Entrepreneurship is a word we hear often. Just as often, what it means depends on who you ask. Out of curiosity, I recently texted about fifteen or so of my friends and asked them what do they think of when they hear the word entrepreneur? The answers were almost as varied as the number of people I asked but the most common thread was entrepreneurs are people who started a business and entrepreneurship essentially boils down to founding a company.
Funny thing is that when I worked at Velocity, a Canadian startup incubator, I had this conversation with a number of founders who specifically told me they do not like being referred to as entrepreneurs. The reason? The word has become so overused that it had ‘lost its meaning’. “Everyone is an entrepreneur these days” they’d say. They preferred to identify themselves as founders.
I also teach entrepreneurship to university students. The almost automatic assumption amongst family and friends is that I teach people how to start a company. The truth is that definitions of entrepreneurship are just as varied in the context of education. In Europe, for example (especially in the UK) two common terms are enterprise education, which includes focusing on personal , mindset and skills development, and entrepreneurship education referring specifically to starting a business and becoming self-employed. In North America however, we use entrepreneurship education to refer to both. Confused much? Rightfully so.
As noted, even those formally studying this topic seem to struggle agreeing on a common definition of entrepreneurship, especially in education.
But fist, let’s have a look at the past, which will shed some light on the present.
Entrepreneurship through time
The association of entrepreneurship with business creation makes a lot of when looking at its journey through time. The word entrepreneur originates from a 13th century French verb entreprenedre which means “to do” or “to undertake” something.
By the 16th century the noun form of this verb – entrepreneur – had formed and was being used to refer to a person who undertook a business venture. In the 18th century, Richard Cantillon, an Irish-French added to that definition and introduced ‘the willingness to bear a personal financial risk of a business venture’ as a defining characteristic of an entrepreneur. In the early 19th century the term entrepreneur was further popularized and an entrepreneur was defined as someone who assumes both the financial risk and the management of a business (as opposed to only being a shareholder in a company). In the 20th century an economist named Joseph Schumpeter refined the definition of entrepreneur as an innovator who implements change in the economy by introducing new goods or new methods of production.
Today, the European Commission defines entrepreneurship as “acting upon opportunities and ideas and transforming them into value for others, which can be financial, cultural, or social.”
This historical background certainly explains why we are inclined to associate entrepreneurs with self-employed business owners. But as the recent definition by the European Commission would suggest, there is more to entrepreneurship than starting your own business.
Why does this matter anyway?
It matters because there is a lot we can learn from the process of business creation and from founders that is applicable to our own lives.
These lessons are especially relevant in our current times, which are defined by constant change and high uncertainty. Notice the similarities? Businesses and founders have always operated in and navigated constantly changing and unpredictable environments. How have they been able to do that? It turns out that people who start companies share a similar mindset and a set of specific personality traits, attitudes and skills. These are often referred to as entrepreneurial skills or entrepreneurial mindset. Best of all? We now know that these are skills that can be learned and we can train ourselves to build an entrepreneurial mindset.
So if you build the necessary skills and embrace the mindset, you can start your own business and become self-employed. Entrepreneurship then is in fact about starting a company; why the confusion?
Because there is more to it. Starting your own company is one part of entrepreneurship, but entrepreneurial skills, as it turns out can be applied in all aspects of your life.
Here’s why: some researchers on this topic have put forward a definition of entrepreneurship as value creation. I really like this perspective and its one I often take when talking about and teaching entrepreneurship. Why do I like it? Because value creation is in fact at the core of entrepreneurship and it can span across all domains. You can create value for others through a business, but also by taking on new initiatives in your current place of work or in your personal life.
Through their ventures, founders are offering solutions to important problems faced by individuals or organizations. Their business venture is the way they create value for those around them. Think Shopify who creates value for the entrepreneurs through their product, as well as economic value for themselves and the countries they operate in. A business venture however, is not the only way to create value. You can do so through a social venture, by starting a new club, organizing a fundraiser, putting together a school play and so many other ways.
What do all of the above initiatives have in common aside from value creation? They all require a similar skillset and attitude to carry out. These skills include first and foremost, opportunity-identification, action-taking, determination and resilience.
Creating value is the key here. We as individuals should all strive to put value creation at the centre of our lives regardless of what we are doing. Why? Because working on something you know will bring value to those around you is highly engaging and motivating. Most importantly, however, it gives meaning and purpose to our existence, which in turn leads to greater satisfaction and happiness. After all isn’t the purpose of life, a life of purpose?
So what is entrepreneurship and what does it mean to be entrepreneurial? Entrepreneurship is about creating value for those around you and being entrepreneurial means having the skills and mindset you need in order to identify opportunities, take action and persevere in the face of challenges.
