Persia. Rome. Britain. History is a record of cycles of growth and decline. Is America any exception? If indeed we’re starting to see the first perturbations of the American Fall, then we’d better be prepared. But preparation needn’t be all canned food and stocked basements. It could simply be a collective readiness to undertake an enormous restructuring.
I’ve been calling the death of politics for nearly a decade now. I don’t need to repeat that sorry appraisal here. It’s becoming more evident to everyone. Content about how people have lost faith in the institutions has become a cottage industry. But has anyone considered the possibility that the institutions have outlived their usefulness? Technocracy always fails in time. Yet the powerful cling to power. So, anyone who claims politics is dead needs to answer the question: Now what?
The answer is entrepreneurship. And that, of course, includes innovation. Our mantra is “Criticize by creating,” which I shamelessly stole from educational entrepreneur Michael Strong, who stole it from Michaelangelo. You should steal it, too. It might well be the mantra of this renaissance.
The idea is this: if you’re engaged in politics, policy, and punditry, you’re probably not moving the needle. At best, you’re running as fast as you can to stay in the same place. At worst, you’re proving why people have lost faith in the institutions. To make enduring change, you have to do something hard. You have to create something that constituencies adopt so readily it puts another crack in the institutions. Indeed, instead of trying to preserve the institutions, let them sink into the dark waters of time.
Elsewhere, I have referred to this more active process as “subversive innovation.” But instead of referring to it in passing, I want to take the opportunity to describe it as a set of basic practices. Some will be familiar, perhaps, but I hope some will be new.
- Embrace Michael Strong’s Law and Corollary.
- Strong’s Law. Ceteris paribus, properly structured free enterprise always results, over time, in higher quality, lower cost, and more customized products and services.
- Strong’s Corollary. This theorem applies just as forcefully to the entrepreneurial supply of law, governance, community, housing, education, health care, happiness, and well-being as it does to technology. Our world suffers because we have not allowed entrepreneurial initiative to fully address humanity’s most important issues.
Got that? If not, feel free to read it again.
- Develop a sharp customer focus from which you reverse engineer everything else. First, you have to find your customer and become intimate with her need/desire. Then, what problem are you solving – for your customer? What value are you creating – for your customer? If your answer trails off or involves too many interconnected abstractions, systems, or customer types, you’re probably building a sky castle. You must stay laser-focused on the customer’s needs and desires at all times. There is nothing more important.
- Let the purpose be your boss, but let profit be your prophet. Even nonprofit organizations have to earn revenues over costs to survive. So, first, you have to establish your organization’s purpose. That purpose should be a solemn and severe master you slavishly serve. Profit, then, is a measurement of your success using resources wisely in serving that purpose. (Note: if your organization’s purpose is at odds with customer focus, you must realign.) To the extent your organization is unprofitable, it’s an indicator something is wrong; that is, you are wasting resources or your organization is undercapitalized. The hard part of being an entrepreneur is to know the difference. Still, profit isn’t evil. It is an indication that you can sustainably create customer value.
- What is the least you can do? That is, what is a prototype or minimum viable product that you can take to market quickly for a low-cost test? If the primary objective is satisfying your customers’ wants and needs, then not far behind should be to fail early and cheaply so you can go back to the drawing board. If you find early success, you can build on that success by taking your venture to scale (or recruiting someone who can.) Never try to boil the ocean. And don’t fall for calls to “moonshot” thinking: It’s mostly BS.
- Locate the failure and do better than the legacy system. Most entrepreneurs want the path of least resistance, so they’ll steer clear of heavily regulated industries or sectors with giant incumbents. No more. Even areas the Centralists claim are to be provided by the state – such as welfare, money, and governance itself (Strong’s Corollary) – are the areas hungry for subversive innovation. Dare to go into those areas, even if you have to solve a problem within some legal gray area (as Uber did). If you can solve part of a bigger problem, you can still create value. Build upon that success later.
- Expect failure, but keep going. Failure can be demoralizing, but it’s part of a bigger process of experimentation and discovery. If you can set up your venture to fail early and cheaply, such will be less taxing on your body and soul. Patience and persistence will put you in a better position to succeed in the long run.
- Find your complementary team. No one should try to undertake a venture alone. A basic set of entrepreneurial types is visionaries, implementers, and marketers. Visionaries use their big brains to see the big picture and keep their eyes on the horizon, but they can get lost in the details. Implementers make the trains run on time and can execute details but can let details and processes distract from the vision. Marketers understand people and are savvy at communicating the value both inside and outside the organization, but they can’t always make things happen. Together, though, these three types can make magic.
- Always be branding. When it comes to branding, most entrepreneurs are the visual equivalent of those poor souls on American Idol who nobody told they’re tone-deaf. The difference is, no one finds it funny. Your brand is your front door. It speaks volumes before you can. Your brand should do 80 percent of the communication before you ever enter the picture. Some entrepreneurs sally forth with a potentially valuable product or service, but they only know how to be a transmitter. They haven’t a clue how to think like a receiver. To be a receiver is to put yourself in the minds of your customers and ask yourself how they are likely to interpret what you are transmitting. You have to brand everything, starting with your investor deck. And be sure always to practice the KISS principle. If you think you might be brand blind (like tone deaf), find someone capable of helping you develop your brand.
- Think locally, but you might have to act globally. Subversive innovators sometimes dream up their ventures in jurisdictions hostile to their goals. Can you deploy your innovation in another more hospitable jurisdiction? Even within the US some states are better than others, especially for decentralized finance. (See Wyoming) Other jurisdictions are better about certain kinds of secrecy. (See Nevada) However, if you’re thinking of innovating in ways that challenge the status quo, you might consider any number of offshore locations. Establishing a winning venture in another jurisdiction could help create the future for the one you’re in.
- Remain steadfast. Entrepreneurship has an associated set of virtues. One of the most important is courage. There will be predators and parasites that threaten to tear down what you build. Sadly, they are the enemy. Your effort to serve customers and create value is part of a new Great War. But don’t be afraid. Instead, imagine letting the Centralists win that war. Living in a world of surveillance, control, and equal poverty should instill more fear than functionaries’ threats and activists’ online paroxysms. Gird your loins and prepare to criticize by creating.
Subject. Citizen. Customer.
The word customer has a neutral or sometimes negative connotation. It can be associated either with the commercial domain in general or, specifically, to some sleazy car salesman who promises “great customer service.” But when we consider the three major types of relationships between an individual and an organization, it should open our eyes.
- If you are a subject, the primary relationship is one of obedience.
- If you are a citizen, the primary relationship is acting in an illusion of consent, then obedience.
- If you are a customer, the primary relationship is one of consent.
Such implies that the very idea of a public servant is largely a myth, and that it’s time to change the connotation of ‘customer.’
Citizens and subjects are an afterthought, whatever the stories we tell ourselves in civics class. If I am associated with a profit-seeking organization that renounces rent-seeking, I must serve those who choose to associate with me. If I am associated with a coercive state bureaucracy, I must serve a master with taxing authority (men with guns and jails).
This rationale extends to the civil society sector, too. Yes, it can be difficult to maintain two sets of customers (donors and clients), but solving such problems makes for better entrepreneurs whose fundamental imperative is still service.
These are fundamentally different relationships, and the preponderance of one or the other gives rise to the health or dysfunction of society. That’s why a revolution in entrepreneurship – subversive innovation – is the tip of the spear for societal change. Never forget that you are launching your attack from the highest moral high ground of all: consent. Your enemies will have to fight you from the low perch of compulsion.