Entrepreneurs and Entrepreneurship

Entrepreneurship is for sure something you can learn. We like to compare it to soccer. It's not very complex, yet its a difficult skill to master. Almost anyone can learn to play soccer, some talent may help, but mostly it takes a lot of practice and a good coach (who knows how the game is played). Johan Cruijff (the best soccer payer ever) once said; "playing soccer is not very complicated, you just need to do a few simple things very very well". Entrepreneurship can be learned and entrepreneurial skill are very useful for employees and other people that want to make a difference, but who do not necessarily start their own business. To be called an Entrepreneur, three conditions need to be met:
  • You are your own boss;
  • You work for your own account and risk, your income is related to the outcome of your activities;
  • Your business is (financially) sustainable. 

Definition of Entrepreneurship

The definitions of entrepreneurship and entrepreneurial abilities vary widely. The definition of entrepreneurship that we like to use is based on 20 years of hands-on experience with startups and the work of some great thinkers whose views fit in well with what we are experiencing in practice. Our challenge is not to determine which thinker is right, but to come up with a definition in which all thinkers and their ideas get a place. Below is a brief overview of the ideas that we have included in our definition of entrepreneurship:
  • Marshall (1890) states; an entrepreneur organizes and coordinates economic resources;
  • Schumpeter (1942) states; an entrepreneur is an innovator and an "Industry Leader";
  • Schultz (1975) states; an entrepreneur distributes resources on alternative uses;
  • Covey (1989) states; Effective entrepreneurs demonstrate leadership;
  • Kirzner (1997) states; an entrepreneur is a creator, alert to market opportunities;
  • Casson (2003) states; an entrepreneur makes decisions;
  • Sarasvati (2009) states; Make use of your own strength and assets;
  • Brown (2009) states; a good (product) design is based on the needs of the customer;
  • Osterwalder & Pigneur (2010) state; use a business model to align costs and benefits with each other;
  • Ries (2011) states; an entrepreneur works under conditions of extreme certainty;
  • Blank & Dorf (2012) state; a start-up is not a small version of a large company, but a temporary organization designed to develop a repeatable and scalable business model;
  • Aulet (2013) states; entrepreneurship requires a disciplined approach and can be taught;
  • Stam (2015) states; an entrepreneur contributes to the creation of prosperity. Prosperity is defined as the accumulation of solutions to social problems.
The above ideas are translated into fourteen entrepreneurial qualities of which twelve are typical for entrepreneurs and two qualities are essential for entrepreneurs, but not necessarily typical for them. The definition of an entrepreneur is someone who is his/her own boss and works for his/het own account and risk that meets the twelve qualities typical of an entrepreneur. You may notice that things like a "having a good idea", "starting a business", "profit-making", "money", "taking risks" and "making a business plan" do not appear in the list of entrepreneurial qualities . That's because in research and in practice, those things do not contribute significantly to the success of entrepreneurs or people with an entrepreneurial attitude.

Based on the above ideas we have defined the twelve entrepreneurial qualities that are typical of an entrepreneur.

1. The ability to formulate social and/or economic ambitions and to achieve these ambitions through personal commitment and the commitment of available resources* (core function of an entrepreneur in economic and social terms, partly borrowed from Marshall & Schultz);
2. The ability to see opportunities, evaluate them and exploit them creatively (derived from Kirzner);
3. The ability to break with the existing status quo, innovate, and simplify complex issues (taken from Schumpeter);
4. The ability to lead and persuade others (derived from Covey);
5. The ability to make decisions and justify them (derived from Casson);
6. The ability to link goals to ones own strength and available resources (based on Sarasvati);
7. The ability to think from the perspective of customers and stakeholders (taken from Brown);
8. The ability to balance costs and revenues (partly derived from Osterwalder & Pigneur);
9. The ability to work in situations where nothing is certain (derived from Ries);
10. The ability to develop sustainable and scalable business models (partly derived from Blank & Dorf);
11. The ability to explore, learn and work in a disciplined way (taken from Aulet)
12. The ability to be ambitious and to contribute to the creation of prosperity (based on Stam);

From the domains philosophy, leadership, economics and management we add two qualities that are essential for an entrepreneur:

13. The ability to act legally and ethically;
14. The ability to effectively deal with cultural diversity;

Social entrepreneurship, creative entrepreneurship or entrepreneurial abilities require the same entrepreneurial qualities as "normal" entrepreneurship. All entrepreneurs are more or less creative and social, otherwise their businesses would fail do to lack of popular support. It is ocvious tah both "for profit" and "not for profit" will sease to exist if they make a "loss". A customer is a customer, regardless of whether the organization is "for profit" or not. So we believe one set of entrepreneurial qualities is sufficient to teach all forms of entrepreneurship. However, the context and the purpose in which these qualities are applied can vary widely.

* Resources such as people, knowledge, money, energy, resources and raw materials

Bibliography:
Marshall, Alfred, (1890), "Principles of Economics";
Schumpeter, Joseph A, (1942), "Capitalism, socialism, and democracy";
Schultz, T.W., (1975), “The Value of the Ability to Deal with Disequilibria.”;
Covey, Stephen R., (1989), "The Seven Habits of Highly Effective People";
Kirzner, Israel M., (1997), "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach";
Casson, Mark, (2003), "The Entrepreneur: An Economic Theory";
Stam. Erik, (2008), "Entrepreneurship and Innovation Policy";
Sarasvathy, Saras D., (2009), "Effectuation: Elements of Entrepreneurial Expertise";
Brown, Tim, (2009), "Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation";
Osterwalder, Alexander & Pigneur, Yves, (2010), "Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers";
Ries, Eric, (2011), "The Lean Startup";
Blank, Steve & Dorf, Bob, (2012), "The Startup Owner's Manual: The Step-By-Step Guide for Building a Great Company"; 
Aulet, Bill, (2013), "Disciplined Entrepreneurship: 24 Steps to a Successful Startup";
Stam, Erik, (2015), "The State of Entrepreneurship in the Netherlands";