Archive for the ‘General’ category

Entrepreneurial Definitions

December 15th, 2013

Last night I was helping my son with some English homework that involved a kind of definition map that he was supposed to use with his vocabulary. The definition map requires that you give examples, non-examples, and describe the properties of the word besides the actual definition. We found verbs were a lot harder to conceptualize than nouns. This activity caused me to reflect on the word ‘entrepreneurial’. I recently reviewed a book that advertised entrepreneurial quizzes. It turned out to be nothing more than a career interest tests with the word ‘entrepreneurial’ slapped in front of each section.

This is not an uncommon problem since being an entrepreneur or entrepreneurial is en vogue. Established businesses are entrepreneurial, leaders are entrepreneurial, and apparently even accountants can be entrepreneurial. It definitely fits into the current business buzzword vernacular. What does entrepreneurial finance mean anyway? Does it refer to finance done by an entrepreneur, a financier doing entrepreneurial things or something else? What is so different about entrepreneurs that it has created this additional adjective?

Often entrepreneurial is used in place of the word innovative, inventive, or creative. However, these are different things. Creative is the use of imagination to create something unique. Inventive is the creation of a new thing. Innovative is using new and old things in new ways usually to solve a problem. However, entrepreneurial is more than that. It solves a problem while making money. This situates the definition in the business world but still requires further clarification.

Google’s top result is a nice big definition but I don’t understand how “taking financial risks in the hope of profit” is different than what any other business person does? This definition is illustrative of the view that start-ups are just smaller and newer versions of large companies. I won’t bemoan what Mr. Blank has so eloquently described in Why the Lean Start-Up Changes Everything. The point is start-ups are about learning what works before scaling and optimizing. That learning function is a key; learning in uncertainty when there is no one right answer or way of doing things. We’ll cover more in just a second.

My definition of entrepreneurship or entrepreneurial is functional allowing people to be entrepreneurial one minute and normal the next whether you are inside a corporation or part of a start-up. So what is the function of an entrepreneur? What do they do? Well, from an economic standpoint they reduce uncertainty and make a profit by doing so. Now when I say uncertainty I am using economist Frank Knight’s version of the unknown unknowns that don’t have probabilities attached to them. Any time someone seeks to reduce uncertainty in executing a business model they are entrepreneurial. The uncertainty may lie within the different business model components such as the technology, market, or even the execution (e.g. franchisees or copy cat firms).

To be entrepreneurial is to reduce uncertainty in the execution of a business model in ways that are profitable. This happens through vision, action, and learning. Most uses of the term are used incorrectly in the context of risk rather than uncertainty which is what regular business is about and what comes after the entrepreneur has done their job.

Crowdfunding Project

February 6th, 2013

Well I finally thought I’d give crowdfunding a try while helping my kids get a feel for some entrepreneurial activities. Here’s the video my 11 year old helped produce for a kickstarter project:

KBeaners

Utah Startup Map

August 23rd, 2012

I’ve begun a new project of mapping the entrepreneurial ecosystem of the state of Utah. Similar projects are going on in various parts of the country as part of initiative like Startup America or the Startup Genome. This map may eventually move to its own site or become part of a Startup Utah launch but for now we’ll house it here on Brain Huddle. We’ve added a link above to make it easier to access. The map is based off of an open-source code provide by Represent LA who did a great job documenting and doing the hard work. I’ll be seeding the map with a few items to get started but will largely rely on the entrepreneurial community to fill in the blanks. Just click on the “Add Something” button and select from the drop down menu one of the following roles in the ecosystem:

Startup: While some may argue this is a mindset thing I’m going to place a few parameters to avoid turning this into a yellow pages map for the business community. Your company can’t be older than 5 years old max-that should give you enough time to figure out the business model even for those that are funded. You may not have more than 150 employees because this is when you cognitively stop knowing who works for you (though I’m tempted to say 100). On the flip side, I will be excluding any that are obvious service sole proprietors (e.g. Your Own Name Consulting, LLC) or franchised product distributors (e.g. Avon, doTerra Essential oils, etc.) as startups. You stop being a startup when you are recognized as legitimate by the majority of stakeholders though your customers’ opinions matter most and trigger the rest. If there is a threat or risk that you aren’t likely to be around within a year’s time or when funding runs out then you’re probably a startup.

Accelerator: These are programs that provide structured training designed to accelerate the business development of a startup and are for a set time usually a matter of months. Often there is an application process and some cost associated either in the form of equity exchange or fee.

Incubator: These programs are designed to support the successful development of startups by primarily providing space at a reduced rental rate and sometimes a variety of support resources and services. The lack of a finite training program is the main difference between an incubator and accelerator.

Co-working: These are locations where entrepreneurs can work in a shared environment. Unfortunately, there haven’t been a lot of these dedicated spaces that have lasted very long so for the purposes of this map it can also be any public place where you’re likely to find others working, can get decent wifi and some work done (i.e. they won’t kick you out for lounging).

VC/Angels: These are individuals, groups, and organizations that are involved in speculative investing providing capital for startups usually in the form of convertible debt or in exchange for equity. This item can also be used for any traditional loan or microfinancing entities. Any competition or awards that have cash rewards should be listed in events.

Consulting Firm: This category is any individual or organization that provides education or assistance to startup companies or entrepreneurs either for free (e.g. SBDC) or for a fee (e.g. attorneys).

Events: The events are actually not submitted by the form but are pulled from eventbrite.com from results that show up under a search for the keyword entrepreneurial. If the event does not use eventbrite such as a meetup or a competition then email the details to brainhuddle@gmail.com and it will be added to BrainHuddle’s proxy page for Utah Entrepreneurial Events so that it will show on the map. So some events that are regular like LaunchUp won’t show up until they put up their usual eventbrite page

Please help us fill up the map and make entrepreneurship in Utah easy!

Get Adobe Flash playerPlugin by wpburn.com wordpress themes