What is Entrepreneurship?

In order to define what “entrepreneurship” is, your must first define the smaller word “entrepreneur.”  I first came across the word in my eighth grade Junior Achievement class (1981) and to me when it simply meant “business owner.” The only one I met was the CEO of a local hardware supply store that was a major player in the Southeast.  He made almost $200,000/year, and that was good enough for me.  When I was a young adult in the U.S. Navy, Wall Street and the world of investing attracted my attention. By reading the Wall Street Journal, I learned that entrepreneurs were the people who built companies and Wall Street made them gajillionaires.  Again, that sounded great!

I left the Navy and went back to where I came from in Alabama, which was not a mecca for entrepreneurs then and isn’t today.  I answered an ad in the newspaper, bought into someone else’s company, and went broke.  This was my first lesson in entrepreneurship.  I then followed someone else’s advice about learning and getting an education and began studying everything I could study about entrepreneurship.  In my quest for definition, I found a whole host of different definitions of what an entrepreneur is.  The worst definition for “entrepreneur” is Webster’s definition: “one who organizes, manages, and assumes the risks of a business or enterprise.”  It has since been revised to an even worse definition: “a person who starts a business and is willing to risk loss in order to make money.” Although the man who invented Webster’s dictionary in 1828, Noah Webster, was an entrepreneur and an innovator, the people who work there now are not.

How Entrepreneurship Has Been Re-Defined Over the Last Thirty Years

Technology has changes everything.  The best definition I had ever come up with is from Peter Drucker’s 1985 classic Innovation and Entrepreneurship.  Drucker mentions that few new businesses are entrepreneurial in nature, and few business owners are entrepreneurs.  He still leaves the definition stretched across five pages.  This definition was also formed during the years of about 1955-1985, not what anyone would consider the “Golden Age of Entrepreneurship.”  Contrast this with what another of my favorite books teaches, The Start-up of You by Reid Hoffman and Ben Casnocha, two very successful entrepreneurs.  The title of the very first chapter is “All Humans Are Entrepreneurs.”  Today, thanks to new rises in technology, opportunity is all around us.  Start-up costs for the same company have dropped from the inconceivable in 1955 to a few hundred dollars today.  For example, typing this blog out in 1955 would have required a stenographer, a typist, and an editor.  Then, the question would come of finding a publisher, and distribution channels to get it to people to read it.  Today, I can type it out in Word or WordPress and proofread it myself for free on my computer that I purchased for around $500.

Your Definitions Define You

To the newbie or the academic, the definitions are accurate, but to the practicing entrepreneur, these definitions are pretty bad.  The truth of the matter is that success at anything is a mental game.  We as players of this mental game, whether it is starting a new business or your favorite sport, must realize that what you think about most of the time becomes your reality.  The first definition is bad because it focuses on “risk,” a topic few professors know about.    One of my big mistakes was defining my existence in terms of risk.  I subconsciously sought out the riskiest situations and found more risk.  I did not succeed.  I had to shift my thinking from seeking risk to accomplishing a task.  I have only begun a new track record of success in the past few years.

The second definition is bad because it again focuses on “risking loss to make money.”  Don’t get me wrong.  I love making money and other entrepreneurs should too.  It is not the only driver an entrepreneur has.  Changing the world for the better by creating a new business that serves the marketplace is also an aim of the entrepreneur whether he or she admits it or not.

Define entrepreneurship for yourself, but define it in terms of your success, not just in terms of taking risks or making money.  Today, I define entrepreneurship in terms of my business success. Drucker wrote that all businesses are not entrepreneurs, but they have to create something.  If I create my job and a nice income to go along with it, then I have created a happier human being and a better contributor to the world and the overall economic puzzle.  Hence, I have created something and changed the world.  It might sound simple, but it works.

If you follow what “All Humans Are Entrepreneurs” asserts and realize that the barriers to business start-up have never been lower, the question for yourself now is “What am I going to do about it?”