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What is Entrepreneurship?

What is entrepreneurship?  I have to admit, this is one of my least favorite questions in the world right now.

It seems to come up all the time.  It’s discussed ad nauseam.

And these discussions inevitably lead to additional “What is….” questions.

What is a startup?

What is innovation?

What is creativity?

What is a small business?

What is self-employed?

And, finally, to what extent are all of these terms related and which ones are synonyms?

As useless as I tend to find these discussions (I was once told “you guys concentrate on entrepreneurship, we’ve got innovation covered” as if that were a meaningful statement), as a Professor teaching entrepreneurship I ultimately do believe I should have some definition to describe what it is I’m trying to teach.

The obvious place to start is…Google.  Some examples from a quick search include:

Wikipedia – Entrepreneurship

Entrepreneurship is the process of starting a business, a startup company or other organization. The entrepreneur develops a business plan, acquires the human and other required resources, and is fully responsible for its success or failure.[citation needed] Entrepreneurship operates within an entrepreneurship ecosystem.

Merriam-Webster Dictionary – Entrepreneur

: a person who starts a business and is willing to risk loss in order to make money

: one who organizes, manages, and assumes the risks of a business or enterprise

Dictionary.com – Entrepreneur

a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.

BusinessDictionary.com – Entrepreneurship

The capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new businesses.

In economics, entrepreneurship combined with land, labor, natural resources and capital can produce profit. Entrepreneurial spirit is characterized by innovation and risk-taking, and is an essential part of a nation’s ability to succeed in an ever changing and increasingly competitive global marketplace.

Technology Ventures by Dorf and Byers

undertaking the creation of an enterprise or business that has a chance of profit or success

Investopedia – Entrepreneur

An individual who, rather than working as an employee, runs a small business and assumes all the risk and reward of a given business venture, idea, or good or service offered for sale. The entrepreneur is commonly seen as a business leader and innovator of new ideas and business processes.

HBS Professor Howard Stevenson

Entrepreneurship is the pursuit of opportunity beyond resources controlled.

We see a lot of similarities, but also some differences.  To visualize the commonalities in these definitions, I like to use a “world cloud.”

Screen Shot 2015-05-27 at 9.20.45 AM

 

We see “entrepreneurship” or “entrepreneur” seems to relate to:

  • business
  • develop
  • enterprise
  • idea
  • innovator
  • manages
  • organizes
  • process
  • profit
  • resources
  • risk
  • starting
  • venture
  • success

Looking over these 14 terms, I see a natural grouping of related terms.

Entrepreneurs seem to:

  • develop
  • start

and:

  • innovate
  • manage
  • organize

Some sort of:

  • business
  • enterprise
  • venture
  • idea
  • process

With hopes of:

  • success
  • profit

Despite issues of:

  • risk
  • resources

At first glance, we seem to be heading towards a pretty good working definition of what entrepreneurship is.  So why all the discussions?

The conflicts I see tend to arise from three areas above.

The first is the role of “innovation” and commercializing innovation and whether it is necessary for entrepreneurship.

Is innovation a pre-requisite?  Is it part of the process?  Or is it simply one type of entrepreneurship?

Was Microsoft acting “entrepreneurially” when they launched Windows even though it was a much less innovative copy of Mac OS?  Was Apple acting entrepreneurially when they launched Mac OS based on technology that Steve Jobs saw at Xerox simply because Apple commercialized it?

The second is the role of “success” and “profit.”

How is success defined?

Does “success” equal “profit” or, perhaps more important, does “profit” equal “success?”

Is the surfer who starts teaching surf lessons from his beach shack so he can surf all day and eeck out a “financial” living an entrepreneur?  Is the small business owner who starts a local chocolate shop so she can be financially independent an entrepreneur?

And the third area is whether entrepreneurship necessarily involves starting a new company?  When I’m staring up at a mountain slope that doesn’t have a visible ski line down it, and I creatively envision a path down that has never been skied before, am I thinking “entrepreneurially?”

And…now we see why this conversation can go on and on and on and on.

…and…on and on and on.

Personally, I like to think of entrepreneurship more as a state of mind than something only related to new business creation.  I’ve seen my dog act “entrepreneurially” in his attempts to get a ball when playing fetch with bigger and faster dogs.  I’ve even seen my 4-month-old son act in a way I’d call “entrepreneurial” when trying to grab a toy.

Thus, of the definitions Google serves up, I probably like the last one I listed the best:

Entrepreneurship is the pursuit of opportunity beyond resources controlled

The implications for who should be considered an “entrepreneur”  are vast.  I will explore this question further in my next post.