The app for independent voices
Baumol has a classic 1990 paper, Entrepreneurship: Productive, Unproductive, and Destructive (attached) on how entrepreneurs are a context-specific manifestation of a more general archetype that can be good/bad for society depending on incentives.
Abstract:
“The basic hypothesis is that, while the total supply of entrepreneurs varies among societies, the productive contribution of the society's entrepreneurial activities varies much more because of their allocation between productive activities such as innovation and largely unproductive activities such as rent seeking or organized crime. This allocation is heavily influenced by the relative payoffs society offers to such activities. This implies that policy can influence the allocation of entrepreneurship more effectively than it can influence its supply. Historical evidence from ancient Rome, early China, and the Middle Ages and Renaissance in Europe is used to investigate the hypothesis.”
I found this paper circa 2015 but discovered the point independently myself around 2012, and have a fun Myers-Briggs story about it.
The attached slides are from a 2012 talk I did at USC, applying MB and other frames to Silicon Valley culture. At the time I was on the fringes of it, casing the joint and figuring out a way in, having just moved west from DC. I was nerding out over MB at the time, and had a bigger MB nerd friend make a chart of SV-MB archetypes for me, which I paired with a satirical archetype chart I found online. My point in the talk was that SV culture obviously had a light and dark side to it. For example, the good ENTJ (hustler) can flip to the bad ENTJ (evil overlord) with an environment shift. This is Baumol’s point made psychographically.
I got an illustrated live example a few years later. I had a passing consulting encounter with an org (which I won’t name) led by 2 guys in their mid 30s, with a troop of enthralled young guys in their early 20s staffing it (at ~40 I was older than all of them). One of the leaders also happened to be an MB nerd and he made an interesting remark — “I’m an ENTJ and all the INTJs follow me around and [cofounder guy] is an ESTJ and all the ISTJs follow him around.” Translation: All the Hackers were following the Hustler around and all the Org-Man kids were following the Player around. It’s a first order approximation of course, but the org was full of a fairly narrow range of ~4 types with stereotypical relationships. They were all Ts. No Fs in sight.
The org fell apart shortly after my encounter and there was talk of how it had screwed people over (I never verified the whole story but it’s the only time I’ve ever had to write off an unpaid consulting invoice in 15 years). This is not an aberration. It is in fact the typical story in tech because most startups and entrepreneurial orgs of any sort fail, and the character arcs of the protagonists traverse the full cycle from light to dark, hero to heel. “Entrepreneurs breaking bad” is not the exception, it is the rule. Ask any SV veteran of failed startups and backstabbing endgame dramas. It’s one reason I stayed a consultant. Despite my “slightly evil” shtick and “sociopath” consulting theories, I’m literally too nice for the startup game.
If you flip to the dark side pattern, my anecdote would be about Contractors following Evil Overlord around and Thought Police following Conman around. This particular org fell apart before it could flip to the dark side (typical), but many spend a long time in dark mode before failing.
These archetypes don’t just have context-specific expressions, but patterns of association that flip consistently and persist across contexts.
You don’t have to buy into Myers-Briggs to buy this theory. You can stick to the loose empirical model of Baumol. But I think the MBTI model of this phenomenology has real legs.
Most startups fail, so you can imagine what the typical SV experience is. Not glorious one-shot rides to success, but repeated iterations of this light/dark flipping cycle punctuated by a minority experiencing the rare breakout success.
