities — all of the organizational resources that Austrian economists refer to when they talk about the creative combination and recombination of heterogeneous assets. Dr. Ella F. Washington, author of the book The Necessary Journey, joins Economics For Business to make the business case for diversity. Knowledge Capsule The business case for diversity is built on the sustainable competitive advantage in productivity that it can bring. Dr. Washington's book is a global, multi-variable survey of the effect of diversity orchestration on business results. She describes a wide variety of business cases, in large, medium-sized and small firms, in businesses ranging from global hospitality services to IT to alcoholic beverages production and marketing, and many more. She looks at diversity not just through the “big 3” lenses of race, gender, and sexual orientation, but also educational achievement, cultural background, learning capability and interpersonal communications variables. In all cases, well-orchestrated diversity made a demonstrable and positive difference in business outcomes. Diversity is a tool for competitive advantage. The business case is globally applicable. Dr. Washington has studied and provided consulting services to global firms and to local and regional firms in many countries. She sees diversity not as a provincial political issue but as a business tool for elevating human performance. There is a lot of hard work involved in identifying and understanding local differences, and some challenging decision-making and communications issues. Getting diversity right is not always comfortable, and many perspectives must be balanced. But it pays off in results. Value and empathy are at the core of diversity management. Subjective value lies at the core of Austrian entrepreneurship. Subjective value is in the mind of the customer, it's a feeling that's experienced. When businesses deliver a valuable experience, customers engage enthusiastically. The same is true for a group of employees. An organization that can empathically feel the experiences of all its employees, and can orchestrate the environment and the culture that recognizes, caters to and enhances their felt experiences, can achieve the exciting collaborative energy of alignment and harmony. Austrian principles of subjectivism and empathy apply in all areas of business thinking. People want to feel valued, and the feeling is personal and individual. No matter the size of the corporation, each individual counts in their own way. Diversity policies always benefit from the free incorporation of multiple perspectives as compared to centralized mandates. Dr. Washington's case studies consistently demonstrate that decentralization and localized management is a better tool for productive diversity that central mandates. One of her case studies concerns Sodexo, a French company specializing in food services and facilities management, employing over 420,000 people in 80 countries all over the globe. Through the processes described by Dr. Washington, Sodexo came to realize that thinking and acting locally was the key to achieving the diversity target of collaborative productivity AND elevated human performance through valued experiences. Diversity solutions could not be formulated in the central HQ, or even country-level HQ's, and even regional and local offices. It was the individual sites where people work together in small teams that should be the focus. A general goal was established — it was termed “Spirit Of Inclusion” — and then specific programs were resourced and implemented at the local level in ways that comported with local needs. To quote from one of the Sodexo executives, “engagement across the organization very soon became an enabler of business growth and business success”. Diversity has a future orientation — influencing future performance. In the US, diversity policies are often pitched as addressing past wrongs. In another case study, the President of Infosys, an India-based technology company, stressed his focus on building the services of the future. A diverse work force is, in his words, the most viable business model. Since the company would be engaged in building new services for a new future and a more diverse audience (i.e., in new countries, new situations, new circumstances), then it's smart to try to imagine the needs of that future workforce, and how to maximize its capability for future success. A diverse workforce is better able to develop superior understanding of a diverse customer base. One of Infosys's diversity tactics was to extend hiring in the US to community colleges. Many tech firms focus on 4-year university graduates exclusively. Infosys felt that (a) they might not be competitive in hiring those candidates, and (b) such a focus excluded a lot of bright, trainable people from two-year community college programs. They also found out that the two-year students often exhibited greater “learnability” — they could be trained and coached in the Infosys way with outstanding results in achievement and productivity. Another source of diverse talent is the individual making a mid-career switch. Infosys opened up its thinking and its recruitment to include this type of diversity too. Career-switchers tend to excel at learnability. As is always the case in entrepreneurial economics, imagining a better future opens the pathway to better implementation. At the close of her case studies, Dr. Washington tells us her respondents' answer to a question about the workplace utopia of the future. All the answers are different, but the principle is the same: conceptualizing the most productive workplace in terms of how employees feel and how the feeling can be translated into effective and consistent contribution, collaboration, and business results. How do firms awaken and stimulate the best capabilities of all their employees? That's the business case for diversity. Additional Resources The Necessary Journey: Making Real Progress on Equity and Inclusion by Ella F. Washington: Mises.org/E4B_193_Book TheNecessaryJourney.com Dr. Ella F. Washington on LinkedIn: Mises.org/E4B_193_LinkedIn

When firms apply the principles of Austrian economics to business management, we call the result the Adaptive Entrepreneurial Method. It's adaptive in that it is a continuous learning process, and it's entrepreneurial in elevating customer value realization as the most important business purpose. Key Takeaways and Actionable Insights. 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Value in Austrian economics is customer value: contributing to customers' feelings of being better off as a result of the interaction with an entrepreneurial business or service provider. A useful way to think about value is in terms of alignment and order. A value exchange is a harmonious alignment between customer and entrepreneur, in which both parties benefit and both parties' interests are served. Order is represented by the customer's decision, a point of clarity in a world of multiple choices, overlapping preferences and broad-based uncertainty. Entrepreneurial businesses make value their purpose and identify it in alignment and harmony with customers. Everything else — cash flow, profits, growth — follows. Entrepreneurial orientation enables the right interpretation of data and information for customer value realization. Mark McGrath emphasizes the powerful role of entrepreneurial orientation in business success. Orientation is a mindset — a kind of internal operating system — that guides firms to translate information from customers, partners, competitors and the market into an effective, winning vision and mission. The essence of orientation is learning. Uncertainty is assumed, and orientation is the unique set of filters through which entrepreneurs and management teams process the quantitative and qualitative data that customers and markets present. Mises called it economic calculation: the entrepreneurial capacity for combining a constantly changing stream of information into a business decision. The decisions are always reviewable and revisable; a learning mindset makes entrepreneurs comfortable with frequent decision changes in response to changing information and feedback. Principles — such as the primacy of customer value — remain the same; it's actions that are adjusted. Businesses that don't learn can get locked into models that no longer reflect the realities of the marketplace, and lose their effectiveness. People, ideas, and things. Learning, adapting, and changing are difficult capabilities to master. Continuous change can feel disorienting absent the right mindset. How do companies achieve this mastery? Mark McGrath quotes Joh Boyd on the eternal verity of people, ideas, and things — always in that order. The first critical component are the people engaged in and operating the business. They must be good at change, comfortable with constant flux. They must accept VUCA — volatility, uncertainty, complexity, and ambiguity — as the normal condition. At the same time, management must be conscious of how each new change or wave of change impacts people, and anticipates the effect it will have on them. In this change-accepting environment, unlimited new ideas can emerge via the creative process. They can be tested, and marketplace results become the yardstick. When new ideas look promising in terms of the results they potentially enable, then things can be changed: capital can be redeployed in new combinations, marketing campaigns can be revised. When people are pre-prepared, smooth transitions are achievable. Continuous Reorientation And Entrepreneurial Intent. While entrepreneurial orientation is the firm's operating system for processing information, it is not fixed. Adaptive firms are continuously reorienting, Active reorientation supports learning, recognizing that all perceptual models are only as good as the moment they were developed. They must be renewed to stay relevant. Challenging assumptions and reframing problems must be continuous in order for firms to thrive and use change to advantage. Effective orientation looks to the future rather than the present, emphasizing agility and avoiding clinging to outdated models. Reorientation precedes intent and reshapes it. Entrepreneurial intent can be equated to what systems thinkers call vision. A vision is shared and provides a North Star for everyone in the firm, but that doesn't preclude adjustment in continuous alignment with customers. The vision is to serve customers, and customers are also changing and adjusting. Thinking in terms of intent (rather than, say, implementing a rigid plan) permits greater flexibility in pursuit of the vision. Entrepreneurial judgment is decision and action. The theory of entrepreneurship emphasizes judgment — that mysterious-sounding capability of entrepreneurs to make economic calculations from a mix of data and intuition. That can sound like a kind of mulling over of options. But it's much more active than that. The entrepreneurial method emphasizes deciding and acting. Decisions are recognized as hypotheses; it's impossible to know exactly what to do, so action-oriented develop hypotheses about what actions could have the effect they desire. The hypotheses are carefully aligned with their intent in order to double-check the logic as far as possible. But the purpose is not to be “right” but to generate feedback information so that alignment can be better informed by reality. Action — the implementation of decisions — is an experiment, a test of the hypothesis. Action produces interaction (with customers, with retailers, with competitors, with the changing market environment) and thereby provides new information in the form of feedback, which might indicate the need to change actions next time. The number of hypotheses and tests can be narrowed; what's important is that they reflect as wide a range of perspectives as possible — from those at the front line interacting with customers, whether in person or at the call center or online, from engineers and operatives, from finance and HR, and from all relevant points of view. The more diverse the range of perspectives, the more likely it is that different angles of view will provide new insights and illuminate blind spots. Make sure that internal communications are organized so as to make it possible for all perspectives — including dissenting Cassandras - to be recognized and acknowledged. Candid self-assessment of people in business leadership roles is a good place to start the adaptive entrepreneurial journey. Some elements of the adaptive entrepreneurial model require the discarding of standard ways of managing. For example, many businesses spend considerable time and effort developing plans that lock in budgets and resource allocations, and don't make allowance for constant adjustment and change. It's useful to take inventory of these practices and question whether they can be abandoned or reformed in pursuit of agility. Additional Resources The "Adaptive Entrepreneurial Method" Graphic (PDF): Mises.org/E4B_192_PDF1 "Destruction and Creation" by John Boyd (PDF): Mises.org/E4B_192_PDF2 Mark J. McGrath on LinkedIn: Mises.org/E4B_192_LinkedIn "Orientation: Bridging The Gap In The Austrian Theory of Entrepreneurship" (AERC 2022) by Mark J. McGrath and Hunter Hastings (PDF): Mises.org/E4B_192_PDF3