Who is the Entrepreneur? What is Entrepreneurship?
Numerous definitions exist regarding entrepreneurship, and the common default is, “Any attempt to create a new business.” However, this restricts entrepreneurial activities to just new or nascent organizations. Although entrepreneurship certainly has ties to the creation of new business entities, it is much more than that particular outcome. What about companies that already exist? Are they not able to be entrepreneurial? And what about small businesses that simply imitate or replicate what others are doing and don’t differentiate in any meaningful way? Would they be considered entrepreneurial?
An entrepreneurial mindset can be applied to all kinds of situations and by all kinds of people. At its essence, the entrepreneurial mindset is about the art and craft of the creative, the unexpected, and the exceptional. It’s about adding value by creating something and providing solutions that are better, faster, and/or cheaper than others. It’s about continuous improvement and not being complacent. A critical aspect of the entrepreneurial mindset is learning from and managing mistakes.
The working definition of entrepreneurship is, “Opportunity recognition and action under conditions of extreme uncertainty.” Opportunity is defined as market failure or imperfect market conditions, meaning customers want something but they can’t get it. They have a problem but no effective solution exists, or a better solution is possible. Therefore, entrepreneurial action is needed to creatively solve those problems in a manner for which customers are willing to pay and will adopt. Entrepreneurs must manage and reduce the risk-reward equation (for customers and themselves) and must then ACT with the tenacity to push an idea through to reality.
The entrepreneurial process thus becomes a cycle of identifying opportunities or market failures, generating creative solutions, assessing and quantifying the risk of those solutions, assembling resources to make the solution viable, and then presenting that solution to interested stakeholders (often culminating in the formation of a new business entity).