The Value Creators Podcast Episode #60. How to Master Entrepreneurship Through Imagination, Value Creation, and Market Disruption: A Conversation with Per Bylund
Listen to the episode here:
How does entrepreneurship truly drive economic growth, and why is it often ignored in mainstream economic models? What role does imagination play in creating market-changing value?
In this episode of the Value Creators Podcast, Hunter Hastings is joined by Per Bylund, professor, author, and one of the leading voices in Austrian economics. Per introduces a radically dynamic model of entrepreneurship based on his new book, Entrepreneurship and Evolutionary Economics.
Key insights include:
- Why modern economics has pushed entrepreneurship to the margins—and why that’s a mistake.
- The difference between creating knowledge and creating value.
- Why entrepreneurial success depends on imagination, empathy, and experimentation.
- How the infeasibility zone traps safe innovators—and how to leap past it.
- Bylund’s three models of entrepreneurship, culminating in Model 3, where entrepreneurs reshape markets.
- The importance of institutional support—and the dangers of policy overreach.
This episode redefines entrepreneurship not as a function of business plans or investment capital, but as an imaginative, value-creating force that reshapes the economy from within. If you want to understand how real economic growth happens, this conversation is essential.
Resources:
➡️ Learn What They Didn’t Teach You In Business School: The Value Creators Online Business Course
Read this episode’s Knowledge Capulse at thevaluecreators.com
Check out Per Bylund’s Latest Book: Entrepreneurship In Evolutionary Economics
Read Per Bylund’s Book: How To Think About The Economy
Read Per Bylund on The Economic Damage Caused by Regulation: The Seen, The Unseen And The Unrealized
Follow with Per Bylund on X: @PerBylund
Connect with Per Byklund on LinkedIn
Connect with Hunter Hastings on LinkedIn
The Value Creators on Substack
Knowledge Capsule:
1. Entrepreneurship Has Been Erased from Mainstream Economics
- Modern economics focuses heavily on predictive models and statistics, which exclude the unpredictable, creative nature of entrepreneurship.
- Historically, economists like Schumpeter and Baumol emphasized entrepreneurs as central to economic dynamics, but their insights are largely ignored (or misinterpreted) by mainstream economists today.
- Entrepreneurship doesn’t fit cleanly into mathematical equations, so it’s often relegated to the “error term” in economic models.
2. Entrepreneurship is a Value-Creation Process, Not Just Innovation
- Entrepreneurs don’t just produce new things—they create new value in ways that weren’t previously recognized.
- Value is determined after the fact by whether consumers choose to purchase and use the product.
- The true test of entrepreneurial success is consumer response, not just the act of creating something new.
3. Value is Discovered, Not Predicted
- Entrepreneurs cannot know value ahead of time—they must imagine what could be valued by customers and test it in the marketplace.
- Even with data and pattern detection, customer preferences are fluid and unpredictable.
- Market value is revealed only after the product is offered and accepted by customers.
4. Imaginative Value Creation is Central to Entrepreneurship
- Entrepreneurs use empathy and imagination to envision solutions consumers don’t yet know they need.
- Great entrepreneurship often involves creating demand, not just responding to it (e.g., when Henry Ford offered customers a car vs. “faster horses”).
- This imaginative leap defines true innovation and market disruption.
5. Disruption Happens Without Warning
- Stable industries can be overturned by innovations that originate outside their traditional space.
- Users once prized and used paper maps. Those have largely disappeared, replaced by GPS navigation systems in cars and on smartphones.Navigation systems are an “adjacent innovation”. These can render existing products obsolete overnight by meeting an important need in a new way.
- Entrepreneurs must be on guard for disruptions—even when things seem stable.
6. Evolutionary Economics Must Include Imagination
- Evolutionary economics values change and complexity but often overemphasizes knowledge accumulation. Knowledge accumulation is not enough.
- Bylund argues that entrepreneurs create value, not just knowledge, and that value emerges from human imagination.
- Economic progress is dynamic, driven by creative acts rather than predictable knowledge gains.
7. Bylund’s Three Models of Entrepreneurship
- Model 1: Static production and consumption with price-driven resource allocation.
- Model 2: Includes external (exogenous) changes like shifting resources or preferences.
- Model 3: Fully dynamic and endogenous—entrepreneurs change the system itself through innovation. This is the entrepreneurial mode of economic growth.
8. The Infeasibility Zone and the Risk of Playing It Safe
- Incremental innovation often keeps entrepreneurs in a crowded, competitive space.
- Radical value creation requires leaping beyond conventional thinking, even when feasibility is uncertain.
- The “infeasibility zone” is where ideas are too safe to stand out and too weak to disrupt.
9. Value Calculus: The Core Entrepreneurial Discipline
- Entrepreneurs must understand the relationship: Value > Price > Cost.
- Entrepreneurs don’t set prices by adding a margin to their costs (“cost-plus” pricing). They create a value for which the customer is willing to pay, and then choose costs that are compatible with making a profit.
- They don’t price without first estimating value, and they don’t incur cost without first estimating the price the customer is willing to pay. This reverse logic is key.
- Starting with cost-plus pricing leads to poor outcomes; entrepreneurs must begin with value imagination.
10. Institutions Enable or Restrain Entrepreneurship
- Supportive institutions (e.g., private property, contracts, and keeping contractual commitments) create the environment for entrepreneurship to flourish.
- Oppressive institutions and intrusive regulations distort markets and reduce entrepreneurial freedom.
- Institutions are shaped by and evolve with entrepreneurial behavior.
11. Policy Cannot Create Value-Driven Entrepreneurship
- Governments may fund large-scale projects, but these are often inefficient and lack market validation.
- True entrepreneurial innovation happens in response to consumer needs, not top-down spending.
- Opportunity costs of government spending are often ignored, diminishing true value creation.
12. The Market Process is Competitive, Creative, and Uncertain
- Entrepreneurs constantly compete for resources by envisioning more valuable uses than others.
- This drives a decentralized and dynamic allocation of capital toward the most value-generating activities.
- The market, through price and consumer feedback, is the ultimate test of entrepreneurial imagination.
