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DefinitionsOfEntrepreneurship

Definitions of Entrepreneurship

The Origins of the Word

Entrepreneurs, Entrepreneurship, Entrepreneurial. These three words all come from the French verb entreprendre, meaning "to undertake."

Various Definitions

Entrepreneurs have been defined variously over the years:

• Self-employed people who "adjust themselves to risk" (Cantillion, 1755)
• Act upon their own judgment in the face of uncertainty (Knight, 1921)
• Hard-headed risk bearer (Mill, 1848)
• Risk taker (Palmer, 1971)
• Rapacious risk avoider (Webster, 1976)
• Entrepreneurial at certain moments and then something else (Danhoff, 1949)
• Based on Nach (McClelland, 1961)
• Capacity for innovation, Carry out new combinations (Schumpeter, 1934)
• Quickly recognize opportunities (Kirzner, 1973)
• “Displaced Person” (Shapero, 1975)
• Delinquent (Gould, 1969)
• Man apart (Liles, 1974)
• Clear-headed perception of reality (Schrage, 1965)
• Aberrant artist with innate sense of impending change (Hill, 1982)
• Political community builder (Schell & Davig, 1981)

Gartner1985.

Following Hebert and Link 1989, van Praag 1999, Lumpkin and Dess 1996

Three classes of definitions:

1. Based on traits or qualities of the entrepreneur
2. Based on the process and outcomes of entrepreneurship
3. Based on the behavior or activities of entrepreneur

Context
A major failing of entrepreneurship studies is that I can't find much on context: what environment the entrepreneur is operating in. This environment may be a function of the business (self-led or franchise), or of the entrepreneur's goals (growth vs. lifestyle). (I'm not necessarily saying these are valid vectors.) It is critical to understand, prior to trying to identify anything interesting about the person (or potentially the opportunity) what kind of business it is and what differentiates the context.

I propose two vectors:

• Degree of control (self-led, family-owned, franchise, intrapreneur)
• Degree of growth (vc-based, family, lifestyle, "income substitution small business", etc.)

These factors need lots of review - what is control? What if you have it but don't exercise it? What is growth? Is it your goal, a value you hold, an intention?

Vesper's Typology

A big paper is from Shane Venkataraman 2000. They write that "entrepreneurship involves the nexus of two phenomena: the presence of lucrative opportunities and the presence of enterprising individuals." (Shane and Venkataraman, 2000.) However, they include inventors along with entrepreneurs because the focus on the existence of opportunities forces them to do so.

Entrepreneurs can be defined by entrepreneurial outcomes associated with them, by entrepreneurial behaviors that they exhibit or by having entrepreneurial attitudes.

Definitions can be based on traits, behaviors, roles, outcomes, attitudes, etc. People don’t always agree on who is an entrepreneur, or what is entrepreneurial. Example:

• Person who puts on a bake-off, makes it big, but it’s not a business.
• Person who comes up with an invention but sells the idea
• Person who opens a dry cleaner in their neighborhood
• Person who opens a new Starbucks vs. person who opens their own coffee shop

It's important to define an entrepreneur by their behaviors, not traits. Someone can behave entrepreneurially for a while, but then become non-entrepreneurial. There is a tendency to emerge as an entrepreneur that exists based on traits, but the behavior matters, not the traits.

Common bases for descriptions include:

• Outcomes/Achievements: Specific historical events that are associated with entrepreneurship, such as “initiated a venture” or “built a company up” or “identified an innovation and took it to market”.
• Behavioral: Specific things that entrepreneurs do, rally the troops, evangelize, …
• Attitudinal: Taking risks, pursuing new opportunities

Entrepreneurship is an activity. Let us define the behaviors that make up the activity. There are multiple activities that we identify as entrepreneurial.

What is entrepreneurship? Behaviors, roles – identifying opportunities,

• Those who identified opportunities
• Those who initiated businesses
• Those who take risks
• Those who innovate
• Organizational champions

My Definition

• A person who engages resources not currently under his or her control and directs them in a way that they are not currently going. Clearly, this needs some work.

Why Entrepreneurshp Doesn't Require Innovation People confuse innovation for entrepreneurship. Not all innovators are entrepreneurs. If they come up with an idea and sell it, they didn't do anything entrepreneurial. They were just an inventor. Further, entrepreneurs do not need to innovative. Many people are considered entrepreneurs even if they are "fast followers" or copycats. Although many would argue that the enterprise is de facto innovative because "it hasn't been done before in that place by that person at that time", that reifies innovation into meaninglessness. As long as the task is new to the person and they had to acquire new resources to do it, they are considered entrepreneurs. I'm more than happy to test this assertion!

Why Entrepreneurship Requires Personal Lack Of Control People often confuse the creation of new business ventures or new products with entrepreneurship, without taking the environment into account. They may cite Richard Branson's launch of Virgin Cola or Wayne Huzienga's creation of Waste Management Corp. However, if Coca-Cola launched a new soft drink or if Exxon created a new subsidiary company to own a tanker ship, nobody would think of it as entrepreneurial. The reason is that all of the resources needed by these organizations are already available. Nothing being done is new to the founders of these companies. Thus, to be entrepreneurial, the founder (or founding entity) has to be doing something that they haven't done before and acquiring resources along the way. Needs work

Entrepreneurs vs. Others

Compared to other classes of people – managers, small business owners, etc.

Celebrity Entrepreneurs

What is up with these people? How are they different? Many entrepreneurs are local celebrities, but some are major celebrities. How do we measure their celebrity? What is different about them vs. other business people, other celebrities?

Entrepreneurship as the new Job Description

Are businesses expecting individual employees to do their jobs with less direction, fewer in-company resources and more autonomy? There is a good argument to be made that Entrepreneurship is a more common feature of job descriptions. What elements are present? What is the difference between an entrepreneurial employee and a classic entrepreneur?

• Self-originated vision or control over the vision
• Degree of resource "foreignness", presence of a budget
• Ownership of outcome
• Effective control (similarity between VC board and boss?)