Apr 13th 2022

Experimental Entrepreneurs

by David Galenson

David W. Galenson is Professor of Economics at the University of Chicago; Academic Director of the Center for Creativity Economics at Universidad del CEMA, Buenos Aires; and a Research Associate of the National Bureau of Economic Research. His publications include Old Masters and Young Geniuses: The Two Life Cycles of Artistic Creativity (Princeton University Press, 2006) and Conceptual Revolutions in Twentieth-Century Art (Cambridge University Press and NBER, 2009).


Steve Jobs dreaded turning 30, because he knew it would be fatal to his creativity: "It's rare that you see an artist in his 30s or 40s able to contribute something amazing." Mark Zuckenberg was even more blunt -- "young people are just smarter" -- and his Silicon Valley neigbor Vinod Khosia agreed: "People under 35 are the people who make it happen."

The economic historian Jonathan Hughes wrote that with the Model T, “Henry Ford and his men made a revolutionary machine and a revolution. They made a light, strong, powerful, efficient, simple, dependable and cheap automobile.” Hughes believed that the Model T made the automobile” perhaps the most powerful instrument of egalitarian American democracy,” and judged that “Ford liberated the common man on a greater scale than any hero in history”- surely a dent in the universe. Yet the Model T was not the product of a momentary stroke of genius, but rather the result of a painstaking process of more than 15 years in duration, that began when Ford, working nights after his day job as an engineer for the Detroit Electric Co., built a one-cylinder engine in his kitchen, then proceeded to construct a motor car by hand in the woodshed behind his home. When Ford introduced the Model T, he was 45 years old.

Henry Ford worked by trial and error, and never accepted any result as final: he declared that “We will rip out anything once we discover a better way,” and his workshops were marked by constant experimentation. His plan for personnel was perpetual ferment, with no formal titles or duties, but constant competition. A fellow mechanic early in Ford’s career recalled that “he always figured that there was some little improvement he could make,” and he maintained that attitude toward all his projects throughout his life.

Steve Jobs doubtless would have considered Henry Ford an anomaly, a rare case of an entrepreneur who innovated well past the first blush of youth. In fact, however, Ford was an archetypal experimental entrepreneur. Experimental entrepreneurship is often overlooked: experimentalists are less flamboyant than their conceptual peers, and their innovations arrive gradually and less conspicuously (even Ford’s Model T arrived only after a series of earlier cars – Models A, B, C, K, N, R, and S). Always uncertain, they work patiently to innovate, cautiously proceeding by trial and error in pursuit of ambitious but imprecise goals. They gain knowledge and judgment over the course of their careers, and often arrive at their greatest achievements late in their lives.

Many recent experimental entrepreneurs can be cited, in a wide range of activities. At the age of 52, Ray Kroc signed a contract with Mac and Dick McDonald that gave him the right to franchise copies of their California hamburger drive-in; he opened his own first McDonald’s a year later. Michael Young, who declared “I have never had an idea that I was sure about,” became the first chairman of England’s Consumers’ Association at 42, and founded the National Extension College, the forerunner of the Open University, at 48. Sam Walton opened Wal-Mart No. 1 in Rogers, Arkansas, at 44, and discovered “that there was much, much more business out there in small-town American than anybody, including me, had ever dreamed of.” At 53, Warren Buffett wrote in his annual letter to Berkshire Hathaway shareholders that “your chairman, always a quick study, required only 20 years to recognize how important it was to buy good businesses.” Managing radio stations with the philosophy “Try this, and if that doesn’t work, try something else,” Bill Siemering became National Public Radio’s first director of programming at 36, and founded Developing Radio Partners, to help independent radio stations in Africa and Asia, at 69. Later recalling that “I was walking blind and learning as I went along,” Muhammad Yunus reluctantly gave up an academic career to manage his Grameen Bank at the age of 39, and 27 years later shared the Nobel Peace Prize with the bank in recognition of microcredit as a tool in the fight against poverty. At 45, after making more than 5,000 prototypes over 14 years, James Dyson made his first fully functional cyclone vacuum. His formula for entrepreneurial success: “Patience, patience, patience.”

Steve Jobs believed that an entrepreneur’s most valuable trait was a beginner’s mind. Jobs was a great entrepreneur, but a very bad scholar of entrepreneurship. He completely failed to recognize that successful entrepreneurship could be a result of wisdom gained from years of experience. Charlie Munger attributed Warren Buffett’s success to the fact that he is a “learning machine.” This may be an apt characterization of all the experimental entrepreneurs considered in this article. All immersed themselves in an industry and never stopped working to learn all they could about it. None ever stopped trying to improve their products, no matter how successful they became. And although all were learning machines, with time and experience all developed judgment and wisdom in their chosen trades that no machine has been able to match.


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More Essays

Sep 11th 2023
EXTRACT: "Many people have dipped their toe into the lazy gardener’s life through “no mow May” – a national campaign to encourage people not to mow their lawns until the end of May. But you could opt to extend this practice until much later in the summer for even greater benefits. Allowing your grass to grow longer, and interspersing it with pollen-rich flowers, can benefit many insects – especially bees. Research finds that reducing mowing in urban and suburban environments has a positive effect on the amount and diversity of insects. Your untamed lawn won’t only benefit insects. It will also encourage more birds, such as goldfinches, to use your garden to feed on the seeds of common wildflower species such as dandelions."
Aug 30th 2023
EXTRACT: "Eliot remarked that Shakespeare's greatness not only grew as the writer aged, but that his development became more apparent to the reader as he himself aged: 'No reader of Shakespeare... can fail to recognize, increasingly as he himself grows up, the gradual ripening of Shakespeare's mind.' "
Aug 25th 2023
EXTRACTS: "I moved here 15 years ago from London because it was so safe. Bordeaux was then known as La Belle au Bois Dormant (The Sleeping Beauty). It's the wine capital of France and the site of beautiful 18th century architecture arrayed along the Garonne river." ---- "What’s new is that today lawlessness is spreading into the more comfortable neighborhoods. The favorite technique is to defraud elderly retirees by dressing up as policemen, waterworks inspectors or gas meter readers. False badges including a photo ID are easy to fabricate on a computer printer. Once inside, they scoop up most anything shiny as they tip-toe through the house."
Aug 20th 2023
EXTRACT: "The 1953 coup d'etat in Iran ushered in a period of exploitation and oppression that has continued – despite a subsequent revolution that led to huge changes – for 70 years. Each year on August 19, the anniversary of the coup, millions of Iranians ask themselves what would have happened if the US and UK had not conspired all those years ago to overthrow Iran’s democratically elected leader."
Aug 18th 2023
EXTRACT: "Edmundo Bacci: Energy and Light, curated by Chiara Bertola, and currently on view at the Peggy Guggenheim Collection in Venice, is the first retrospective of the artist in several decades. Bacci was a native of Venice, a city with a long and illustrious history of painting, going back to Giorgione and Titian, Veronese and Tiepolo. As a painter, he was thoroughly immersed in this great past – as an artist he was determined to transform and remake that tradition in the face of modernity and its vicissitudes, what he called “the expressive crisis of our time.” That he has slipped into obscurity affords us, at the very least, an opportunity to see Bacci’s work essentially for the first time, without the burden of over-determined interpretations or categories."
Aug 12th 2023
EXTRACT: "Is Oppenheimer a movie for our time, reminding us of the tensions, dangers and conflicts of the old Cold War while a new one threatens to break out? The film certainly chimes with today’s big power conflicts (the US and China), renewed concern about nuclear weapons (Russia’s threats over Ukraine), and current ideological tensions between democratic and autocratic systems. But the Cold War did not just rest on the threat of the bomb. Behind the scientists and generals were many other players, among them the economists, who clashed just as vigorously in their views about how to run postwar economies."
Aug 5th 2023
EXTRACT: "I have a modest claim to make: we need Bruno today more than ever. This is because he represents an intellectual antidote to the prevailing ideology of today which tells us that we are doomed to finitude, which comes down politically to the assertion that there is no alternative to the reign of global capitalism. Of course, Bruno did not know about capitalism, globalization or neoliberalism. What he did know however is that humanity is infinite. That we are limited only by our own narrowness of vision."
Jul 26th 2023
EXTRACT: "We studied 55,000 people’s dietary data and linked what they ate or drank to five key measures: greenhouse gas emissions, land use, water use, water pollution and biodiversity loss. Our results are now published in Nature Food. We found that vegans have just 30% of the dietary environmental impact of high-meat eaters. The dietary data came from a major study into cancer and nutrition that has been tracking the same people (about 57,000 in total across the UK) for more than two decades."
Jul 26th 2023
EXTRACT: "Art historians have never understood economics, and as a result they believe they can ignore markets: in their view, the production of art can be treated in isolation from its sale.  This is of course disastrously wrong.  But their ignorance has led to a neglect of the economic history of art. "
Jul 13th 2023
EXTRACT: ".....art purchases and prices have plateaued. The prevailing mood at this year’s Art Basel was one of anxiety, as dealers roamed the halls searching for answers. Some speculate that the state of the art market indicates declining confidence among the world’s richest people. When the economy is booming, collectors are more inclined to invest in art and take on leverage, especially when borrowing costs are low. But these dynamics can shift quickly during downturns. The 2008 crisis, for example, caused art prices to fall by 60%."
Jul 13th 2023
EXTRACT: "But even if you’re having trouble motivating yourself to exercise, many types of physical activity may be helpful as long as you do them regularly. For example, walking, gardening and household chores (such as cooking, hoovering and dusting) may prevent symptoms worsening and improve quality of life. And, these activities may be easier to incorporate into your daily routine than a gym workout."
Jul 12th 2023
EXTRACTS: "Insect populations are declining worldwide at a rate of almost 1% per year. This decline is alarming. Insects play a crucial role in pollinating crops, controlling crop pests and maintaining soil fertility. In the UK alone, pollination provided by bees and other insects adds over £600 million to crop production every year. That’s about 10% of the country’s total annual crop value. Through pollination, insects also make sure that fruit and vegetables are packed full of the vitamins and minerals needed for healthy human diets. Insufficient pollination would result in lower-quality foods, less choice and higher food prices." .... "Just like fertiliser and water, these insects should be considered a legitimate agricultural input that needs to be protected and managed sustainably."
Jul 6th 2023
EXTRACT: "But whatever the truth may turn out to be, the Lindemann affair raises a question that has been hotly debated over the past few years, especially in the United States, but more and more in Europe, too: must art be judged by the private behavior of its creator? It has become fairly common for critics to denounce Pablo Picasso’s paintings because he made women in his life suffer. A well-known movie critic declared that he could no longer view Woody Allen’s films in the same way after the director was accused, without any evidence, of abusing his seven-year-old adoptive daughter. Roman Polanski’s movies are no longer distributed in the US, because he drugged and raped a 13-year-old girl in 1977."
Jun 25th 2023
EXTRACT: "There’s a great deal of research showing that people with negative personality traits, such as narcissism, ruthlessness, amorality or a lack of empathy and conscience, are attracted to high-status roles, including politics. In a representative democracy, therefore, the people who put themselves forward as representatives include a sizeable proportion of people with disordered personalities – people who crave power because of their malevolent traits. And the most disordered and malevolent personalities –the most ruthless and amoral – tend to rise to the highest positions in any political party, and in any government. This is the phenomenon of “pathocracy”, which I discuss at length in my new book DisConnected."
Jun 11th 2023
EXTRACT: "Although there’s still much we don’t know about flavanols – such as why they have the effect they do on so many aspects of our health – it’s clear from the research we do have that they are very likely beneficial to both memory and heart health."
May 4th 2023
EXTRACT: "My recent book on them 25 Unforgettable French Faces covers a wide range of individuals, from an aging Brigitte Bardot to architect Gustave Eiffel. Both of them changed the face of France. In the upcoming sequel, 25 More Unforgettable French Faces, I have completed my collection of 50 examples. The new book, now in progress, ranges from The Bad Boy of the 18th Century (Voltaire) to A Man of Principle (Jean-Paul Sartre) and Big Dark Eyes, (the actress Audrey Tautou)."
May 4th 2023
EXTRACT: "Silicon solar cells are an established technology for the generation of electricity from the sun. But they take a lot of energy to produce, are rigid and can be fragile. However, a new class of solar cell is matching their performance. And what’s more, it can now be printed out using special inks and wrapped flexibly around uneven surfaces."
Apr 21st 2023
EXTRACT: "You learn from your mistakes. At least, most of us have been told so. But science shows that we often fail to learn from past errors. Instead, we are likely to keep repeating the same mistakes." .... "Sometimes we stick with certain behaviour patterns, and repeat our mistakes because of an “ego effect” that compels us to stick with our existing beliefs. We are likely to selectively choose the information structures and feedback that help us protect our egos." ..... "....there are simpler things we can do. One is to become more comfortable with making mistakes. We might think that this is the wrong attitude towards failures, but it is in fact a more positive way forward."
Mar 17th 2023
EXTRACTS: "The intensifying concentration of wealth, and unjustifiable level of income inequality is proving disastrous in many ways. Here are just a few of them. First, less equal societies typically have more unstable economies, and this country is no exception." --- "Second, there is an incontrovertible link between economic inequality and violent crime. The fact is that rates of violence are higher in more unequal societies." --- "Third, the undeniable fact is that the greater the economic inequality that exists, the worse it is for general health outcomes. What is sometimes overlooked is that income inequality is bad for health outcomes across economic strata, not just for those in poverty. To be sure, poor health and poverty are closely linked; but the epidemiological research shows that high levels of economic inequality “negatively affect the health of even the affluent, mainly because… inequality reduces social cohesion, a dynamic that leads to more stress, fear, and insecurity for everyone.” People live longer in countries with lower levels of inequality, as the World Bank reports. In the United States, for example, “average life expectancy is four years shorter than in some of the most equitable countries.” "
Mar 10th 2023
EDITOR: "Quantum mechanics, the theory which rules the microworld of atoms and particles, certainly has the X factor. Unlike many other areas of physics, it is bizarre and counter-intuitive, which makes it dazzling and intriguing. When the 2022 Nobel prize in physics was awarded to Alain Aspect, John Clauser and Anton Zeilinger for research shedding light on quantum mechanics, it sparked excitement and discussion. But debates about quantum mechanics – be they on chat forums, in the media or in science fiction – can often get muddled thanks to a number of persistent myths and misconceptions. Here are four."