Episode: Why Entrepreneurs Matter Now More Than Ever
Michael Hyatt: Hi, I’m Michael Hyatt.
Megan Hyatt Miller: And I’m Megan Hyatt Miller.
Michael: And this is Lead to Win, our weekly podcast where we talk about how to win at work and succeed at life. Today we’re going to be talking about entrepreneurialism, and, Megan, this is kind of fun, because I have a brand-new book called Entrepreneurs Will Save the World. I want to talk about entrepreneurship and why it matters at this particular moment in history.
Megan: I’m super excited to talk about this. This is a passion of both of ours. In the early days of COVID (it’s funny to be able to talk about it like it’s in the past in that way, in the beginning part anyway), we started to see the economic disruption, and we were talking to all of our friends and all of our BusinessAccelerator coaching clients who are entrepreneurs and business owners.
We realized pretty quickly that the economic recovery was going to be dependent on these folks, that if we were going to get out of this, it wasn’t going to be because of the initiatives of the government (although that has arguably been helpful, but not without consequences), but it was going to be on individuals to figure out how to get us out of this mess one business at a time. That message, I think, is really timely and really empowering right now.
Michael: I’m reminded of the movie Dunkirk. In fact, I end the book with this story. In the movie Dunkirk, there is the story of the British army basically being stuck in western Europe, not able to get off the continent and get back to Europe. They’re surrounded by the Nazi forces. They can’t get these big British destroyers and other ships in there to rescue them because the water is too shallow, so Churchill makes this plea for all of the merchant ships, for all of the small ships, to go across the English Channel and, in small groups, basically get these couple hundred thousand soldiers off the mainland back to Britain.
It’s an incredibly inspiring story, but it’s also a fit metaphor for what we’re talking about here. The government probably does have a role to play. Right? I mean, they’ve done some things, but even though they sometimes act like it, it’s not like they have an endless supply of money. They don’t want to tank the company by overinflating the money supply, and that’s why we go back to its entrepreneurs. If the world is going to be saved, it’s going to be entrepreneurs solving it one problem at a time.
Megan: What’s interesting about this is entrepreneurialism has been on the decline for a long time, for decades, actually. It’s interesting, because we’re in a time of great affluence. Up until COVID, so many things have been positive for business owners and entrepreneurs that would encourage them to get into business, yet it’s not happening.
One of my favorite podcasts is a podcast called Conversations with Tyler. The host is Tyler Cowen, who’s an economist at George Mason University. He has a whole theory of complacency as being a reason we’re not having higher growth rates. It’s really fascinating. It’s too complicated to get very far into here today, but I think one of the applicable points is that in a time of great affluence, it’s really hard to motivate people to do big, breakthrough thinking, to start new things, to innovate.
What’s happening right now with COVID is we’re seeing the rates of people starting businesses explode all of a sudden. I think that’s precisely because we are suddenly and violently jarred out of that place of complacency. While that has been painful and costly in so many ways, it’s actually a great thing for innovation and growth.
Michael: That’s a good point. Let’s look at some of the statistics. Here’s the bad news. A lot of small business closures and a drop in entrepreneurship before 2020. The US lost more businesses during the first three months of the crisis than it normally does in an entire year. That’s according to the Wall Street Journal. Before 2020, the share of new start-ups as a percentage of overall businesses had fallen 44 percent since the late 1970s. So, a consistent downward trend in entrepreneurship.
But here’s the good news: the number of entrepreneurs has increased in 2020, as you just referenced. In fact, applications to start new businesses have increased by 15.6 percent, from 2.7 million to 3.2 million, in 2020 compared to the same time the previous year, and that’s all via the census data that came in that Wall Street Journal article. So, it’s a good time for entrepreneurship right now. In fact, let me just quote from that Wall Street Journal article, because I think this is relevant.
“Americans are starting new businesses at the fastest rate in more than a decade, according to government data, seizing on pent-up demand and new opportunities after the pandemic shut down and reshaped the economy.” Part of the issue there is I think we need to go back, Megan, to define what we mean when we talk about entrepreneurs, because we’re not just talking about business owners. This isn’t a role. It’s not a class of businesspeople. This is the argument I make in the book: it’s a mindset.
Megan: I think that’s really important. It would be easy for our listeners right now to say, “Well, I have a traditional nine-to-five job. I’m not an entrepreneur. I work at a corporation. I’m not an entrepreneur.” And that’s not what you think.
Michael: No. That’s not what I think. Certainly, if you think you’re not an entrepreneur, you probably won’t be entrepreneurial, but I’d like to think everybody… Of our 40 employees at Michael Hyatt & Company, I think they’re all entrepreneurial in their own way.
Michael: Here’s how I define being an entrepreneur. Entrepreneurialism is basically the willingness to solve a problem that takes into consideration some risk in the pursuit of some kind of reward. So, solving a problem. That’s number one. That’s the first part of it. In fact, I’ve asked our BusinessAccelerator coaching program clients, “Do we have more problems today than we’ve ever had in at least recent memory, perhaps even in our lives?”
Of course, everybody says, “Yes.” There are problems everywhere. Everywhere you turn, you can’t help but confront a problem. For entrepreneurs, though, they see problems in a different way than non-entrepreneurs. Entrepreneurs see problems as opportunities. So that’s the first thing.
Megan: And this is a big deal. Thinking about problems as opportunities is counterintuitive, and I would say, counterintuitive, solution-based thinking is a real hallmark of entrepreneurialism. That’s a characteristic that is really important to think, and that’s a characteristic that’s really important to grab ahold of and develop within yourself, because it’s incredibly empowering.
All of a sudden, you’re not limited by conventional wisdom or just what you see on the news. There’s a kind of ownership that’s a part of that. You’re kind of taking charge of your life. You’re taking charge of how you see the world. You’re taking charge of how you’re going to act. I think right now, especially, that gives people a sense of control, and what they can come up with is just astonishing.
Michael: It’s true. If you look at any product you use, whatever it is, it was the solution to a problem. It either made the problem cheaper to fix, easier to fix, faster to fix. One of the things entrepreneurs do is eliminate friction. So, whatever the innovation is, whether it’s the automobile or the smartphone or whatever, it was a solution to a problem that somebody perceived. In fact, some of these solutions, we didn’t even know we had a problem until somebody offered the solution.
Megan: Absolutely. I was meeting last week with some app developers who do some really big projects for big corporations and organizations, and they were telling us about a new platform they launched called JUNO. This is a virtual event platform where they can host up to 50,000 people at a live event virtually. All of the links are internal. You don’t have to send people to Zoom, outside of Zoom. It’s all internally hosted so you don’t lose people. It’s amazing how they’ve crafted the experience. They’ve included all of these community aspects, all of these ways you can provide resources in a really slick way.
This product was birthed six months ago at the beginning of COVID when they saw that companies like ours and companies and organizations much, much, much bigger than ours were going to be trying to figure out how to reach their audiences in a virtual way that rivaled what they were able to do in person. It was so impressive to watch them walk us through this product and share what they’ve done.
That’s just a small example, and there are countless examples like that, where they took a problem everyone was frustrated by or about to be frustrated by, and they created an incredible solution.
Michael: Yeah. I love that. Like you said, the examples abound. I went to the gym this morning, and after I showed my ID, you know, they scanned that, then I had to stand in front of (and we’ve been doing this now for months) this really slick camera. It looks like something out of the future. It shows your face, and then it has a ring around it, and you put your face in the ring, and then it immediately reads your temperature. I mean, instantaneously.
Megan: My kids have that at their school.
Megan: Yeah. They do it every day on the way in.
Michael: I don’t know if that existed last year, but somebody saw a problem, and they saw it as an opportunity, so they created that solution. Zoom is another great example, one of the best examples coming out of the pandemic. They were just in the videoconferencing business. There are a lot of people in the videoconferencing business. I think they had something like 12 million users. Now they have hundreds of millions of users.
But they’ve also not just let their program scale. They’ve also changed it. Now you have breakout rooms. You have the ability to hide yourself, which sounds like a small thing, but in a Zoom call, the less data you have to process, the longer you can sustain engagement. That was one of the things they found based on the science, based on their research, that would help people avoid or minimize Zoom fatigue. Again, there was a problem. Somebody decided to solve it. That spelled opportunity.
That kind of brings us to the next part of the definition. That is, there’s usually some risk involved. Maybe it’s the risk of capital. It’s certainly the risk of investment of time, but then there’s also the reward. The most obvious one, if you’re thinking of an entrepreneur not as a mindset but as sort of a traditional role, is the reward is financial. “I’m going to risk this thing in the hopes that I can make some money.” By the way, there’s nothing wrong with that. That’s a good thing.
Megan: You know what I was thinking of, actually, that’s really great about innovation, and one of the reasons we should all be pursuing it, is that it creates opportunity for other people. Right now, we’re in the middle of hiring several positions. We’ll probably hire seven positions in total before the end of the year, because we’ve actually increased our forecast. We’re aggressively pursuing some new initiatives. We need additional staff in order to do that.
What’s amazing about that… You know, we’re a relatively small company, but that means seven more jobs for people who may have lost their job during the pandemic, who may have the opportunity to move into a better job than the one they’re in right now. If you think about that, while we’re not a very big company compared to the massive corporations that are out there, we don’t need to be.
If you just multiply this times all of the companies out there, the people who are on the front end of this, who are leaning in, who are figuring out innovative solutions, have the opportunity not only to create a reward for themselves, but this reward enables them to create more opportunity for other people, which is why the title of this book is Entrepreneurs Will Save the World. When you pursue something yourself, it necessarily involves a team and, therefore, opportunity for more people than just you.
Michael: And just to add to that, kind of a third level… You know, the first level there’s a reward for the person who solves the problem. If they work for somebody else, it may lead to a promotion or it may lead to a pay increase. There’s that kind of aspect. Or maybe simply the satisfaction from doing it or the esteem that comes from doing it. So, there’s the personal part of it. As you pointed out correctly, there’s the reward for the customers or the clients or the people who benefit directly, but then there’s sort of the third level of the reward, an indirect reward that society experiences overall.
You’ve heard it said that a rising tide raises all ships, and it’s true. But in addition to that, you think of the tax base. You know, we pay taxes. The people we hire pay taxes. As they have more money and can spend it on more stuff, that generates additional tax revenue. So, entrepreneurs contribute to the collective good, and this is why I object to the idea that entrepreneurs should give back. Now, here’s what I’m not saying. I think everybody should be as generous as they possibly can be.
I take great delight in the philanthropic and charitable causes I’m involved in, everything from building schools in Africa to helping support education…whatever it is, whatever gets you excited and you contribute to. But I object to the idea that it has to be done as a matter of obligation as though, as an entrepreneur, I extracted something from the environment and now I have to give it back. No. This is not a zero-sum game.
Entrepreneurs create value. We talked about three ways in which they create value. Just by hiring people, keeping people employed… We didn’t lay off a single person during the pandemic. That’s a public good. The fact that all of these people pay taxes is a public good. That’s a contribution. Now, if you want to appeal to me to contribute just because this is a worthy cause, great. I’m all in. I’m all ears. But I think this notion of “We’ve got to give back” is misdirected.
Megan: It is misdirected. I think it’s problematic, because, first of all, we’re paying taxes, and then we’re creating opportunity for other people, which impacts those families. One of the greatest joys I have as an employer (and this is a funny, kind of small thing) is providing excellent health insurance to our employees. We have killer health insurance. I know that, for a lot of people, that’s a real struggle.
Every time we hire somebody, I get really excited about what I know that’s going to mean for their family. When you think about the people we employ and the fact that they have the opportunity to have a high level of wellness in all parts of their lives, that’s a big deal. That’s not something to be taken lightly. Not the least of which would be the contribution financially, as we’re paying competitively and all that kind of stuff…really, beyond competitively.
That just gets me excited, because what I see are people doing exciting things in their lives. You know, they’re buying houses. They’re sending their kids to great schools. They’re in better health than they were when they started. That’s all really rewarding, and that’s some of the stuff we’re talking about when we’re talking about the impact of entrepreneurs. You can do many of those things regardless of whether you’re the business owner or not.
Michael: That’s exactly right. So, let’s talk about some of the reasons we’re so confident that entrepreneurs are going to get us out of this mess we’re in. By the way…I think both of us would agree on this…this is not an overnight fix. This is going to be a while digging out. I don’t know if it’s going to be several months or several years, but we have to dig out of this.
I’ve been hopeful about the fact that unemployment has… Those numbers have gone back down, which is good. Maybe you could argue not as fast as they should, but given the shutdown and everything else, I think the rebound on that has been encouraging. The trick is (and this is the needle that government and public health officials have to thread) is sort of this dance between opening the economy and also keeping people safe.
Megan: Right. It’s tough. Okay. The first reason is that entrepreneurs are focused on solutions. This kind of gets to the idea of resilience. We’ve talked a lot about resilience lately. A lot of people are talking about resilience because it’s maybe our biggest superpower going through this pandemic and the fallout surrounding it. You’ll hear a lot of people…maybe people you work with, maybe neighbors, people on Facebook…spending a lot of time talking about what’s wrong.
It’s not hard to find what’s wrong because there’s a lot that’s wrong. I think the problem with that, after a while… Certainly, we have to process our emotions, and all that’s important. There really are significant challenges here. But the problem is it’s totally disempowering. We have to ask ourselves: Are we going to adopt a victim mentality for what looks like it could be as much as a two-year period of time?
A lot of people are saying this won’t be gone until later next year. Who knows? We’ll have to wait until we get there to find out how it all worked out. I, for one, feel like that’s a huge loss…a loss of creativity, a loss of innovation, a loss of taking control of the things you can. Entrepreneurs, whether in their mindset or their professional role, are people who are focused on solutions. When they see problems, they start thinking about solutions instead of thinking about why things can’t work.
Michael: This is the other reason it’s helpful that entrepreneurs are pursuing these solutions. The government tends to deal with us en masse. There are only a certain number of problems they can deal with, and they’re not dealing with the granular problems that all of us are dealing with in our day-to-day lives. They just can’t.
That’s the great thing about entrepreneurs. They can see specific problems in their local community that affect a specific number of people or kind of person they feel called to serve; therefore, you sort of get this crazy benefit of what happens through disorganized but interested parties trying to solve problems at scale.
Megan: Absolutely. We should stop and say for a second that entrepreneurs…again, whether they’re in mindset or their particular professional role…don’t have to be just in the for-profit section of business and organizations. They don’t have to be in the for-profit sector. They can be in the nonprofit sector.
I think about what church leaders are having to do right now, what nonprofit leaders are having to do right now, the kinds of problems they’re solving through schools…all kinds of organizations that are serving people in different ways. The people who are doing it the best are doing it with an entrepreneurial mindset. They’re seeing problems and immediately thinking about solutions, regardless of their context, and it’s really inspiring.
Michael: I think this is a little bit of a test here when it comes to this mindset. When somebody comes to you with a problem, what’s your first thought? Maybe not your first one. We need to all give ourselves permission to kind of groan or sigh when we hear about a problem, but (and this is where the resilience comes in) I think people with an entrepreneurial mindset… And if you’re listening to this, you can test yourself this way. Do you eventually get to the place where you start fantasizing about a way to solve that problem and begin to see it as an opportunity?
Megan: Probably a lot of us at this point are thinking, “Sheesh! How much longer do I have to do this resilience thing? I’m worn out with all the pivoting. I’m worn out with all the needing to come up with solutions.” Here’s the good news, though. We get better at this with practice. It’s like a muscle we develop.
On the one hand, certainly there can be fatigue and exhaustion and we have to figure out how to deal with that mentally and emotionally, but the good news is that, over time, we really do get better at this. We get stronger. It comes more easily to us. I think that should give us all hope. I mean, good grief. By the end of this, we’re going to be some kind of superheroes, I think.
Michael: I can remember going through the Great Recession and thinking to myself, “Man! I’ve now gone through this once-in-a-lifetime, every hundred years kind of issue, so I’ll never have to face this again.” It was hard. I’m telling you, it was really hard, but our business, the business I was running at the time, did extremely well. It accelerated some decisions we should have made before the Great Recession, so there was a lot of good that came out of it.
To be honest, there were some bad things too. Obviously, we had to lay off some people. Even in this pandemic today, there are bad things that are happening. No question about that. We don’t need to minimize that. But the thing I noticed, just to your point of “We get better at this,” when it came to the pandemic, when that hit, I was a little bit surprised. It didn’t rattle me. I didn’t worry about it. I didn’t stay up at night, like I did in the Great Recession when I couldn’t sleep. I slept every night. That’s not because I’m superhuman. It’s just practice.
Megan: Right. Well, it’s good that we can practice and get better, because I think we’re going to need that. All right. Let’s move on to the second reason we feel confident that entrepreneurs are going to get us out of this mess: entrepreneurs are endlessly resourceful. I have to tell you a cool story I heard. I think it was last week, actually. I was listening to a Brené Brown podcast with the author of that book Stretch. I have not read that book, but I know we included it in LeaderBooks, our membership program around reading leadership and productivity books, a couple of years ago, I think.
They were talking about how to think about resources and the difference in how you think about resources when you have a lot of resources and how you think about them when you don’t. The author was telling the story of… You know, if you give resources to someone who has a lot of resources, it’s very difficult for them to think outside of the literal application of that resource.
If you think about having a hammer and you have a lot of hammers and a lot of nails, all you think is that thing can drive a nail, but if you’re someone who doesn’t really have many resources at all, you start thinking of all different things you could do with that hammer. You start thinking about you could use it to prop something open. You could use it to pick something up. You could use it to pull something out.
There are all kinds of ways you could attack a problem with a certain kind of instrument. I think that’s kind of what we’re talking about here. When you have an entrepreneurial mindset, all of a sudden, the resources you have available to you get used in unconventional ways, in ways that expand their capacity or their impact, and you’re not limited in the same way you are when you see things in a very simple, literal way.
Michael: That’s really good. I was thinking about an example I used in my previous book, The Vision Driven Leader, where I talk about the Wright brothers. The US government saw that if they could create manned flight, it would be a huge military advantage, not to speak of the commercial advantage of people being able to travel faster, so they actually funded several different groups to invent manned flight.
They came to believe it was possible. They funded a number of organizations. They gave hundreds of thousands of dollars, which at the time was a lot of money, to different organizations to figure this out. Well, the Wright brothers took none of that money, and these were two guys who didn’t have a college education. I’m not even sure they finished high school. I can’t remember. At any rate, they were basically guys who owned a bicycle shop, and they decided to start fooling around, solving the problem, and ended up creating manned flight, which is such a great story of resourcefulness.
They didn’t have all the money the other groups did, and the groups that had the money were not able to develop manned flight as fast as the Wright brothers did. It just goes to show you that resources… And we’ve all been in this position where we’ve said, “Gosh! If I just had more money” or “If I just had more time” or “If I just had better contacts, if I had another resource, I could succeed.”
I’m looking at this book Stretch on Amazon. The subtitle is Unlock the Power of Less and Achieve More Than You Ever Imagined. That’s another mindset shift. In fact, it’s one of the eight mindsets that make up the entrepreneurial mindset that I talk about in the book. Resourcefulness is something that has to be cultivated. Listen to me. This is important. You have to see lack of resources as a benefit, not an obstacle.
Megan: What happens usually when you have constraints… We have talked about this. We’re going to continue to talk about it because it’s such a relevant idea right now. Constraints drive innovation. When you have greater constraints… Sometimes the more extreme the better. That’s when you get some incredible breakthrough that you never would have had access to except that the constraints were so ridiculous you had to think things you’ve never thought before, and Boom! There’s a solution that shows up that would never have been something you could have grabbed ahold of previously.
Really, constraints are our friends. Once you start seeing that and adopting that as a way of being, you become so much more resourceful, you spend a lot less time being frustrated by your lack of resources, and you use the resources you have in unconventional ways that produce a huge impact.
Michael: In fact, we did an entire episode just recently on Lead to Win about the power of constraints, and I would encourage you guys to listen to that. We’ll link to it in the show notes. Okay. Let’s go on to the third reason. First one: entrepreneurs are focused on solutions. Second one: entrepreneurs are endlessly resourceful because of their mindset. Finally, entrepreneurs are all of us. I love this quote from Ludwig von Mises, an economist, who said, “In any real and living economy, every actor is always an entrepreneur…”
Megan: That’s such a great quote.
Michael: As we’ve said as we’ve gone through this episode, you need to start thinking of yourself as an entrepreneur if you’re truly going to be a contributing member of society. You don’t have to start a business. You don’t have to be a founder. You don’t have to be CEO. You can just be anybody at any level of the organization in any kind of organization…for-profit, nonprofit, education, military. Just decide you’re going to embrace problems as opportunities, you’re going to see a lack of resources as a benefit, and you’re going to work toward this reward we talked about earlier, this threefold reward for yourself, for the people you’re serving, and for society at large.
Megan: To me, when I think of entrepreneurs being all of us, I think of people who take ownership. When I think about our own company and the entrepreneurial spirit we have within Michael Hyatt & Company… One of our core values is total ownership, and I think total ownership is probably the thing that’s driving that entrepreneurial spirit with every person on our team.
It’s the idea that the results I’m getting in my work are the direct result of my leadership, even if I’m not a leader in the traditional sense. That’s a really empowering place to be. It’s also a place of accountability. It’s a place of holding your own feet to the fire in terms of “It’s on me to solve this problem,” as we were talking about seeing problems as an invitation to come up with solutions.
When people take ownership, that’s what they’re automatically going to be thinking of. “This is not someone else’s job. This is my job to figure out this problem. What if I could figure out this problem? What would that mean for me? What would it mean for the people I’m serving? What would it mean for the company I’m working in or the organization I’m a part of?” That’s really exciting.
I think it also does something that, if you are a leader, you may have a tendency to minimize; that is, it gives meaning and purpose to your team. What it means is that every single person on your team can contribute in a meaningful way to the work you’re doing and to the people you’re serving, and no person’s role is too small to make a significant contribution.
I mean, you never know where the best solutions are going to come from. It might come from a totally out of left field department or position. If you can set that up that everybody has a voice, everybody has an opportunity to contribute, you will get the best contribution out of your team and people will stay with you, they’ll grow with you, and they’ll really lean in and give you their best thinking.
Michael: Okay. We’ve been talking about three reasons that we’re confident entrepreneurs are going to get us out of this mess. By the way, this is the reason I’m optimistic. This is the reason I have confidence. I think this is going to lead to so many breakthroughs. I don’t want to go back to normal. The new normal, once we get to it, is going to be so much better, because this is what happens every time. I think there were enormous benefits that came as a result of the Great Recession. Again, certain tragedies, certain hard things, but in many cases, in most cases, it led to good results, and I think this will as well.
Megan: Well, Dad, I agree with that 100 percent. I think this is such an empowering message, so exciting. For those of you listening, I want to encourage you. If you’ve enjoyed this episode, you have to get this book, and not just for you, but for your team, for your friends, for your fellow entrepreneurs in spirit or in work. You need this book. This is going to empower you and make you feel excited again about the future. That’s our intention with it. All you have to do is go to entrepreneurswillsavetheworld.com. You can find out all about the book and where you can get your copy.
Michael: Okay, guys. Thanks for listening, and we’ll see you right here next week. Until then, lead to win.