Posts Tagged ‘Entrepreneurship’

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.

Got ideas for a business?

November 15th, 2011

Note: This post was originally written for the i2E blog.

Several weeks ago I had the privilege of attending the Teach It! session of the Who Wants to Be an Entrepreneur workshop (anytime you can attend an event that brings people interested in entrepreneurship together from all over the state I highly recommend it). One piece of information that Dr. Rob Wiltbank shared has come up frequently as I’ve met with people who want to start a business. It is this: there are many ways to start a business.

Now I know this doesn’t seem earth shattering at first glance but hear me out.

Dr. Rob Wiltbank at the Who Wants to Be an Entrepreneur workshop.Business schools and popular press have long since focused on setting a goal and then making a plan to get there. This is where the traditional 60-page business plan (an exaggeration, I hope) comes into play. Now goal setting and planning definitely have their place; however, this mind-set has inadvertently caused a little bit of analysis of paralysis for those wanting to start a business because they have trouble knowing what the perfect business idea is. “I just need a good business idea” is a phrased uttered by many wannabe entrepreneurs.

Dr. Wiltbank introduced the fact that you don’t need to know the perfect idea. Instead, if you want to start a business then look at what you have (knowledge, skills, network, interests, etc.) and brainstorm different ways you could leverage those things to solve a problem or meet a need. Then go out and talk to someone who you think might be your customer to see if there really is a problem and if you can really solve it. Then take what you’ve learned and decide again if you can solve a problem or meet a need. During the course of listening and learning is when you will really start to see the good ideas become apparent … then you can write that 60-page business plan.

Foundry Utah

October 3rd, 2011

A quick shout out to a great organization that helped me find my path and start the journey of entrepreneurship. The Foundry is technically an incubator program sponsored by the University of Utah. In reality, it was and still is a community of like-minded people interested in figuring out how to start a company with nothing but a whiteboard and a few documents. A little MacGyverish sounding but having been part of its creation it definitely had that feel of finding a way to get something done with what you had and expecting it to work.

They’ve been running in semi-stealth mode for well over a year (here is the post I wrote in May 2010 when I joined the Foundry) but have finally put up a website to interact  with the outside world since the world kept asking how to find them. I guess in that way it was a little more A-Teamish. It is a unique program that focuses not on building a business but on building the entrepreneur and letting them build the businesses. The businesses themselves vary in industry and success but the end result is more lifetime entrepreneurs and game changers. Not a bad place to spend a few months. If you are interested in keeping an eye on their mayhem sign-up for their newsletter.

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