Profits or Products?

James Allworth writes an interesting column at the HBR blog network on how Steve Jobs solved the Christensenian “innovator’s dilemma.” The latter is the conception of the innovator’s pure love for his innovation or product, but the (counter-acting) need to deliver it to the market profitably. Without profits, no product. Allworth plays on the popular notion of the necessity for profits as a burden for people and entrepreneurs alike – and turns it on its head.

Interestingly in the case of Steve Jobs, Apple turned profitable through throwing profit-focused product development out the window and instead focusing on heart. And by heart, I mean the love for great products – the focus on developing products one is passionate about, and doing so profitably is secondary.

While this story may seem to be at odds with the common understanding of market logic and perhaps provide a blow at the popular notion of cut-throat capitalism, I see it differently. While it is true that innovators have a passion for their products, this is generally true for entrepreneurs as well – they have a passion for their creation, whether it is a process, a product, an organization, or an imagined opportunity. And what they strive for is to realize this passion and, if possible, make a fortune while doing so. The inner motivation is key, and the pecuniary reward is nice but not the primary driver.

In fact, it is this view of the entrepreneur as a passionate judgmental creator of imaginative new means-ends frameworks that I place at the core of what is, what drives, and what defines a firm. (See e.g. here here or here.) In direct contrast to the popular notion, as played on by Allworth, passion is not the antithesis of profit. Rather, only the passionate entrepreneur can make real entrepreneurial profits, which are only within reach for someone who is willing to risk it all for the sake of his or her passion and the imagined opportunity.

There is no such thing as a routine entrepreneur. Entrepreneurship is revolutionary.

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