What Is An Entrepreneur? Are You One?

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I am not sure what an entrepreneur is. But it’s not for lack of trying to figure it out.

After all, some might say I am an entrepreneur and should know what they are. How so? Since 1994, I’ve run my own high-tech strategy consulting and venture capital firm. Since 2002, I’ve taught at America’s top-ranked undergraduate entrepreneurship school, Babson College. And I have interviewed over 150 start-up CEOs for my forthcoming book, Hungry Start-up Strategy.

You could use a crisp definition to help you figure out whether you are an entrepreneur. So why is it so hard for me to provide that crisp definition?

Here are three questions that lead to my confusion:

  • Is entrepreneurship innate or can it be taught? It seems to me that answer may be both. Babson College does not admit everyone who applies. It picks people who have demonstrated by the time they apply, that they done things that demonstrate entrepreneurial potential. I’d guess those include the desire and ability to start and lead an organization, relentless curiosity, an unwillingness to accept conventional wisdom, and discomfort with the political dynamics of a big company.
  • Is entrepreneurship something that happens in small companies or in both large and small? Entrepreneurship obviously happens when someone starts a new company. But many people do entrepreneurial things in big companies and then run start-ups after their founders depart.
  • Do entrepreneurs need college and work experience before launching a venture? There are well-known cases of people who dropped out of college and turned out to be successful entrepreneurs — Bill Gates, Steve Jobs, and Mark Zuckerberg come to mind here. But for many entrepreneurs, 10 years of experience helps them develop networks and find a problem within an industry that they believe they can solve better than anyone else.

The ultimate test of whether you are an entrepreneur is how you feel when you are doing entrepreneurial activities. If those activities make you happier than if you are working in a clearly-defined role as an employee of a large organization, then you are an entrepreneur.

Before getting into the details of those activities, though, let’s define entrepreneurial success. If that means making a bundle of money so you can play golf or sail, then entrepreneurship can certainly get you there.

But my own perspective — reinforced by interviewing them – is that start-up CEOs have a hunger to solve problems that they find meaningful. And if they are working hard on those problems, they are happy and feel successful.

So what do entrepreneurs do exactly? In the simplest terms, they see opportunity and seize it. If they can see that opportunity and grab the lion’s share before competitors do, then they are likely to become successful in both senses I described above.

More concretely, entrepreneurs build products and the organizations needed to link those products to people who will pay for them. In order to do this, entrepreneurs must be right about six critical choices:

  • Setting goals;
  • Picking markets;
  • Raising capital;
  • Building teams;
  • Gaining market share; and
  • Adapting to change.

If you are already in an entrepreneurial role, you know whether you are good at this and whether it makes you happy. But if you are not doing start-up work now, how do you know whether you should be doing it?

One way to look at this is from the perspective of whether a venture capitalist would invest in you. To that end, I interviewed about a dozen of them. And I’d distill their perspective down to considering whether your prior experience would enable you to make the case for affirmative answers to these five questions:

  • ­Do you have superior industry knowledge and a compelling vision for your start-up’s future?
  • ­Do you have a winning track record and the passion to keep winning?
  • Are you smart, curious, and a doer of frugal, fast experiments?
  • Can you identify and manage business risk?
  • Do you have charisma, integrity, and the ability to attract, hire and motivate top talent?

If you can convince a venture capitalist that the answer to all these questions is Yes, then you’re an entrepreneur. If not, maybe you should stick with your current job.

Paul Champion

📱: 07540 704920

Twitter: @blogapprentice
Skype: paulchampion31

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