The essence of entrepreneurship is not creativity or innovativeness. Not even initiative or getting things done (though those are hygiene factors as well).
Entrepreneurship. Really hip nowadays, right?
Now, if you are considering becoming an entrepreneur because it’s hip and because you’ve heard that’s what anyone who considers herself creative should do or because it’s made to sound like the responsibility of a proper citizen (at least in Finland), I have one message for you:
Stop! Don’t do it!
I’m not saying that entrepreneurship would be generally something to avoid. Just saying creativity or initiative is not yet reason enough. True entrepreneurship might be a paralyzing and counterproductive thing for many creative people.
So what makes an activity entrepreneurial? What’s the essence?
My broad definition: “Taking initiative at your own risk.”
If it is “Driving through a change in how things are done at your own risk”, yet better. Then we are already on the next level. (But this tighter definition would rule out e.g. running your own barbershop as an entrepreneur.)
In either case, the second half is crucial. I would argue that the willingness to take and carry risks is a more important determinant of entrepreneuriality than the novelty/innovativeness of what one happens to be doing.
Achieving widespread adoption of a new practice is innovation. Even breakthrough innovation. However, innovation ≠ entrepreneurship.
Doing it (at least partly) at your own risk is what makes an initiative entrepreneurship.
Now, the above-suggested definitions do not mention gain.
Often entrepreneurs do expect some kind of gain in return for the risks they are taking, including the time and energy invested upfront. But nothing says that this gain has to be received in monetary form, and neither does anythings say that the gain has to be personal economic gain in any form. Value is purely subjective, people are free to choose what they appreciate, what they choose to value. There are many kinds of change an entrepreneur might want to see in the world and/or in their own situation. (I’ll be writing lots about impact entrepreneurship and its dilemmas in my blog – that might be your reason to follow it and subscribe to the e-mail list.)
In this broad sense, Jesus was an entrepreneur, Gandhi was an entrepreneur, Martin Luther King was an entrepreneur. Adolf Hitler most definitely was an entrepreneur – at least the character told of in our Western high school history books. And a very impactful one, too. He also had quite a few failures and pivots under his belt before hitting his “unicorn” with the rise in power of the National Socialist German Workers' Party.
Some sources do claim that there were some notable Western "VCs" backing "Project Hitler" and his economic miracle. Also, we might have a lot of lessons regarding the possibilities (and dangers) of customer-oriented marketing strategies to learn from him. But let's not go into those issues quite here quite yet.
At this point, it's worth noting that he was not alone in being a nutcase – most entrepreneurs that achieve anything are crazy in one way or another. There also seems to be a disproportionate representation of psychopaths and extreme narcissists in the VC industry, and they seem to favour recruiting such. According to Silicon Valley venture capitalist Bryan Stolle, this makes sense, because “it's an irrational act to start a company”. Especially a startup (more on that in another post).
On the other hand Albert Einstein was not even closely as much an entrepreneur as the above-mentioned characters. He developed some really novel theories, ones that others then utilised to implement significant and impactful practical applications. But mostly he did them with other people’s funding without any financial skin in the game.
Of course, he likely risked his career and reputation on multiple occasions by questioning theories widely accepted as universal truth. This is the kind of risk that one could argue is carried by many “intrapreneurs”, people pushing for change and exploring new modes of doing things within established organisations.
Eric Ries, the author of The Lean Startup and the initiator of the movement by the same name, talks a lot about such internal change drivers when he writes: "Entrepreneurs are everywhere. You don't have to work in a garage to be in a startup. The concept of entrepreneurship includes anyone who works within my definition of a startup: a human institution designed to create new products and services under conditions of extreme uncertainty."
In my opinion, Eric's broad definition dilutes "entrepreneurship", making "entrepreneur" merely a trendier synonym for "innovator".
In fact, Eric repeatedly describes his Lean Startup methodology as "the application of lean thinking to the process of innovation".
Risto Siilasmaa, the founder of F-Secure and a long-standing Nokia board member put this risk-taking in other words, framing a less psychopathics perception of it: “entrepreneurship is taking responsibility”.
Some people call this kind of responsibility “ownership”. However, not all owners are entrepreneurs – not even close. (I won’t go here into the details of the economic concept of ownership as an institution and a bundle of rights.) Especially financial ownership (e.g. shareholdership) is often quite passive risk-carrying: most owners are not driving through a change. Also, as a shareholder in a limited liability company, your downside is limited to the amount you invested in the company. This makes sense, as it would not be fair to hold one unlimitedly accountable for something one has no control over (as tends to be the situation of most company shareholders).
Of course, among company shareholders, there are also more entrepreneurial “activist shareholders”, who take a strong role in influencing a company’s strategy. (This kind of meddling is of course not always beneficial.) Asset strippers and other private equity companies conducting opportunistic buyouts and radically restructuring firms are also on the more entrepreneurial (and hated) end of the spectrum.
This post does not make many factual claims. It’s just me defining the words “entrepreneur” and “entrepreneurship” the way I want to define them, based on what, in my view, would make the concept most useful and distinct from other related concepts. I would argue that this definition is useful in breaking the dangerously strong mental association that many people seem to have between “entrepreneurship” and “creativity” or “innovativeness”. The fact that you are very creative or even big on taking initiative does not mean by any means that you are or should be an entrepreneur.
As a creative and curious person, the role of a researcher or designer might suit you better. As a “smart and gets-things-done” person with strong initiative, you might be a great (payroll) development manager, project manager, consultant, or head of an existing society/NGO. You are also exactly the kind of person most entrepreneurs want to hire as one of their first (paid) employees.
Entrepreneurship is a self-destructive mode of existence (more on that later), requiring strong risk-tolerance and an almost nihilist (or at least ironist) attitude towards setbacks and losses. It is not necessarily the best way for you to leverage and grow your creativity. For many people, the risks and responsibility burden involved is more likely to be creativity-paralyzing and constraining.
Also, we should definitely distinguish this broader concept of entrepreneurship from the more specific realm of startup entrepreneurship. (Note that, in the earlier quote, Eric Ries seems to define "entrepreneur" via his definition of a startup. We might have to agree to disagree with Eric on this.) The initial focus of this blog will mostly be on startup entrepreneurship, but I'll try to compare it to other kinds as well. Personally, I also have experience in e.g. commission-based B2B sales entrepreneurship as well as self-published authoring and blogging – in both of which I’ve had very educative failures.
A separate post about the definitions of "startup" and the true, brutal nature of foundership is coming up. And these are just the compulsory introductions to the actual lessons learned. Subscribe to the e-mail list so you don't miss out. I'm also on social media (d'uh). If I'm wrong or an idiot or simply incomprehensible or I should use the H word less or smt, please tell me so in the comment section below.