Middle Class of Business: Creating Sustainable Value for Stakeholders
Saras Sarasvathy, a professor at the Darden School of Business, challenges the traditional notion of entrepreneurship. While the prevailing wisdom urges entrepreneurs to pursue game-changing ideas and unicorn valuations, Sarasvathy advocates for the significance of building a middle class of business. This approach focuses on creating sustainable value for stakeholders, fostering robust communities, and ensuring enduring success for entrepreneurs.
Darden alumni have exemplified the potential of middle-class ventures by defying the Silicon Valley model of entrepreneurship. Companies such as Husk Power Systems and 501 Auctions have made significant impacts by addressing real-world problems and creating value in multiple ways. Through providing electricity to thousands of households and revolutionizing the way nonprofit events are run, these companies have demonstrated the profound impact of middle-class ventures.
Sarasvathy’s definition of the “middle class of business” encompasses ventures that endure over time but may not necessarily grow to become very large in size. These enduring firms, typically with five to 300 employees and a profitable survival of at least 16 years, play a crucial role in job creation and economic development.
To promote the growth of a middle class of businesses, Sarasvathy advocates for democratizing entrepreneurship education. By integrating entrepreneurship into essential mindset and skill education, similar to the way science education spurred the rise of the middle class defined by income, Sarasvathy believes that a new wave of sustainable ventures can be fostered.
Sarasvathy’s entrepreneurial method, rooted in effectuation, offers a unique logic for starting ventures using available means, controlling downside risks, and co-creating the future with stakeholders. By shifting the focus from seeking unicorn status to building enduring businesses, Sarasvathy aims to redefine the narrative around entrepreneurship and inspire individuals to pursue a worthy dream.
The Batten Institute for Entrepreneurship, Innovation and Technology, which Sarasvathy leads as an academic director, supports her research on entrepreneurship. Through its Batten Faculty Fellows program, the institute aims to challenge Darden students to fulfill their entrepreneurial potential and promote groundbreaking research in startup creation, VC, and corporate innovation.
The University of Virginia Darden School of Business is committed to preparing responsible global leaders through transformational learning experiences. Its top-ranked faculty and influential research on high-performance entrepreneurship inspire and shape modern business leadership worldwide.
For further information or inquiries, please feel free to contact:
Molly Mitchell
Associate Director of Content Marketing and Social Media
Darden School of Business
University of Virginia
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