The Meaning of "Entrepreneur"The romance of entrepreneurship ensures overuse of the term "entrepreneur." A Knowledge@Wharton article published today reports on discussion of the characteristics of true entrepreneurship that took place last month at the 2006 Wharton Entrepreneurship Conference.
It was interesting to me, as I read the article, to find that it's easier to identify myths to dispel, than to pin down truths concerning entrepreneurship.
First, to replace popular myths, research supplies these findings:
- Entrepreneurs do not have unique characteristics that distinguish them from other people.
- Entrepreneurs are not risk-lovers, they are risk managers.
- Entrepreneurs do not have a "secret formula" that produces their success.
- Beware of venture capitalists. Because, in exchange for VC money, you have to cede so much equity and control, you are well-advised to first tap alternate sources of finance, such as savings, Small Business Administration loans, second mortgages, family and friends.
- Look for opportunities involving disruptive technology and/or frustrated prospective customers.
The key feature of disruptive technologies is that they "enable startups to jump into large, lucrative markets where established leaders have become complacent." Internet telephony is an example.
The website Shopzilla is an example of introducing a solution to customer frustration. Shopzilla "helps consumers find bargains and also rates online retailers."
- Aim to deliver higher quality at a lower price. For example, online retailers can both sell for less and make buying more convenient for customers.
- The Keep It Simple, Stupid (KISS) principle is a touchstone. Better to prepare a prototype sans extraneous bells and whistles and get it quickly to prospective customers, than to produce a baffling product that takes time to bring to market and then gathers dust because people find it too complicated to enjoy.
An important by-product of getting a usable version of your product to market quickly is that you then have a stronger case for outsiders to provide financing.
An innovator of business enterprise who recognizes opportunities to introduce a new product, a new process or an improved organization, and who raises the necessary money, assembles the factors for production and organizes an operation to exploit the opportunity.