No Free Lunch: Economics for A Fallen World

9 | P31W: Enter the Entrepreneur!

The Entrepreneur as Problem Solver

The broadest entrepreneurial function is that of a problem solver. We live in a fallen world, and many of us see problems every day. The problem-solving entrepreneur must “see” problems, and her assessment of the problem must be accurate. She must be able to discern the wheat from the chaff, and what is important and critical to the problem and what is simply a distraction. Many of you have had those nasty word problems in math or science class. The teacher gives you all sorts of information and facts, and your challenge is to (1) sort out the problem to find out what is truly the unknown that you must solve for, (2) figure out what equation you could use that might help solve the problem, and (3) identify what the “knowns” are that you might be able to plug into the equation to arrive at a solution. These problems get more difficult when there is more than one equation that might work, and also if there are many extraneous facts; you have to think through whether that fact is needed to solve the problem or if it is just a distraction. If I’m not using that fact, do I really understand the problem? While we may struggle with these questions, the entrepreneur is an expert at sorting out messy problems, and she doesn’t even have it written down in front of her!

One might think that identification of the problem is easy, but the ground is littered with entrepreneurial failures that misidentified the problem—or at the least, they misidentified whether the problem could be solved profitably. In 1985, for example, Coca-Cola tried to force its consumers to go to a new recipe for its flagship soft drink by offering only the new product and discontinuing the old formula. Angry consumers refused to buy the new product, and Coke hastily reintroduced Coke Classic to avoid a total disaster. Eventually, the new Coke disappeared, and Coca-Cola Classic reverted to simply Coca-Cola. Similarly, the bust in the early 2000s saw many “great” ideas evaporate, showing that they did not correctly anticipate the problems that consumers wanted solved (at a price the consumers were willing to pay). For a humorous reprise of one of those failures in light of today’s bailout mentality, watch this short video:

Where's Sock Puppet's Bailout?

Understanding the problem is not always easy; I’m sure some of you have felt that way in math word problems yourself!

Understanding the problem only gets us one-third of the way to success. The entrepreneur must have an idea of how to solve the problem. If the identification of the problem was sufficient, we’d all be rich! I can identify the problem of cars not getting 200 miles per gallon, while simultaneously being able to go 0-60 miles per hour in 3 seconds! Unfortunately, I don’t have a solution. Many entrepreneurs puzzle over problems for years, trying various methods to build a better mousetrap. Some eventually succeed, while others will fail. But one must be able to correctly identify a problem, and then have an idea of how to solve it.

The last step is simply to get off the couch and solve it; it’s time to stop talking and thinking, and start doing! How many of you know people who can think about the world correctly and know the problems going on, but are just daydreamers when it comes to doing? Proverbs 14:23 warns us not to be this way: “In all labor there is profit, but mere talk leads only to poverty.” Nonetheless, many of us fit into this category, at least to some degree. Let’s face it, there are many problems in the world, and none of us can fix them all. But the entrepreneur will have a passion about fixing at least one.

Many problem solvers are “tweakers”; they may not try to solve world hunger, but they want to solve a problem that could make everything just a bit better. Steve Jobs was identified as a tweaker, because in addition to his company’s big ideas, there were also constant innovations to improve a product. For the tweaker, even if the problem isn’t completely solved, it may be more tractable for the next round of creative thinking.

The entrepreneur is different from most people; most of us see problems as problems. The entrepreneur sees problems as opportunities. If there wasn’t a problem, there would be no opportunity to fix it; there would be no opportunity to serve others, and no opportunity to make a fortune. So the next time you see a problem, don’t whine! Fix it—for yourself, and for everyone else.

Next Page: The Entrepreneur as Appraiser »


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