What is Entrepreneurship? Pinning Down It's Definition and Implications

In a previous blog post, I tried convincing myself the importance of entrepreneurial learning. And as I'm digging further into books and journal articles regarding entrepreneurship, I'm running into way too many interpretations on what it means to be an entrepreneur. And if entrepreneurship can't be pinned down, I don't think I'd be able to properly address entrepreneurial learning. To ground myself into a single working definition, I'll present a few different perspectives, and then present my own from what I've observed and learned over the past year.

Eric Ries, in The Lean Startup argues that entrepreneurship is management that can grow the business. He goes on and discusses the importance of being able to effectively measure and learn by testing assumptions. By testing assumptions, the entrepreneur can effectively plan for the future on facts that have been proven true. Thus, the entrepreneur may effectively allocate resources. Again, this comes down to learning, and being able to know what and how to learn, and how to measure ones progress, which leads to learning – a hypothesis proven true by the Startup Genome.

Saras Sarasvathy, in an interview with Big Think, describes entrepreneurship as a way of thinking, as a way of solving problems – just as the scientific method is one possible way of solving problems (1). From her research, she has concluded that entrepreneurship is not about certain character traits, meaning that anyone can be an entrepreneur. With this stance, she teaches a way of thinking, a certain type of logic that experienced and successful entrepreneurs seem to employ (1).

William Gartner, back in 1988, argued that “entrepreneurship is the creation of organizations” (3). Thus, one can distinguish an entrepreneur by the organizations they create, a view that is similar to the one re-iterated two decades later by Eric Ries. Furthermore, Gartner had also argued that defining entrepreneurship by the traits embodied by a certain individual has been “unfruitful” (3).

In a literature review about entrepreneurial learning, Peter Erdelyi points out that “developing a single, widely acceptable definition of entrepreneurship however is not only a conceptual issue but also a matter of political disagreement, as it would affect the allocation of resources (such as academic attention and government funds)” (2). He goes on to say that “in academic practice, new venture creation and small business management is often conflated under the term ‘entrepreneurship,’ while ‘innovation’ is often used as analogous with ‘entrepreneurship’” (2).

There are three main points presented by these different thinkers I'd like to bring to your attention: solving problems, creating an organization, and managing that organization. The problems being solved are problems faced by a customer or user. The creation and management of an organization is the process of bringing together a team to help solve that problem, raising venture capital, making a business plan, and the various other parts that need to move in harmony. From my interviews, observations, and experiences within the Philadelphia tech startup ecosystem, it seems that these three points are the most relevant in defining the role of an entrepreneur. Entrepreneurship is a role because entrepreneurship is dependent on a set of behaviors and not a set of embodied traits. This means an entrepreneur is the role a person fills to create and manage a business to solve a problem a customer is experiencing. In the process, value is created in the exchange between the customer and the startup because the startup relieves some pain for the customer and the customer is willing to pay for the startup's remedy. Using this as my definition for an entrepreneur, I believe there are certain implications for entrepreneurial learning.

Since an entrepreneur is the role a person fills to create and manage a business to generate value for a customer, then entrepreneurial learning is the learning process associated with knowing what to do while filling that role.

Sources:
1. An interview with Saras Sarasvathy at http://bigthink.com/ideas/15302
2.  Erdelyi, Peter. The Matter of Entrepreneurial Learning: A Literature Review
3. Gartner, William. “Who is an Entrepreneur?” Is The Wrong Question. Copyright 1988 by University of Baltimore Education Foundation.

The current draft of my thesis summary can be found here.

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