First of all, there is the dream and the will to found a private kingdom, usually, though not necessarily, also a dynasty…Then there is the will to conquer; the impulse to fight, to prove oneself superior to others, to succeed for the sake, not of the fruits of success, but of success itself…Finally there is the joy of creating, of getting things done, or simply of exercising one’s energy and ingenuity. ((Joseph Schumpeter, Theory of Economic Development, 1947, pages 93-94.))
Thus did Joseph Schumpeter describe the spirit of the entrepreneur. These words came to me as I finished reading a new book, Le Deal, by Darden graduate J. Byrne Murphy (D’86). It is a memoire of Murphy’s 15 years working as a real estate developer in Europe. But it is considerably more than a recitation of names, dates, and properties. He captures the enthusiasms and immense challenges of the entrepreneur, particularly one who operates across national borders. “Sheer tenacity” is a phrase that kept coming to mind as I read about the roadblocks he encountered and his responses. The book is witty, ((If you enjoyed Peter Mayle’s A Year in Provence, you will find this similarly entertaining. ))fast-paced, well-written, and loaded with wisdom. Indeed, I think that the story is all about the acquisition of “street smarts.” I commend it to anyone contemplating a career in business, starting a firm, or going global.
The book has a special message for business people right now. The aspirations of Murphy and his partner, both real estate developers in the U.S., were dashed by the recession of 1991-2, a moment of culminating disaster for the commercial real estate industry. Instead of giving up or hunkering down in some safe line of work, they sought to start anew where the competition isn’t: to take their expertise and novel ideas into a region where there was less competition in their specialty than in America. So, they went to Europe. I won’t reveal the rich story, but it does end well.
My point is that financial crises and recessions are as much about new beginnings as dreadful endings. Joseph Schumpeter argued that we need these occasional events to clean out the dead wood in the economy so as to make way for a new generation of growth. It is painful when you find yourself part of Schumpeter’s “dead wood.” But you do have some choice about how to respond.
Tom Stoppard, the playwright, said, “Every exit is an entrance somewhere else.” As I argued in my just-previous posting, the challenge for those victims of the Panic of 2008 is to frame the “somewhere else.” Murphy shows that it can be done.