Entrepreneurship has become a broad label under which a hodgepodge of assumptions are housed. This blog post will clarify what entrepreneurship is and what it isn’t.
MYTH 1: ENTREPRENEURSHIP IS ABOUT DELIVERING HIGH PERFORMANCE: Entrepreneurship is not the study of performance of individuals or firms in the context of small or new businesses. The study of the differences in and sustainability of relative performance between competitive firms generally belongs to the domain of strategic management, and is not a unique feature of entrepreneurship. If a performance advantage does not compensate the entrepreneur for the opportunity cost of other alternatives, the loss of time and capital and the uncertainty borne, then that advantage cannot be said to be truly entrepreneurial
MYTH 2: ENTREPRENEURSHIP REVOLVES AROUND THE INDIVIDUAL ENTREPRENEUR: Modern literature is rife with tales of swashbuckling CEOs who assume celebrity, demigod or superstar status in the media. This preoccupation with successful entrepreneurs has led to an over-emphasis on the entrepreneurial personality. In reality, however, just as important as the presence of an enterprising individual is the presence of a lucrative opportunity. Hence, framing entrepreneurship solely in the context of who the entrepreneur is and what he or she does is likely to generate an incomplete understanding of the essence of entrepreneurship
MYTH 3: ENTREPRENEURSHIP IS THE CREATION OF NEW VENTURES: A popular definition of an entrepreneur is as a person who establishes a new organization. In reality, it’s not sufficient to establish a new venture – the venture must exploit a sizeable opportunity, in order to qualify as entrepreneurial. Indeed, many entrepreneurial ideas are exploited within existing companies, or sold to incumbents for exploitation. Hence new venture creation is not a sine qua non for entrepreneurial achievement
MYTH 4: ENTREPRENEURS ARE BORN, NOT MADE: Contrary to popular opinion that believes that entrepreneurship is an inherent attribute, in reality, entrepreneurial behavior is transitory. Entrepreneurship is not solely an inherent characteristic (either you have it or you don’t) Rather it’s a response to the situational cues of opportunities which arise whether or not one is looking for them. Entrepreneurs are not always born – sometimes they are made by a favorable or auspicious set of circumstances
MYTH 5: ENTREPRENEURSHIP IS MEANT TO BE PRACTICED, NOT STUDIED: Many people believe that entrepreneurship is a pragmatic activity, which does not lend itself to study and examination. On the contrary, studying business without studying entrepreneurship is akin to studying Shakespeare without studying Hamlet. There are three cogent reasons for studying entrepreneurship: Entrepreneurship should be studied because it enables society to convert technical information into products and services. Entrepreneurship should also be studied because it enables economic inefficiencies to be discovered, evaluated and exploited. Finally, entrepreneurship should be studied because entrepreneurially-driven innovation in products and processes change the world we live in. Hence, the study of business would be incomplete without a thorough understanding of entrepreneurship
So what then, is entrepreneurship? In reality, entrepreneurship is the discovery, evaluation and exploitation of opportunities. A genuine understanding of entrepreneurship really answers three questions:
- Why, when and how do opportunities for the creation of goods and services come into existence?
- Why, when and how do some people and not others discover and exploit these opportunities?
- Why, when and how are different modes of action used to exploit entrepreneurial opportunities?
In subsequent articles, we will explore these three entrepreneurial activities – discovering, evaluating and exploiting opportunity.
Are you a potential entrepreneur thinking about starting a new business? Are you a business leader thinking about turning an idea into entrepreneurial success? If you would like a free personality test to check how entrepreneurial you are, click here to get your free E-Scan now. This online scan gives you – in about 15 minutes – a detailed and accurate entrepreneur self-assessment profile; thus uncovering your entrepreneurial potential, trait, and skill. Do you have what it takes to be your own boss? Find out now
Subscribe below to get my business planning tool: ” The Entrepreneur’s Roadmap” as well as my weekly newsletter.