Entrepreneurship

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Entrepreneurs are responsible for some of the most successful businesses out there. What actually defines an entrepreneur? What is it that makes them different? One of the best definitions around came from Harvard, calling entrepreneurship “the pursuit of opportunity beyond resources controlled1”. 

Entrepreneurs seek to solve problems by developing new, innovative businesses, regardless of resource constraints. You can contrast entrepreneurs with administrators: individuals who like to work in hierarchical structures, avoid taking risks, and don’t want to reinvent the wheel.

Entrepreneurship goes beyond individual people, though: companies and organizations can have a strong entrepreneurial culture too. And together, these entrepreneurial individuals and companies can wind up accelerating economic growth. They may create employment opportunities, promote social change, improve existing systems, and lead to innovation.

What motivates entrepreneurs?

People’s motives for entrepreneurship can vary: they might be looking for some combination of financial success, recognition, flexibility, and the opportunity to create and innovate. But what often separates successful entrepreneurs from the rest is an innate motivation to make a difference by creating products and businesses that solve problems.

All sorts of organizations globally have started with an entrepreneurial spark. But once the initial growth phase fades, it’s challenging to keep on growing. Companies are constantly looking for ways to stay competitive and at the forefront of their markets. Their main motivations for innovating are to outpace competition, promote growth, and diversify revenue.

What does an entrepreneurial culture look like?

Beyond motivation, sustainable entrepreneurship requires the right individual mindset or corporate culture. People need a combination of resiliency, resourcefulness, discipline, and constant action to succeed in any entrepreneurial venture. 

Organizations need people with these attributes and a culture that fosters entrepreneurship. To create one, leaders can focus on removing hierarchy, providing autonomy, increasing collaboration, and making space for people to explore ideas freely. 

What challenges do entrepreneurs face?

The path to success is not necessarily rosy: entrepreneurial people and companies will encounter many challenges – and take many risks – along the way, which is both an expected and integral part of the process. Here are some of the most common ones:

Financial: Any innovation requires financial investment, and both companies and individuals will have to spend money to develop their ideas. If an idea fails, you could lose savings, company cash, or investor capital. 

Opportunity cost of time: Pursuing entrepreneurship will mean sacrificing other opportunities. As an individual, that means giving up alternative career paths with steady paychecks. As a company, that means giving up time that’d otherwise be spent on other business ventures.

Competition: When you’re trying to create a new business, there’s always the risk that somebody will beat you to it. Opportunities for innovation can be very attractive, so well-resourced, established companies may well step in and compete. 

KEY TAKEAWAYS:

 

Entrepreneurship is the pursuit of opportunity beyond resources controlled by individuals and organizations.

Entrepreneurial motivations include recognition, financial success, growth, competition, and innovation opportunity.

The path to entrepreneurship is risky: people and organizations alike will face many challenges along the way.

 

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