What and How to Expect
5. PATHS OF TECHNOLOGY ENTREPRENEURSHIP ENTREPRENEURSHIP
Paths are made by walking.
Franz Kafka
Wege entstehen dadurch, dass man sie geht.
By relying on General Systems Theory (GST) for technology entrepreneurship we are ultimately led to the question of the relation of founding and developing a technology venture and Systems Design or its partial revival in terms of Systems Thinking. In the context of GST the notion “design” is a process, an action, a verb not a noun. It is a protocol for solving problems and revealing new opportunities.
Systems Design can be seen as a methodology of change which proceeds essentially from the system outward, understanding the system and its relation to all other sys- tems larger than it or interfacing with it (ch. 1.2.1).
In our context of Systems Design [Van Gigch 1974:2] there is currently in the US a new wave (and probably hype) with Design Thinking [Dziersk 2008; Wong 2009a, 2009b] which we shall critically consider for the framework of Systems Design.
In our context, apart from chance detection or serendipity, we have differentiated re- cognizing, identifying and discovering opportunities and ideas as different processes (ch. 3.2; Figure I.87).
As cited by Dziersk [2008] Herbert Simon, in the “Sciences of the Artificial” (MIT Press, 1969), has defined “design” as the “transformation of existing conditions into preferred ones” (p. 55). Design Thinking is, then, always linked to an “improved”
future. Unlike critical thinking, which is a process of analysis and is associated with the
“breaking down” of ideas, Design Thinking is a creative process based around the
“building up” of ideas. Herbert Simon describes Systems Design by a seven steps pro- cess: Define, Research, Ideate, Prototype, Choose, Implement and Learn.
Designed systems necessarily always include the goal of the designer as the main driving instance. Corresponding artifacts are built as purposeful systems since the specification requires the dualism of a priori defining the components and their inter- actional relationship with the “environment” before the entire system starts to work.
Systems Design for entrepreneurship focuses on establishing a relation of value creation between a new firm and its founders or owners, respectively, and its mar- ket(s) and customers as part of an all-embedding environment. Design will depend largely on constraints.
For the establishment of the relation there is a corollary:
Go fast to market to learn about the market and as Kersting [2012] put it, “you don’t know the market until the market knows you.”
Systems Design is a creative process which for specific situations may be subjected to formalization. It means initiate and implement change in or through man-made things or entities which includes totally new things or entities. The focus is the problem at hand and the manner in which problem-solving options are considered, ideas are created and refined and selections are executed (Figure I.80, Figure I.87).
In our context we shall not consider design generally as a prescribed process. It is not consistently a rational process. It may begin with the identification and analysis of a problem or need and proceeds through a structured sequence in which information is researched and ideas explored and evaluated until the “optimum” or satisficing solu- tion to the problem or need is devised.
In the context of social systems and entrepreneurship Systems Design is a future- oriented, partly disciplined inquiry. People engage in this inquiry in order to design a system that realizes their vision of the future, their own expectations, and the expecta- tions of achieving them.
The future environment of the system has to be forecasted! If the design of the system has been set and is established, “systems improvement “refers to the process of en- suring that a system, or systems, perform according to expectations (ch. 1.2.1, ch.
3.2.1). Systems Design firms stand apart in their intention and willingness to cross the chasm to engage in and execute continuously re-designing their business. They do so with an eye to creating advances in both innovation and efficiency.
The result of Systems Design has to pass the test of personal commitment – it requires conviction.
One question to be dealt with is how Systems Design and Systems Thinking affect foundation of new technology-based firms and interconnection of today’s decisions and actions with past and future contextual factors. For the reasoning process under- lying design one should be aware of whether following a line of “reasons why” versus
“reasons for thinking that” (Figure I.2).
Systems Thinking will include past and future and that determines behavior in the present.
Past Present (“Today”) Future
Analytic (Explain) Context Synthetic (Build))
Experiences, Perception
Imagination, Perceptiveness
Observations, Patterns Opportunities, Possibilities
Extrapolations, Strategy Trends, Stories
Achievements, Certainty Expectations, Uncertainty
Systems Design questions assumptions on which old forms have been built or com- mon or “standardized” recommendations on which new forms (“startups) have to be built. Correspondingly, the role of a system’s leader is to influence trends rather than satisfying trends [Van Gigch 1974:9]. Intuition-oriented firms wax and wane with indi- vidual leaders.
In essence, Systems Design for value creation in terms of innovation or entrepreneur- ship requires bringing together two prevailing points of view on business today, ana- lytically structured processes and intuitive originality.
Using GST means that instead of relying exclusively on analysis and deduction deeply ingrained into Western thinking we proceed also with synthesizing and being inductive (ch. APPROACH). Design Thinking means intuitive thinking – the art of subjectively knowing without reasoning and “strategy logics” (ch. 1.2.2, 2.1.2; Table I.33) being subjective logics. It relates to perceptiveness, a feeling of understanding.
According to mainstream approaches business organizations are dominated by ana- lytical thinking. Strategy is based on rigorous, quantitative analysis. In this model ana- lytical thinking harnesses the familiar Western forms of logic, deductive reasoning, to declare truths, facts and certainties about the (business) world. This model means mastery through formalized, continuously repeatable analytical processes. Judgment, bias and variation are the enemies. However, by sticking closely to the tried and true, organizations dominated by analytical thinking enjoy one very important advantage:
they can build size and scale.
To summarize, neither rational reasoning nor intuition alone is enough. Using Systems Design and Design Thinking for entrepreneurship do not try to reconcile the two modes throughout the foundation of a new technology venture and its first dozen years of development. Both approaches will have different levels of significance for the various stages of firm development putting more emphasis on “designed” pre- start, foundation and early growth phases as illustrated in Figure I.1, but addressing particular sub-processes like financing in a rational and analytical manner.
As has been discussed (ch. 2.1.2.3) prevalence of one over the other mode of thought may be related to culture conditioned by higher education, in particular, for technology entrepreneurship by scientists versus engineers (Figure I.62) or scientists versus people for economics or business administration.
Engineers and application-oriented natural scientists tend to prefer rational, analytical thinking; they are “doers” (exception: software developers). They are used to plan, im- plement and execute “experiments” (or preparations) and measure outcomes. They are used to look for “recipes” and instructions and examples of how to do the experi- mental setups and what may go wrong. Hence, they appreciate “recipes” for founding and running a firm. And, therefore, writing a business plan matches often their educa- tion and culture.