What is entrepreneurship?
Pierre KrausBusiness Analyst @Telios
#The meaning of an entrepreneur
“I want to become an entrepreneur.” I always was fascinated by entrepreneurs and entrepreneurship. I would associate it with adventure, discovery, innovation, success… At first, I thought of being an entrepreneur as a job or a career - meaning some people were meant to become entrepreneurs. However, the more I thought about it, the more I saw it as a mindset and a way of navigating life. In each of us lies an entrepreneur, it is up to us to awaken its spirit.
#A “by the book” definition
Economists have never had a consistent definition of "entrepreneur" or "entrepreneurship." Though the concept of an entrepreneur has existed for centuries, it wasn't until the middle of the 20th century that economists attempted to introduce it into their models. The classical and neoclassical economists considered risk-taking or discovery contradictory to their formal economy model, where actors were entirely rational and would know perfect information. It took hundreds of years and several innovative thinkers to include the term entrepreneur in later iterations of economics:
- 1734, Irish-French economist and author Richard Cantillon penned (An Essai 0n Economic Theory). In Essai, the author depicted the entrepreneur as a risk-bearer: "Entrepreneurs are non-fixed income earners who pay known costs of production but earn uncertain incomes."
- 1803, Jean-Baptiste Say, a French classical liberal economist, coined the term entrepreneur from the French verb entreprendre (undertake). Say's vision described entrepreneurs with the ability to identify inefficient uses of resources and capital and reallocate them to increase efficiency and generate more profit. "By selling the product in the market, he pays rent of land, wages to labor, interest on capital and what remains is his profit."
- 1934, Joseph Schumpeter, an Austrian political economist, defined entrepreneurs as agents who take leadership roles in translating inventions into innovation. "Development in our sense is then defined by the carrying out of new combinations... The carrying out of new combinations we call 'enterprise;' the individuals whose function it is to carry them out we call “entrepreneurs."
- 1973, British-born American economist Israel Kirzner approached entrepreneurship as a process leading to the discovery. As we are "alert to opportunities" to challenge our individual status quo by looking for ways to better ourselves, our alertness can be used to make progress. According to Kizner, entrepreneurship is: "The job of correcting misallocations by specializing in the discovery of missed opportunity."
Based on the information above, an entrepreneur could be defined as a risk-bearer able to identify inefficient use of resources and capital while developing new combinations (innovation) to discover missed opportunities to generate profit.
#Demystifying the word entrepreneur
Simply put an entrepreneur = analysis + discovery + risk. My take is nobody is born an entrepreneur, you become one. Because the only way to better analyze, dare to discover, and mitigate risk is experimenting or undertaking to refer to Jean-Baptiste Say. You can’t run before learning how to walk.
But stepping into the unknown and wandering off the beaten track is easier said than done. So, how do you overcome the fear of failure, the uncertainty and doubts to start your journey of entrepreneurship?
#The journey of entrepreneurship
An entrepreneur needs to be fueled by a vision. It represents an ideal, an almost impossible mission to complete but it’ll give him a pole star to guide him through hardships and challenges. A vision is more abstract than a goal. It helps to focus on the journey, not the destination. Goals are here to breakdown the steps to achieve the vision and keep momentum. They are finite, whereas the vision is infinite.
Simon Sinek eloquently summarizes the entrepreneurial journey people set out on a journey to find the pot of gold at the end of the rainbow. However, he argues about the existence of the pot of gold and highlights the value of the journey itself. The adventure and the people you share the experiences with are what make entrepreneurship joyful and exciting. People sharing and working towards a common vision makes the venture worth it, whether it is successful or not.
Talking about the pot of gold at the end of the rainbow reminds me of the manga One Piece, a japanese comic novel. A story about Luffy and his pirate crew who set sail to find the legendary treasure left by the infamous Pirate, Gold Roger, the "One Piece". Like the pot of gold, nobody knows if the One Piece is even real. But, the adventure, friendships, excitement and stories to tell are what ignited the fire of Luffy and his crew to explore the world. Despite the challenges and obstacles paving the sea, the vision they share fuel them to achieve one milestone after another.
Whether it is a business endeavor, finding the pot of gold at the end of the rainbow or chasing the One Piece, it is about the vision and seeing what cannot be seen: the shared experiences and memories.
#Long story short
Envisioning what we want to become or achieve, setting goals and working towards our visions is the key to becoming the entrepreneurs of our own life. Call me an utopist, but I believe having dreams will always get you farther than having none, whether you achieve them or not. Entrepreneurship is an adventure to the unknown, and "You should enjoy the little detours to the fullest. Because that's where you'll find the things more important than what you want." Ging Freecss, .