4 Economic Thinkers Every Tech Entrepreneur Should Read
If history teaches us anything, it is that great ideas and great thinkers transcend time. For this reason, we wisely read the classics throughout grade school -- even if against our will at times -- and study how philosophy and history has shaped our world.
One particular area of philosophy, economic thought, has inspired entrepreneurs for years. The thinking of great economic thinkers has driven innovation in the industrial age and continues to influence the field of tech philosophy, forging the way systems interact and successful institutions rise to power.
Monika Kochhar, co-founder of SmartGift, which pioneered product level e-gifting, and co-author of This is a Gift: An E-Commerce Manager’s Guide to Gifting, is a trained economist and technologist whose love of philosophy and inquiry has helped her find entrepreneurial success. Even before her entrepreneurial endeavors, she leveraged great philosophical teachings as an advisor to ecommerce startups and as a trader on Wall Street, spending a decade trading tech and telecom and structuring and marketing investments in emerging markets.
From the ancients to the postmodern, here are four philosophers that Kochhar believes every tech entrepreneur should know.
1. Karl Popper: Trial and error
Popper is regarded as one of the greatest philosophers of science in the 20th century. His philosophical ideas promoted creativity, starting with the concept that knowledge grows through trial and error and conjecture, as well as regularly proving things wrong. It forms the basis of experimentation and the skeleton of the data-driven approach that has become the holy grail of innovative technology companies.
2. Friedrich Hayek: Spontaneous order
The spontaneous appearance of order out of seeming chaos was made a centerpiece in the social and economic thought of Hayek, who used this idea to describe everything from free market prices to language development and crystal structures to the Internet and social networks.
Hayek believed that uncultivated ecosystems, such as today’s social media sites, generate an order around them with a watch-like precision as self-interested individuals come together without any planning. It is an organic social manifestation that tech entrepreneurs would do well to understand.
3. Joseph Schumpeter: Creative destruction
Schumpeter is most commonly associated with the term creative destruction, which he employed to describe economic innovation and technology. He theorized that "the process of industrial mutation incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."
In other words, technology is really a cycle of life and death and reincarnation of old ideas into their contemporary correlates that are better adapted to our new world order. The technology world marches entirely to this idea, as incumbents are always around the corner and new ideas are and will continue to replace older ideas.
4. Daniel Kahneman: Power of the unconscious
Modernist Kahneman won the Nobel prize for his breakthrough contribution to the psychology of judgment and decision-making, which fundamentally changed the way we think about thinking.
Kahneman divided our thinking into a dual process system. He demonstrated that most of our decision-making is done through immediate, associative and unconscious thinking, what he called "System 1." He argues, however, that we should be using more slow and deliberative thinking, or "System 2," which forces us to make better decisions through conscious considerations, assessment and problem analysis.
To think more deliberately, Kahneman suggests we needed create deliberative habits. In other words, we have to consciously learn to think consciously. His work is currently being applied in behavioral finance, but it also paves the way for an entirely new school of thought when it comes to user design and user experience in technology products.
There is no shortage of reading content for entrepreneurs. Without a doubt, however, the biggest bang for your time will come from reading the teachings of great philosophers throughout history. So if you can get over the grade school stigma of doing so, you just might find the inspiration you need to keep you motivated.
What other philosophers do you read and apply to your business? Please share your recommendations with other entrepreneurs in the comments section below.