The Great Man Theory of Entrepreneurship

“The history of the world is but the biography of great men.” — Thomas Carlyle

Why is the world the way it is today? Why does America dominate the international political landscape, and not, say, Tanzania? Why did Christianity become the most popular religion in the world and not Buddhism? For all of human history we have attempted to keep a record of the events of our past, but we are also constantly attempting to explain why things turned out in just the way that they did.

In the 19th Century, Thomas Carlyle proposed a theory claiming, as the quote above suggests, that it is the actions of a handful of 'great men' throughout history who have determined how things ended up. They were born possessing certain traits that allowed them rise above their fellows and become great leaders. This enabled them to become the notable leaders, thinkers and explorers whose lives and decisions have had an enormous and lasting impact on the world that changed the course of history.

On this view, the outcome of the second world war could be explained by the fact that Churchill was an inspiring speech writer, a savvy politician and a brilliant tactician. His wisdom and intelligence allowed him to see further and more clearly than his contemporaries. His sheer force of will enabled him to drive forward the Allied cause and secure victory in Europe. Or so the argument might go.

These days, the Great Man Theory of history is not taken very seriously by professional historians. There is a greater recognition that all men (and women) are the product of the societies and circumstances they were born in to. It may be true that Churchill was a great man, and a great leader, but he was not inherently so. There is no reason to believe that he was born with gifts and talents that made his rise to prominence inevitable.

Plus, history is simply a lot more messy than Carlyle believed. There were hundreds of factors that were all outside of any one person's control, but which are no less important to determining the outcome. For instance developments in technology (e.g. Radar, the Atom Bomb), economic power (e.g. America joining the war) and natural factors (e.g. Russian winters) are all vital parts of the story to explaining what happened.

To say that history is mostly shaped and explained by individual people is to miss huge parts of the puzzle. There is no doubt that great leaders have existed throughout history, but they can only act in the world as they find it and take opportunities as they appear - neither of which are something any one person can control.

The Great Man Theory of Entrepreneurship

It is quite easy to make a similar mistake when it comes thinking about the success of companies. Why is Apple the most valuable company in the world?

If you believed in a 'Great Man Theory of Entrepreneurship', you would believe that it is almost entirely due to the Great Men who were involved - Steve Jobs and so on. On this view, successful companies become successful because they are started by notable individuals who were born with the natural talents and brilliant minds that inevitably bring great success.

They work harder, think more creatively and take more crazy risks than your average joe. They probably flirt with the grey areas of the law, and generally aren't afraid to do whatever it takes to succeed. This is the stereotype of an entrepreneur that many people still take for granted.

Of course, just as in history, the Great Man theory of entrepreneurship is not true.

To be clear, denying the Great Man Theory does not mean claiming that there have been no great historical leaders, or that these people don't deserve credit for the roles they played. Jobs was a great leader and Apple simply would not have become the success it was without him. But he was only one factor among many, and we should be careful not to explain Apple's success simply by pointing at Steve Jobs and saying, "There you have it!"

Consider some of the things that had to be the case in order for Apple to now be the most valuable company in the world:

  • Microsoft wins the PC wars and Apple nearly goes bankrupt. Without the competition of desktop computers to focus their attention, Apple and Jobs were free to innovate with the iPhone which is arguably the most influential and profitable product of all time. Microsoft, on the other hand, is barely making an impact in the smartphone market today.
  • Steve Jobs was born in the geographical region that would shortly afterwards become the global epicentre of a technology revolution. If Silicon Valley was based in New York, or a suburb of Moscow, does Steve Jobs' Apple become the most valuable company in the world? There is a whole book's worth of factors to explain why San Francisco became the most famous tech hub in the world.
  • Around the time that the iPod was first launched, music labels were so terrified of online music piracy that they agreed to massive concessions during the negotiations to have music in the iTunes store.

The world is a complex place, and everyone is born into a certain situation and is given opportunities they can't control. A great leader seizes those opportunities when they can, and works hard to achieve their goals, but it is clearly wrong to believe in a 'Great Man Theory'. He was just one factor in an extremely complex cocktail.