In the 1950s, Austrian economist Joseph Schumpeter coined the term Creative Destruction:
a process of industrial mutation
that continuously revolutionizes
the economic structure from within,
incessantly destroying the old one,
incessantly creating a new one
Creative destruction is the lifeblood of capitalism. Embracing creative destruction is a survival skill for entrepreneurs. Companies literally die when entrepreneurs fail to embrace it.
I can’t tell you how many times I heard, ‘we should take a first principles approach’ when I was at Palantir. I learned a lot – both when a first principles approach makes sense and equally, when it doesn’t. Taking this approach necessitates an embrace of creative destruction and entrepreneurial firms need a healthy dose of it.
When you become an entrepreneur, one of the first things you learn is to embrace creative destruction. Startups are forced to adapt to real time feedback from their decisions, because resources are scarce and the cost of change is relatively low. Conversely, large companies fail to embrace creative destruction irrespective how much they study it, because resources are aplenty, and the cost of change is high in the short term.
The US of A needs a first principles approach at the moment. We need creative destruction and whether we want it or not, it’s here now. The one silver lining of the Trump presidency is that it’s laid bare the unsustainability of our current system.
This pandemic will cause some painful but necessary creative destruction. While the effects on vulnerable individuals and families will be challenging, it’s a necessary consequence of rebuilding our communities.
Entrepreneurship must lie at the core of both communities and regaining control over our country and its fortunes. Small businesses help spread economic gains. Entrepreneurs ensure competition. Small businesses collaborate with partners and communities. Support the small businesses in your community. Start businesses in your community. Let us help you initiate and drive the creative destruction our communities need in order to rebuild.
September is a strange marker in the US. It starts with the Labor Day long weekend to end the summer with. And yet, it marks the beginning of an onslaught of creative destruction.
One barometer of whether we embrace creative destruction or not will be what we want as individuals and a country this Presidential election. With just 2 months to go till the election, PLEASE make sure you are registered and planning to vote. It doesn’t matter who you vote for but it is of paramount importance that you DO VOTE.
Uncertainty is certain this fall. Let’s make the creative destruction worth it.
If you like this article, check out our podcast episodes: Becky Zeijdel-Paz – Putting Sustainability at the Center and Hashem Montasser – Build Your Passion Project