I subscribe to the notion that entrepreneurship is about creating a new business where one did not exist before, and in doing so the business should be profitable, enhance wealth and be impactful to people and the world.
Let us start by understanding the very idea of new businesses. For something to be new, it has to be novel or non-existent in the exact type or form before. Entrepreneurship is about developing something new, either a service or a good and selling this new thing of value to customers. It generally culminates from an idea and seizing an opportunity. Entrepreneurs are known for their can-do attitude, inventiveness, appetite for calculated risk and discipline. These assets are particularly useful because bringing something new into existence takes a lot of skill and discipline.
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On the other hand, a business is not just about the entrepreneurs or their ideas. A business needs to thrive and even scale, achieving which can only be done with profits. These are some of the key factors that enable the business to achieve its objective because, without sustenance, the business will not thrive or scale. Many researchers of entrepreneurship allude to ‘paying customers’ or ‘viable markets’ as the top necessary condition for a successful business. I agree with this assertion and believe that all businesses must offer value to customers and in return get some value for the offer. However, this is not to be misunderstood as profiteering at the expense of customers. Entrepreneurs and their businesses must be grounded in a core ideology to deliver something of an intrinsic value and impact as well as making a profit.
Moreover, when a business brings about something that did not exist before, and then thrives and grows, it inevitably leads to wealth creation. This is the true definition of entrepreneurship and is exemplified by all the great successful companies from all over the world. All successful enterprises, new or old are bound by this spirit of entrepreneurship across the board.
In essence, to become a successful entrepreneur, one must have a great business that offers innovation in some form of goods or services. However, there has not been a massive body of work in terms of academic research in Entrepreneurship as of now, because it is a fairly new field of study and most institutions are just getting to understudy the field seriously.
Generally, we see entrepreneurship within the light of small businesses. However, new and prominent research has highlighted the dichotomy of entrepreneurship across the world whereby the vast majority sees it as a Small and Medium Enterprises base activity while the other looks at it from an Innovation Driven Entrepreneurship point of view. SMEs are typically started by one person and serve local markets. The entrepreneurs in SMEs are usually family-based and benefit greatly from the cash flow of the business and the independence of their businesses. The jobs provided through SMEs are limited, but rapid. The business does not require a lot of capital and can, therefore, translate money injected easily into growth and jobs. Typical examples are restaurants, corner shops or kiosks, laundry shops, hair salons and the likes.
On the other hand, Innovation Driven Enterprises or IDEs represent a much more different type of entrepreneurship that is riskier and more ambitious. The target of IDEs is beyond the local or regional market. The IDE entrepreneur looks at a global market. They are not too particular about control and independence as they are about creating wealth which enables them sell equity and raise the huge capital required to run the company. IDEs are not as raid as SMEs but they are generally more liable to grow exponentially when they do get traction. Companies like Google and Apple are typical examples of Innovation Driven Enterprises.
The greatest entrepreneurs envision leading their companies as global, innovation-driven enterprises because of the profitability and wealth creation propensity of innovation driven entrepreneurship as well as its capacity for more jobs and more lasting legacy. Therefore, I affirm that entrepreneurship and especially successful entrepreneurship is about creating not only novel businesses that strive to enhance wealth and impact people and their ways of life positively.
I mention impact because every business should and must have purpose of existence beyond the creation of wealth. A “raison d’être”, which means “the most important reason or purpose for someone or something’s existence”. Inarguably, businesses that are purpose-driven are more stable and more economically successful in the long run. With the COVID-19 crisis came a flurry of profiteering businesses bent on making money on the plight of the people and institutions. So many of these businesses founded solely based on profiteering are getting crushed publicly. Besides, when attracting long-term, innovative people, entrepreneurs must appeal to our innate desire to do good and make a change because people want to work for companies that also contribute to making the world a better place. If you’re starting a new business, ask yourself ‘what is my company’s raison d’être’?