About Public Offering

Contact us:

Subscribe to Public Offering Public Offering RSS Feed

May 02, 2008

Solving the Entrepreneurship Puzzle

Glenn Hubbard
Dean and Russell L. Carson Professor of Finance and Economics
Print this post

The highlight of my year at CBS is teaching Entrepreneurial Finance. I enjoy interacting with students, putting together the cases and bringing in speakers from the entrepreneurial and venture capital communities.

But what I enjoy most as an economist is the opportunity to think deeply about entrepreneurship. To many, entrepreneurship calls to mind the path-breaking motivation envisioned by Schumpeter’s “creative destruction.” But much of entrepreneurship — and much of what we can teach in business school — is more akin to “nondestructive creation,” in which the entrepreneur puts the pieces of a puzzle together in a way others haven’t seen before.

And many examples bring these economic insights to light: CBS ’01 grads John Londono and Zohar Yardeni discussing how they turned listening to corporate calls into a multi-million dollar business. Ben Rosen ’61 recognizing great potential in Lotus. Russ Carson ’67 taking insights from the healthcare industry to transform a modest hospital contract-management business into a major hospital chain, collecting billions of dollars in value.

The combination of a compelling profit model at a disruptive time by the right entrepreneur can be a winning one. This critical feature of entrepreneurship — identifying and capturing opportunity — is teachable, and is integral to the efforts of many faculty members at CBS. Instead of saying “no” whenever an opportunity has problems (as it always does) one can learn to ask: “What can go right? What can go wrong? And how can I tilt the odds toward success?”