There is a beautiful romance in this book, a romance with achievement in an age when achievement was valued. It can happen again, and a good first step is to study the lives and values of the greats of the last century to learn how and why.
The Gilded Age produced not only some of the richest men and women of all time; its freedom and opportunities built a nation of people of superlative character. This fantastic book from 1901 provides an in-depth look at the lives and choices of some of the most famous among them. The idea is to document the traits that make for great entrepreneurs.
Here it is presented with beautiful personal profiles. From the interviews and reporting, certain common features of success emerge: the need for a work ethic, the necessity of sacrifice, the role of being alert, the centrality of passion to success, the urge to serve others, the desire to break the mold, the willingness to adapt to change, profound attentiveness to real conditions, and also the biographical details of how a person goes from rags to riches.
These stories come out of an age of free enterprise. The American population was very anxious not to demonize the “men of wealth” but to celebrate and emulate them. There was a popular magazine called SUCCESS that was expertly edited. It ran a long series of interviews and profiles. This great book collects the best of them in a single volume. Most of these people have been forgotten, though their examples were once held up for generations of school kids.
Capitalistic success is heralded in these pages. But it’s not only about money. It’s about success in every field, so poets, dancers, composers, philanthropists, and journalists are in here. But the common thread here is entrepreneurship, which is that special capacity for acting on good judgments about an uncertain future. This quality is the driving force of the market and civilization.
Some of the names that were once known by everyone but are tragically forgotten today, all beautifully profiled here: Marshall Field, Alexander Bell, Helen Gould, Philip Armour, Mary Proctor, Jacob Could Schurman, John Wanamaker, Darius Ogden Mills, William Dean Howells, John D. Rockefeller, Thomas Edison, Andrew Carnegie, John Burroughs, James Whitcomb Riley and many others.
You will find out more about these people through these bite-size reports by top-flight journalists than from full biographies. You get to hear their own words about how they evaluate their success. It’s a great book for kids too, offering unforgettable life stories and lessons.
Because it was first published in 1901, a time when individual character truly mattered for success, there are ways in which this book is old fashioned but in the best possible sense: there is an extolling of the bourgeois virtues here, many of which seem to be lost today. In this way, this book is not only educational; it is deeply inspirational.
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Thomas Edison – use the patent system to steal your employees’ efforts and use the State to crush the competition. Sounds like a modern success story.
Then again, I’m a Tesla fan and may be biased.
Also of interest to me is the story that was probably never directly recorded; the story about the people with admirable character who did not achieve capitalistic success. Individual character may have mattered for such success then, but it may not have been enough.
On a matter of personal opinion, having good character is success in itself whether or not it leads to capitalistic success. After all capitalistic success is dependent also on decisions that other people make whereas individual character depends only on the individual’s decisions.
Mises most certainly was a success in the non-capitalistic sense.
J Murray, as with all the literature from this era, the patent issue is the one most likely to trip people up and this book is no exception. It is not revisionist on this issue.
Has anyone here ever read the book Outliers? I’ve heard about the book many times before, and was thinking about picking it up. From what I have heard, I would completely disagree with the thesis of the book (basically that successful people are successful because they are lucky and/or were born into a good situation), but don’t like judging things I haven’t read first hand. It seems like the antithesis of this book, and I was wondering if anyone would recommend it.
I have read the book Outliers. Even though I always find several things I disagree with, Malcolm Gladwell certainly does give me food for thought. Luck and being born into a good situation are both chance events that are not within our control. I do not think Gladwell has presented the strongest case that such events are the exclusive deciding factors of success, nevertheless I do have to admit that our success often does depend on things that are beyond our control, even if they are not necessarily chance events.
I would recommend that book although I do not agree with everything he says. First of all he gives food for thought. Next is the obviously true fact that people in today’s world do define success using measures that they do not have full control over (like the size of their bank account). Even if birth circumstances or luck may not be those uncontrollable factors; I still think it is a good idea if more people realize the fact that given the way they define success, some factors responsible for bringing it about will remain outside their control. At least there will be fewer wild goose chases.
The alternative is to define success using those aspects of life that one has complete control over and then live to that ideal. At the end of your natural life you will know if you are a success. That is what Nassim Taleb recommends in his book ‘The Black Swan’. Maybe I should be recommending that book to you. But I have read both and would recommend both.
If I may ask, the copy of this book at the highschooler seminar that you hold up has a red cover and is obviously an original printing.
Did Mises.org print this new one yourselves?
The problem with books like “The Millionaire Next Door” (probably a retired police officer if you live in California) is survivor bias. They provide stories showing how people who followed certain strategies achieved success. The problem is that for every person who was successful using the strategy, most people using the same strategy are not. You only hear about the success and not about the failure.
When I first saw the Summer Mansions in Newport, Rhode Island what surprised me was that was a common thread about where the original owners got their money. Many had exclusive contacts with the US Government, or had businesses that were subsidized by the US Government. So much for free enterprise.
The first time I heard about survivor bias was in Nassim Taleb’s book ‘The Black Swan’. I found the concept very appealing. I was alluding to it in my earlier comment.
“If they had invented Facebook, it’s them who would have invented Facebook”, right?
Hardly. We are all obsessed with the image on this hero inventor coming with a remarkable solution to a brand new problem. But ideas rarely have such virgin birth. What happens is that someone perfects something that is already there, gets an all inclusive patent and then sues the rest into obscurity. He can do that because the judges too live in a world obsessed with the idea of the superman hero type inventor and knows no better and does not care.
Even in the movie Mark Zuckerberg did borrow and improve upon other people’s ideas. He did not ‘invent’ face book. But the facebook is cornering patents, innovations in social networking could be stifled for decades to come. Zuckerberg is only 26. He is not retiring anytime soon.
Moral of the story, don’t be obsessed with catch phrases from ‘super-heros’.
That’s actually how I see the quote.
If it hadn’t been Mark diddling existing software with good results, it would have been someone else. The guy on the workstation next to him, maybe.
Throw dice. Maybe win.
Living not very far distant from Bell’s summer home of Beinn Bhreagh in Baddeck, I was especially interested to read his words of encouragement.
Curiously, Bell shared with Aristotle and Aquinas a faith in practical reason: of identifying a problem, marshalling the resources—intellectual and material—need for its resolution, and then setting out to get the work done. Or, as von Mises wrote in The Ultimate Foundation of Economic Science:
According to Bell,
What was perhaps most encouraging were Bell’s words that are apropos for we older students of Austrian economics!
>>>The problem with books like “The Millionaire Next Door” (probably a retired police officer if you live in California) is survivor bias.
Some other problems are:
(a) people lie about themselves, particularly when the lie conceals something shameful and replaces it with something laudable; and
(b) there is a strong disincentive to revealing the brass-tacks, nuts-and-bolts truth about what exactly one does to make money — it invites people to copy you.
“(a) people lie about themselves, particularly when the lie conceals something shameful and replaces it with something laudable; and”
Or they allow untrue myths to perpetuate. How many people know that Donald Trump and Warren Buffett started off with large inheritances?
And both of them liberally utilize State subsidies and lobby people in positions of power to grant monopolies for their own businesses?
I love this book and now have a pretty bound copy to buy for my kids. Excellent.
Oh come now. Some of you seem to measure your progress through life as though meaningful progress is a near impossibility. Here’s news to you. It isn’t THAT difficult to do really well. I am reminded about a guy I did a business deal with in Los Angeles. I was driving to lunch with him and he said this. “If you live here and can’t make $2-million a year, then there is something wrong with your head.” We discussed this at length during lunch. He is a self-made man who has spent a lifetime in manufacturing and logistics. He built up a business for his family. He reckons it’s all about thinking through your options before you act upon them, learning from your mistakes and never repeating them. He says that building honest wealth is about being honest to yourself about what you are doing. I asked him about the “Millionaire Next Door” book and he reckoned much of that is accurate. He says wealth is accumulated through a campaign of long term directed effort (note that he stressed the effort one expends is directed). He says it is a matter deciding what you want to do with your life and learning how to do it. “Do you really know what are YOUR goals?,” he asked. “Have you really thought about what you want to do with your life?” “What do you want YOUR niche to be?”
Making yourself a better life isn’t as hard as some of you appear to pretend. Yes, it certainly requires an investment of time and effort on an on-going basis. It certainly does require continual effort. It does require constant analysis and evaluation. It does require consistent purposful action in the application of your thought. It requires learning from mistakes and never repeating them. OK, this isn’t as superficially appealing as getting rich quick, winning lotto and “making it big” all in one go, but spending one’s life waiting on a wish isn’t going to achieve much for you.S MacLean’s comments are worth reading and considering and applying.Sione
I agree that it is entirely possible to make a substantial income, and it is possible to do so ethically. The problem I was referring to had less to do with the actual making of profit than with the way people typically TALK about the making of profit.
It’s always short on details and EXTREMELY long on self-aggrandizing claims of virtue and strength of character.
Let’s take a look at your post — here we have someone who has access to a very wealthy individual, who himself asserts that making millions is almost too simple for him to take the time to explain how one does that. There is no mention of what business he is in (only “manufacturing and logistics”), what exact function he serves in that type of business, how he started, how he grew, what changes occurred from the beginning of his involvement until now, and the CONCRETE actions he has taken on a day-to-day basis that ACTUALLY contributed to his success.
I realize that there may be a nearly infinite number of ways to accomplish what this man has done, so specifics are not always replicable, but for ONCE I would like for someone to provide the actual nitty-gritty details of what these people actually DO, honestly and accurately, so that the rest of the working world can make the interpretations and conclusions for themselves about how to explain it.
My interpretations and conclusions about what the actual causes and explanations of his wealth might be different from the one he chooses to disclose to me.
In light of the 10,000+ business books in the bookstores, and countless college courses being taught every semester, you would think that some details about the path to success might actually have been revealed in the history of mankind, but apparently not.
Instead of details, we are treated to the same kind of vague, self-congratulatory stuff that one always hears. (“it’s all about thinking through your options before you act upon them, learning from your mistakes and never repeating them. He says that building honest wealth is about being honest to yourself about what you are doing”) (“Making yourself a better life isn’t as hard as some of you appear to pretend. Yes, it certainly requires an investment of time and effort on an on-going basis. It certainly does require continual effort. It does require constant analysis and evaluation. It does require consistent purposful action in the application of your thought. It requires learning from mistakes and never repeating them.”)
It’s possible to get painstakingly detailed information about how to operate a machine tool, repair an air-conditioner, or prepare an accounting report. It is, however, apparently impossible to expect successful entrepreneurs to disclose the accurate details of their activities.
Phinn
“here we have someone who has access to a very wealthy individual, who himself asserts that making millions is almost too simple for him to take the time to explain how one does that.”
Really? Where in my post is the assertion “that making millions is almost too simple for him to take the time to explain how one does that”? I reckon you are making that up out right of your imagination.
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What you need to understand is that doing well is not something that you are going to magically devine just because you were taught some academic courses in a college or because you happened to read some texts or you happen to have a casual interest in being successful. The skills required are learned “on the job.” There is no other way to achieve the knowledge and experience you need other than by DOING.
Recently I was listening to a concert condicted by Andre Rieu. He is a world famous musician who conducts an orchestra. The music is excellent and his concerts are most enjoyable and entertaining. I enjoyed his concert so much that I went out and purchased his biography. I read that cover to cover. He discusses the most important stages in his trip from talented violin player with some potential, through music shools and academies with various music teachers, through to becoming a member of a philharmonic, through to his original dream of setting up a Pizza restaurant, through to setting up his first ensemble, through to building up an orchestra, through to what he does presently. He explains how the opportunities presented themselves to him, how he recognised them and what decisions he made. Now he is a multi-millionaire and famous. That is one of the results of where the totality of his decisions and actions took him. He also ended up marrying his muse and sweetheart. He has good friends and loves his children. He does what he enjoys for a career and is more than a little happy about that.
Now what the book does not specifically explain to me is how to play the violin. Nor does it explain to me specifically how Andre recognised that his strongest talents and path to happiness lay in a different direction from becoming a world class virtuouso on the instrument and how I could do exactly as he did, were I to play violin at a top level. Nor does it show me exactly what I’d need to learn in order to get to his level of competance in showmanship, nor does it explain to me exactly how to motivate and organise an orchestra, or how to select the music to suit an audience (and the particular skills of the musicians in the orchestra), or how to organise rehearsals so that the members of the orchestra gain maximum beneifit. The book fails to inform me of how to deal with all the professionals, agents, concert hall administrators, television executives, bankers, sponsors, liquor outlets, stadia, copyright and various IP officials, regulators, etc. etc. etc. It doesn’t even let me into the dark ecret about who to listen to for advice, who to take seriously and who to ignore. It does not explain to me exactly and specifically how to recognise a real opportunity in the world of musicians. It does not explain to me how to build a career in music which is going to make me wealthy and more importantly, very happy. It does not even explain to me specifically how Andre set his goals- the why, when and how. It never tells on what basis he changed some of them and how that came about. I am in the dark about how the man evaluates things and I have no real idea what his subjective preferences actually are or how he generated them and why on Earth that is as it is. Worst of all is that the book does not explain to me what the qualities I should look for in a wife actually are and how I’d know when I’ve married the right one. Holy moly, golly gosh- there are no specifics in the whole book. It’s just Andre telling the story of how he got from boyhood through to the present.
What I want is to know is specifically what the exact function he serves in his type of business actually is, how exactly he started, how he grew, what changes occurred from the beginning of his involvement until now, and the CONCRETE actions he has taken on a day-to-day basis that ACTUALLY contributed to his success. I realise that there may be a nearly infinite number of ways to accomplish what Andre has done, so specifics are not always replicable, but I would like for him to provide the actual nitty-gritty details of what he actually DID, honestly and accurately, so that the rest of the working world can make the interpretations and conclusions for themselves about how to copy him and get stinking rich without the intellectual and physical efforts of having to waste time working out what to do for themselves and actually doing it.
But aside from repeating what is in the book in a little more detail over a dinner or four, it is likely that Andre couldn’t add much more of fundamental importance than what he’s already written. He’s already told me everything that he can write, there, in his book. The ONLY way for me to really understand is to up stakes and start on my own career pathway. Sure, I can follow Andre around for a while, even become his apprentice, but even that is chosing to starting a career pathway which requires me get into the dirty business of DOING. I mean, how do I know to decide that I should contact Andre and apply to be his apprentice? And what should I do if he declines my application? And assuming he takes me on, how do I recognise what is important in what he is doing and what is trivia? I mean, specifically? How? And once I know about that, how do I make a conclusion and then test if it is correct and whether it applies to my circumstances?
Now, as it happens, my interpretations and conclusions about the actual causes and explanations of his wealth might be different from the one he chooses to disclose to me. I’ll never really know enough about that unless I have the experience and real knowledge to bring to bear on the subject. Again, what is necessary for me to gain that is DOING. I can spend all my time following him about or I have to get out and about and start building MY life and career.
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The first step is actually the most difficult one. It is the decision to start. One has to throw one’s hat in the ring and make the start. That means being honest enough to identify what one’s skills, advantages and limitations really are. It means identifying one’s potential and really, really important, identifying what one is interested in (to the point of being passionate about it) and interested in doing (to the point of enjoying it). To do that you need to be involved in doing something real (like working in an industry sector). Else you may as well be makin’ wishes about fairy tales.
The second step is to set realistic goals. To do that you need to gain some experience and experience comes from practice. Again, you need to be engaged in doing something real (like working in an industry sector).
As to the rest, you are not going to get detailed explanations of exactly how to live your life from anyone other than some socialist piece of shit (those guys reckon they know how EVERYONE should be forced to live).
Always remember, no matter how much advice you read or receive (always listen to it and evaluate it) in the end you are making decisions on your own. It is YOUR life to lead and there is no instruction book. Every entrepeneur is in the same situation.
Good luck.
Sione
>>> Where in my post is the assertion “that making millions is almost too simple for him to take the time to explain how one does that”? I reckon you are making that up out right of your imagination.
It was in this line: “If you live here and can’t make $2-million a year, then there is something wrong with your head.” The phrase “wrong with your head” implies that it is so simple that he should not be bothered to explain it all.
>>> It does not even explain to me specifically how Andre set his goals- the why, when and how. It never tells on what basis he changed some of them and how that came about. … The second step is to set realistic goals.
I have not read the book you described at great length, but your assertion about the importance of setting goals, which you define as “realistic” (albeit without criteria for this free-floating adjective), apparently did not come from that book.
>>> you are not going to get detailed explanations of exactly how to live your life from anyone other than some socialist piece of shit
I am not looking for normative exhortations from socialist pieces of shit. I have heard enough of those for one lifetime. I am looking (in vain) for positive, descriptive and accurate summaries of the actual economic factors that contributed to the success of successful entrepreneurs, as opposed to the self-serving, virtue-touting, normative, superficial gloss that has completely dominated this type of literature since the dawn of time.
>>> Every entrepeneur is in the same situation.
Yes, but not every mechanic, nor every tradesman, nor every manager of a Starbucks.
For some reason, the lower one goes down on the social class scale, the more concrete the available information is about how to do one’s job. As one goes up the social class scale, the more abstract, theoretical and normative the conversation becomes — descriptions of action are replaced with assertions of how virtuous the successful practitioner is. By the time one starts talking about how successful creative types do their work, the explanations for their success become downright mystical.
Phinn
The implication that he couldn’t be bothered to explain what he did is one you generated. That has no relationship with what occurred or what I wrote about my lunch with the guy. During our lunch he discussed the topic with me at length. Your accusation that he couldn’t be bothered remains incorrect. Don’t jump to unsupportable conclusions.
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“Realistic” means pertaining to reality. I am referring to setting realistic goals in the sense that they are attainable, as opposed to mere wishes or dreams. For example, I can dream about being the fastest sprinter in the World over 100 metres, but at my stage in life the reality is that such a dream is not attainable for me. It is quite unrealistic. Were I interested in track and field then the thing to do would be to assess what opportunities really ARE available to me (which also requires of me an honest self-assessment, as previously posted). Perhaps becoming an agent for athletes or a venue manager or some such would be what I would be able to do. I’d need to find out and set realistic goals to suit my specific circumstances and interests.
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With regards to what entrepreneurs do in terms of economics, the best you are likely to come across is what Von Mises or Reisman writes about them. Entrepreneurs use their judgement (based on experience and previous knowledge) to make predictions about what the public will want and then they arrange the resources at their command to provide exactly that. If they get it right they will profit. If not, they will lose.
The key issue is putting oneself in the position to make the judgement with the best ability to be correct. That takes experience. You have to be in the game to play it and to play it well takes experience and knowledge. It isn’t something you’ll get from a book.
Put it this way. You can read as many books as you like about playing the violin, but you’ll never play worth a damn unless you pick one up and practice and practice and practice…
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Think about why it is that the lower down you go on the social scale the more concrete and prescriptive the information available about the associated jobs. It is because the range of action is modest and limited. It is because there is less responsiblity for one’s range of action. It is because the tasks involved are simpler and more likely to be mechanistic and repetative. For example, a line worker has less responsibility than the shift supervisor. There are less decisions for him to make and his scope of action is more restricted- hence easier to prescribe in detail. Meanwhile the shift supervisor has less responsibility than the operations manager, who in turn has less than the CEO. As you climb up into the areas where decisions regarding the deployment of the company’s resources become more serious (the stakes are higher), then the job specifications become far less mechanistic. There are too many variables to be able to write it all down in a completely 100% prescriptive specification (if such could be done then it would not be necessary to seek skilled people and pay them a lot of money for such roles as all that would be required is a reasonably honest person who could be relied upon to do exactly what the specification states). It is expected that the occupants of such positions have the experience and knowledge to undertake the roles they occupy. That’s one good reason to spend a lot of effort when recruiting these guys- the company needs to get it right. On the other hand a lower position isn’t as much of a difficulty to fill in regards to this issue and so less effort is expended. The entrepreneur is a CEO, owner, operations manager, finance manager, accountant, marketing manager, salesman, engineer, line worker, supervisor etc. all rolled into one (certainly he is that at the beginning of his adventure anyway!).
When dealing with the matter of an entrepreneur’s path to success, each is different. A specific prescription is not available. Even if one were able to record exactly what a successful entrepreneur did over a lifetime, that wouldn’t really help another person setting out. Their situation would be different. They face a different lifetime of decisions and actions.
An entrepreneur may be able to discuss some highlights, some especially important decision or key opportunity they spotted, but in the end their success is down to the sum total of myriads of tasks successfully completed, many lessons learned and lots of banal decisions made each day.
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By the way, the comments I related from my business associate are not vague and self-congratulatory. Those are the demands he requires of himself. He’s done a lot of thinking about what he does and how he accomplishes it. As a man who is introspective, he has spent the time to try and nail down what he does so that he can examine his behaviours and make improvement. We had a good conversation about what he’s learnt. I’m glad I listened as it was well worth hearing him out.
Another guy I’ve met was a leading engineer in the automotive field. His entire career was spent inventing machines/mechanisms and making innovations. Shortly before he died I asked him why it was that he and the people he surrounded himself with were able to innovate when so many engineers simply applied standard prescriptive solutions to problems instead. He reckoned there was no book that explained innovation, one had to learn how to do it. He thought it was a skill that could be taught, but that it was a skill that required learning by doing. How that contrasted with what one of his family members stated. That relative reckoned you were either born to innovate or you weren’t!
In any case, just as there is no prescriptive specification on innovating (although people have tried for years to come up with a “system”), there isn’t a prescription one can look up in a book to determine how to be an entrepreneur. It’s learnt in the DOING.
Sione
>>> Think about why it is that the lower down you go on the social scale the more concrete and prescriptive the information available about the associated jobs. It is because the range of action is modest and limited. It is because there is less responsiblity for one’s range of action. It is because the tasks involved are simpler and more likely to be mechanistic and repetative. …As you climb up into the areas where decisions regarding the deployment of the company’s resources become more serious (the stakes are higher), then the job specifications become far less mechanistic. There are too many variables to be able to write it all down in a completely 100% prescriptive specification
You have your causes and effects exactly backwards. Let me explain.
Before the Industrial Revolution (and in some lingering fields, up to and including today), all of the skilled trades were considered to be precisely as un-quantifiable and mysterious as you describe the CEO function.
Every skilled occupation operated on a far more customized basis, demanding experience and skill needed to adapt to irregular and unpredictable situations. Before assembly lines, coaches were built by hand. Houses were custom-built, and the carpentry involved had dozens of sub-disciplines, none of which were shared with each other. Skilled metal-workers such as gunsmiths, silversmiths and locksmiths were all trained in the apprentice system you describe — it was universally believed that one could ONLY learn these things by doing, in the master-apprentice system that had existed since the dawn of civilization.
One of the ways that every one of these trades sought to gain an economic advantage was to keep its skills and methods a SECRET. This was done as a way to exclude competition. Every trade was surrounded by a nearly infinite layer of propagandistic bullsh*t designed to make the actual practice of the trade MYSTERIOUS. The skills and methods were not written down, thus there was no effort expended in analyzing them in a way that was amenable to being written down.
This was true not only for things like masonry and furniture-making, but even more artistic occupations like musicians and portrait-painters as well, which (like being a CEO) were practiced in a way that was intended to be adaptive to changing circumstances, not mechanical and repetitive like a factory worker operates today.
Let me give you another example — the Asian martial arts. Jujitsu is a dynamic, complex practice, and learning a few mechanistic movements means nothing, because violent combat is essentially unpredictable. It takes years of practice to develop the skills in a way that one can use them in real time. Same goes for anything that’s complex and interactive, including tennis or fencing.
The Asian martial arts still retain a lot of the MYSTERY and SECRECY that I described above with regard to skilled trades. This was (and is) done for an obvious economic reason — teachers did not want their hard-earned content to be freely available. Systems were not written down, and when they were, they were either written in code, or in so abstract a way that they were useless to anyone but another high-level teacher. (These late-medieval scrolls still exist, in China and Japan.) Anyone teaching without a license (and payment to the licensor) could be severely punished or killed. Revealing the information to anyone who was not bound to you economically was considered shameful.
You can see the same kind of attitudes with regard to entrepreneurship today — it’s unteachable, it can only be learned by apprenticing, it’s too complicated to be analyzed in a book, etc.
Whenever you do see a book written on some of these subjects, much of the concrete information is intentionally left out. This is because such books are written NOT to actually teach anyone anything, but as a sales device for the author — to set himself up as a leading expert in the field, and drive students/customers to himself, which he accomplishes by saying that only the barest of preliminaries can be revealed in a book, and for the rest, you need to come to him for personal instruction and service.
The reason that you can find high-quality instruction about various trades in print (or on video) today is that there was a concerted effort in the late 19th and early 20th centuries to BREAK this wall of SECRECY surrounding those trades. This information-revealing process was the work of entrepreneurs, actually, to strip away the MYSTERY surrounding them. The entire purpose of this effort was to make the practice more easily replicated, so it could be done by an employee in an industrial setting, rather than by a skilled tradesman doing custom-only work, who almost never revealed his methods to anyone. Frederick Winslow Taylor was one of the more prominent figures in this movement to make production more mechanistic and less mysterious.
Look at making clothing, for example. It used to be 100% custom, so that you had to go to an elderly tailor to get a suit made. His skills and methods were treated with hushed religious sanctity, revealed to no one! But, some enterprising people worked very hard over the last 100 years to analyze the suit-making process, and now you can buy a well-fitted suit that is 90% made in a factory somewhere.
Let me give you one of the very few examples of high-quality concrete instruction in the art of entrepreneurship that I have ever seen. It comes from an unlikely source — Gordon Ramsey, chef and restaurateur. He’s highly skilled as a cook, and also a great entrepreneur, having shot to the top of the British swank-restaurant field, which is highly competitive.
He produces a TV show called Kitchen Nightmares, where he travels to failing restaurants, meets with them over the course of 3-4 days, analyzes their failings, and teaches the owners how to fix it. He tells them in concrete detail what they need to do. He shows them the local market factors they need to consider, to find a new niche.
The show contains a lot of the usual hocus-pocus you see on “reality” TV, in order to make it appealing as a TV show (dramatic editing, voice-over narration, good-guy and bad-guy casting, etc.). But in between all of that, there is some AMAZING business consulting going on. He teaches them about cost-benefit analysis of putting certain types of foods on the menu, employee management principles, market analysis, advertising ideas that are perfectly suited to that particular location and type of eatery (which are all different, from soul food shacks to swanky upscale white-glove places).
Ramsey is the most amazing restaurant entrepreneur I have ever seen, and an amazing teacher of entrepreneurship. He not only knows how to cook, and how to run a restaurant, but also how to explain all of that to others, and is actually willing to do so! I have never seen anyone able and willing to do all four of these, and thereby reveal so much of the meat of the content of his entrepreneurial skill anywhere, in any field. In this case, it’s done for a reality TV show, so this information could be gathered and presented in an even more beneficial and concrete way, if he wanted to, by stripping away the TV show theatrics.
If this can be done for restaurants, it could be done for any small business.
It’s not done. It’s not done for the SAME reasons that coach-builders, masons, carpenters, tailors, gunsmiths and all the rest kept their methods an un-analyzed SECRET for centuries — economic protectionism.
Entrepreneurs broke down much of that protectionist secrecy, over the last century, because it suited their interests to do so.
The same thing can be done for entrepreneurship itself.
Sione and Phinn,
Your conversation is fascinating.
Thanks for the great read.
Phinn
An analogy may display a similarity with a contention under review, but that does not make it the same as or even applicable to it. It’s a tool best used with careful precision.
You make the claim that I’ve got cause and effect exactly backwards and then start off on an analogy. Your analogy does not hold. It is irrelevant to the topic under investigation. For a start, the attributes and behaviours of trade guilds are not the same as the attributes and behaviours of an entrepreneur.
If my contention has cause and effect backwards then THAT is what you need to demonstrate. That is, you need to explain that the reason for simpler jobs being more prescriptive is NOT due to their limited range of action, limited responsibility, limited requirement to make decisions etc.
Further, you should avoid introducing your biases, characterisations and assertions to the discussion and attributing them to me. For example, I do not consider the role of a CEO to be “mysterious”. That is not my position and I’ve not made that claim. The role is one that is learnt by practice. It takes time to develop the skills and experience to be good at it, as with playing violin.
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I’ve seen the Ramsay show. It’s entertaining enough. There are a few points to make. Firstly, the restaurants Ramsay visits are ALREADY engaged in operating their own businesses. In that sense they are engaged in entrepreneurship.
Secondly, Ramsay attempts to remedy the problems and mistakes as he evaluates them to be. As you’d have watched he does things like alter the menu, clean up the kitchen, seek efficiencies, market the business (sometimes that means holding a grand reopening), make staff changes, make role changes and so on. He does the things he would do if it were his own restaurant (or goes as far as he is allowed to by circumstances, after all he is not the owner, only an advisor-consultant). He does this on the basis of his previous knowledge and experience (much of which the subject restauranteurs do not have). What you (and they) are witnessing is the behaviour of an experienced entrepreneur, in this case Gordon Ramsay. He makes many decisions and takes actions that he expects will assist the business to succeed. What is important to realise is that when he decides to, say, redecorate, or change a menu, the exact specifics of what he decides to do are not something out of a book. While it is possible to make a list of the steps he appears to take on each occasion, the nature of the decisions is a result of his experience and previously developed knowledge. He knows what to do and how to do it (and he’s good at it) because he learned and practiced “on the job” already. It aint book-work.
Thirdly, what becomes to the restaurants after Gordon Ramsay has departed? Many fail and go out of business anyway. That’s not his fault. That is the nature of business. No matter how good an instructor, no matter how good an entrepreneur Ramsay is, he can’t magically make the subjects of the show into successes. They are the ones who have to do that. They travel alone.
Forth, most people are not receptive to what makes a good entrepreneur. The TV show is directed at a particular target audience and is as it is for that reason.
Finally, no matter what details about Ramsay’s business ideas and activities are placed on the TV, it will not make much difference. You can’t learn how to be an entrepreneur without engaging in the activity. In the end you have to be DOING. That’s how it is done. It is the ONLY way it is done. There is no mystery to it, just lots and lots of practice.
Sione
Sione, I very much enjoyed your thoughtful posts on this subject. Excellent stuff.
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