# 24: Pragmatism
Story behind the Passage
Yes, I know. Again, there is more than one passage above. But we are entering the philosophical sphere now — in case you have not noticed. From my perspective, it is o.k. to start a discussion of Pragmatism with half a page from a book. In fact, I do think that Pragmatism will occupy me in more posts to come. The reason why I have chosen this topic for today is because I am quite grumpy about the overwhelmingly ‘unpragmatic’ way that many institutions and minds work nowadays (I think there is no word such as unpragmatic but I still wanted to use it).
Today, I started calling science foundations because I had a very practical concern. I am currently trying to raise money to help junior scholars with a particular problem. I have a very simple and clear solution for this problem. It just takes some money to pay people for their professional help (Sorry, I cannot talk about what it is exactly because there is a danger that people use this for some commercial purposes which is not my point). So, I went through a list of foundations that offer funding in the field of research with a focus on the humanities. I do know that short-term issues such as the one I am working on are not their primary field of activity. Still, since the problem gets aggravated by Covid, I was hoping to at least find someone who could get me a step ahead. Well, what a humble wish that was!
To make a long story short: After calling about half a dozen foundations and some associations which function as umbrella organizations for foundations, I finished my cold call adventure for today. Result: I know now that they cannot help. But that is not even the problem. The problem I am grumpy about now is the way in which they dealt with the question. Here is how the conversation with one employee there went:
Silke: “Hi, I would like to know if your foundation could support academics, especially PhD students, who struggle with x. They suffer from special hardship during the Covid crisis now and I have an idea how we could help them easily by bringing them together with y.”
Foundation: “Well, we do offer grants for researching problem x. If what you are planning is in the field of foundational research on x, you can hand in a proposal. The next deadline is in three months and if you get the grant you will have money for three years.”
!!!!!!!!!
Can you imagine why I am grumpy??? And this was not the only answer of this kind I received. Just to repeat: I am aware that all of these foundations usually have a different focus. They sponsor academics but only if they do research. The fact that young researchers might also need help RIGHT NOW seems to be totally outside their sphere of imagination. And, even more, they cannot possibly imagine who on earth in Germany might be able to help.
So, this made me think of Pragmatism which is a topic that has been accompanying and moving me for about five years now —in scholarly and practical terms. It is little wonder that my last book which will come out next year has the subtitle “A Pragmatic Approach.” Only yesterday did I tell a mentor of mine about this because he had just experienced another incident of unpragmatic stupidity. If startups are not even able to be pragmatic, where is this country heading?
My Learnings
“Pragmatism is an account of the way people think.” This sentence is basically a rephrasing of the original definition of Pragmatism as method, theory, and temperament. From this perspective, ideas are measured according to their practical value of solving problems (“Cash Value”). No worries, I am not going to go much deeper into 19th-century philosophy and original sources now. I am going to stick to the present and in this respect, this sentence clearly highlights what kind of thinking we are LACKING these days. And since I am writing from the perspective of someone (ob)serving the startup community, I do want to be a little critical by asking: What kind of pragmatic mindset are we seeing in the German startup world?
An experienced founder told me yesterday that investors were offering him funding for the second round. He only needs very little money because the company is going to be profitable soon. What the potential investors told him was this: “We just invested 8 million EUR in a competitor of your business — it is all gone.” Let us repeat: 8 million EUR! Do you have any idea how much you could do with this money? I just googled an example: In a mid-sized German city, the cost for building homes for refugees amounted to 2,8 million. Ergo: You could build homes for refugees in almost three cities with the money that went into one startup with 0 value!
Of course, you can say now: Startup investment is a high risk/high gain business — if it works out. But unfortunately, it hardly ever does. I just read the “German Startup Monitor” yesterday and was not very happy. Reports like this usually sound very positive and they indicate that there is “growth” in so many areas— more incubators, more networks, more startups, more “expected sales,” more… The problem is: Most of these figures are fictional, i.e., they are based on self-assessments and forecasts. And we all know how quickly these can change. What does all this have to do with Pragmatism, you might ask now?
If there is one thing that people pay much money for, it is: pragmatic solutions to important problems. And somehow the lasting dilemma of startups that do not make it through the third year tells me that there is still something wrong with the value creation of startups. And I do think, the “way people think” (see above) in startups is related to this. In order to understand how they think, one needs to look at who thinks. And in the case of German startups, the answer is very clear. See here:
What you see in the chart is that around 84% of the founders have an academic background. More than 14% even hold a PhD degree. For sure, this is great. High tech needs high-flying brains. And it is also an indication that the intersection between university and industry might be intact. But I do have one assumption that is an almost unavoidable side effect of these demographics: People who have been socialized in the academic system for so many years usually unlearn to think pragmatically. In other words: Instead of aiming for a simple solution that can easily be implemented, they overtheorize and never get to the point of solving anything for clients. Am I exaggerating?
Sure! But what I do want to highlight is that the way of thinking in startups is crucially linked to the life expectancy of a startup. And the only way that survival and even growth can be assured is by offering real solutions for real problems. What happens in highly sophisticated and theoretically-trained circles is usually the opposite. We need to work on fixing this — all of us: the education system and the founders. If you are swallowing millions of investor money, does it not make sense to take one hour for pondering if you are still on the way of solving a problem or if you are simply on an intellectual journey that makes it fun to see how technology can actually be built — without ever solving anything?
To be clear about this: I love brains that can do a lot. And I am definitely in favor of smart people founding smart companies. But honestly, if you really want to be an entrepreneur, you need to think of your clients first — always. And as I already mentioned in one of my other posts, clients are not some abstract theoretical concepts. Clients, even if you are running a B2B business, always consist of real people (behind institutions). And they need real solutions, not mere declarations of intent. They need to use your solutions in order to fix their own problems. And that can only be done if your products offer exactly the “use value” that Pragmatism has at its core.
Before going on and on about this, let me just finish at this point. I am convinced that I will continue writing about Pragmatism — not only because I am a Pragmatist at the core but because I think that hardly any philosophical concept will be of such immense importance in the years and probably decades to come. As I also show in my book, Pragmatism is not widely taught in Europe because it counts as the only truly American philosophy. You might argue now that this is only a matter of naming since pragmatism as a way of thinking and solving problems is human and thus universal. Still, I think that Europe is very much struggling with this ideal right now but I do believe that the Pragmatic trend is going to continue.
I just hope that even public institutions, including foundations, will be affected by this trend at some point. Until then, I am going to continue fixing problems myself, as best as I can. And this is actually very fulfilling. If you experience how easy it can be to fix seemingly complicated problems, simply because you stop thinking about them in complex terms, you cannot go back to talking and planning only. Nothing can convert pragmatic thinkers, I think. They might not always succeed with their solutions. But at least, they tried…
Reflection Questions
1) What do you associate with the concept of “pragmatism”?
2) Would you describe yourself as a pragmatic person? Why/not? Give examples of problems you solved.
3) How does your education background help you in your professional role?
Learn more about Silke’s 365 Days Blogging Challenge
https://medium.com/@silkeschmidt_32637/prologue-startup-story-learning-dda4ba9d3bd9