Entrepreneurs Transform Entire Industries, Including Education

Disruptive innovation in K–12 education.

The cover of Kerry McDonald’s new book, “Joyful Learning: How to Find Freedom, Happiness, and Success Beyond Conventional Schooling.” Yorel Ktech/FEE

The following is an adapted excerpt from FEE senior fellow Kerry McDonald’s new book, “Joyful Learning: How to Find Freedom, Happiness, and Success Beyond Conventional Schooling,” which is available now wherever books are sold. It is reprinted here with permission from the publisher.

When we hear the word entrepreneur, many of us think of Silicon Valley stars such as Steve Jobs, Mark Zuckerberg, Peter Thiel, Bill Gates, Jeff Bezos, and others who have created sprawling, successful companies whose products and services seep into our everyday lives. These entrepreneurs may be household names, but they are more the exception than the rule. Everyday entrepreneurs—the ordinary people launching and leading small businesses—form the backbone of the U.S. economy. According to the U.S. Small Business Administration, small businesses account for more than 99.9 percent of all U.S. companies, employing more than 60 million people. A typical entrepreneur, defined by Merriam‑Webster as “one who organizes, manages, and assumes the risks of a business or enterprise,” is more like a microschool founder than a Microsoft founder.

The education entrepreneurs I interviewed for my new book, “Joyful Learning: How to Find Freedom, Happiness, and Success Beyond Conventional Schooling,” are incredibly diverse, but there are several common qualities shared by most of them. They are eager for a challenge and are confident that they can overcome inevitable setbacks. They like to take initiative and are comfortable with unpredictability. They are critical thinkers, questioning the way things are typically done in education and wondering about new approaches. Today’s school founders like to learn and do new things, and often have a low threshold for boredom. They work well under pressure and are good at building relationships and collaborating with others. Finally, the founders I spotlight are optimists. They believe that education can be changed for the better and that they can be a successful part of that change.

The word “entrepreneur” comes from the French “entreprendre,” meaning “to undertake.” It is largely believed to have originated with the French‑Irish economist Richard Cantillon, who used the word in his 18th‑century writings; but it was the 19th‑century French economist Jean‑Baptiste Say who elaborated on its meaning, connecting it more closely to our modern understanding of entrepreneurs and their important role in a productive economy.

I reached out to Richard Salsman, assistant professor of political science at Duke University, who coined the term Saysian economics in 2003 to fully capture Say’s economic philosophy, including his recognition of the central role of entrepreneurs. “Say developed the idea that the labor force and the resources of production have to be brought together by an entrepreneur,” Salsman told me. “Say saw this as a very active and intellectual process. He went out of his way to say this work is cerebral, that the entrepreneur’s contribution comes from the mind: from intelligence, creativity, and perseverance.”

In 1803, Say published his famous “A Treatise on Political Economy,” which laid out his theory for a flourishing market economy, including the importance of entrepreneurs. Inspired by Say more than a century later, the Harvard economist Joseph Schumpeter refreshed the image of an entrepreneur as one who induces innovation and change through what he called “the perennial gale of creative destruction.” This is the continual process by which outdated industries, enterprises, and practices are replaced by new models and methods brought forth by entrepreneurship and innovation. According to Schumpeter, “The entrepreneur and his function are not difficult to conceptualize: the defining characteristic is simply the doing of new things or the doing of things that are already being done in a new way (innovation).” Education entrepreneurs are both doers and innovators, creating change by building new learning models and refreshing old ones.

More recently, innovation and entrepreneurship have been associated with the term “disruptive innovation” that was popularized by Harvard Business School professor Clayton Christensen beginning in the 1990s as a way to characterize how some products or services begin on the margins and then increasingly occupy a larger share of a market before ultimately upending incumbents. “Airbnb is a classic case of disruptive innovation,” Christensen said, explaining how the startup moved from offering a low-end product to a small, niche group of consumers, to eventually moving into the mainstream and disrupting an entire industry.

The story of Airbnb is not only instructive as an example of disruptive innovation. It also illustrates what prompts many entrepreneurs to get started: the need to solve a problem in their own lives. Brian Chesky and Joe Gebbia needed rent money. Two twentysomethings living in San Francisco, the men had met a few years prior as students at the Rhode Island School of Design and became friends. In 2007, Chesky had just moved to the city from Los Angeles, and the pair was struggling to cover the rising rent of the apartment they shared. Then Gebbia proposed an idea: What if they rented out some air mattresses in their apartment to attendees of an upcoming design conference who didn’t want to pay hefty hotel costs? Airbnb’s founders succeeded in creating a legendary company that transformed the hospitality industry and activated millions of entrepreneurial homeowners. But it all started with creative problem‑solving. Most of the education entrepreneurs I have interviewed launched their new schools and spaces to address a challenge within their own immediate family or community—or both.

The American entrepreneurial spirit is on the upswing, and education entrepreneurs are very much a part of the trend toward new business creation. Women, immigrants, and people of color are among those driving the larger U.S. entrepreneurial boom, and it’s not surprising to see that they are also the ones creating many of today’s new schools and learning models. Like entrepreneurs in other sectors, today’s school founders identify educational needs in their communities and invent solutions to satisfy those needs. It’s no wonder that more parents are attracted to these creative schooling options.

From the Foundation for Economic Education (FEE)