An entrepreneur is seen not only as someone who started their own business, but also someone who has started their own venture and struck it on their own. This is correct, as the formal definition of entrepreneurship is the process of starting a business or an organisation for profit or social needs. After defining entrepreneurship, it’s now important to define who an entrepreneur is and what they do.
An entrepreneur is someone who develops a business model, acquires the necessary capital, and operationalises it, and is responsible for its success or failure. The entrepreneur is distinct from the professional manager because the former either invests their resources in case of success whereas the latter does the job assigned to them for a monetary consideration. The entrepreneur is the risk take and an innovator, in addition to being a creator of new enterprises whereas the professional manager is simply the executor.
Attributes of entrepreneurs
An entrepreneur needs to be an innovator who has a game-changing idea or a new concept that can succeed in the crowded marketplace. Investors tend to invest in ideas and concepts they feel would generate adequate returns for their capital and investments and, therefore, the entrepreneur needs to have a truly innovative idea for a new venture.
The entrepreneur also needs to have excellent organisational and people management skills as they have to build the organisation or venture from scratch and has to bond with their employees as well as other stakeholders to ensure success.
On top of this, the entrepreneur needs to be a leader who can inspire their employees, as well as be a visionary and a person with a mission as it’s important they motivate and drive the venture. Leadership, values, team-building skills, and managerial abilities are the key skills and attributes that an entrepreneur needs to have.
Creative destruction and entrepreneurship
Creative destruction refers to the replacement of inferior products and companies by more efficient, innovative, and creative ones wherein the capitalist market-based ecosystem ensures that only the best survive whereas others are blown away by the gales of creative destruction.
Entrepreneurs with game-changing ideas and the necessary skills and attributes needed to succeed ensure that their products, brands, and ventures take market share away from existing companies that are either not creating values or are simply inefficient. This process of destroying the old and inefficient through newer and creative ideas is referred to as creative destruction.
An entrepreneur is a risk taker
Unfortunately, not all entrepreneurs are successful as they can become victims of creative destruction or due to a lack of other traits. When ventures fail, the obvious question is who takes the blame for the failure and whose money is being lost. The answer is that the entrepreneur puts their money in or raises capital from investors, so if the venture fails the entrepreneur and investors lose money. The employees and the professional managers lose their jobs and unless they’re partners in the venture, their money isn’t at stake. This means that the entrepreneur is the risk taker, which means the success or failure lies with them.
Some famous entrepreneurs
These famous examples of entrepreneurs have succeeded despite heavy odds because they’ve had the necessary traits and skills to make them legendary. For example, both the founder of Microsoft, Bill Gates, and the late Steve Jobs, the founder of Apple, were university dropouts. Though their eventual success meant that they not only had innovative ideas, they were also ready to strike it out for the longer term and hang on when things got tough.
The founder of Facebook, Mark Zuckerberg, as well as Google’s Larry Paige and Sergey Brian can be considered as truly revolutionary entrepreneurs. What all these people have in common is that they had vision and the sense of mission that they were going to change the world with hard work, perseverance, and a nurturing ecosystem.
Entrepreneurship needs a nurturing ecosystem
Just as entrepreneurs cannot succeed if they lack the necessary attributes, they cannot succeed even if they have them but live in an environment that doesn’t encourage risk or tolerate failure or, more importantly, they don’t have the monetary and human capital needed for success.