The word entrepreneur was originally a loan word from French. It indicates a person who launches a venture or enterprise and accepts full responsibility for the outcome. The word in French is believed to have been termed by Jean-Baptiste Say, an economist. He defined an entrepreneur as “one who undertakes an enterprise, especially a contractor, acting as intermediary between capital and labour.”
This initial definition of an entrepreneur suggests it is a person that works primarily as a middle man who is able to place him or herself between the creation of a thing and the final consumer. It makes an entrepreneur simply one who uses the asymmetry of information (the fact that the end user doesn’t know where to buy the thing they want) in order to add a premium to the initial cost. This premium is called profit.
Such a definition is true in many cases but is an inaccurate description for the complex economic environments of the Twenty-first Century. An entrepreneur can also create a market where one never existed before. An entrepreneur on the internet can set up a ‘shop’ that buys for a lower price in bulk and sells for a higher price to the consumer. An entrepreneur can also be a programmer who writes a software program and sells this software application to the general public. Steve Jobs was an extraordinary entrepreneur and yet he was also a pioneer of computer technology. He knew which business ventures were likely to succeed because he was an innovator. He was creative.
The new definition of an entrepreneur is a person who takes a risk and also a person who seeks to create value. If a consumer perceives value in a product or service he or she is tempted to buy. An entrepreneur is a person who studies the market closely and looks for the gaps. For where more value can be given. He or she then strives to raise the capital to set up a business in order to fill that gap. The entrepreneur in this day and age of cross-disciplinary education may well be the person who helps create the product, and not just market it.
As the nature of business changes the skills required from a successful entrepreneur changes. As well as having leadership and management skills, and financial understanding, the modern entrepreneur must have an acute antenna for change. We are now in the information age. The notion of the asymmetry of knowledge is getting weaker by the day. People can find the information that they want online. They can order online. The notion of the middle man is fading fast. The new model is affiliation. You make other people do your selling for you by offering commissions. The role of the entrepreneur is less about being the intermediary between capital and labour but rather about being the facilitator for others to be the intermediary.
As a result, one of the key skills of the new entrepreneur is the skill of delegation. Those who want to horde all the keys to the castle will ultimately fail. Knowledge should not be guarded zealously but rather shared with the team and incentives offered to those who can refine and improve.
The consequence of this paradigm shift in entrepreneurism is a need to alter the structure of ownership. The idea of private ownership or ownership by means of shares in a public company needs to be amended. The most successful businesses of the future will resemble more cooperatives. Those who drive the venture forward to success will be those who are remunerated. The present failure of the European and American banking systems is that they have started rewarding failure not success. No true entrepreneur would stomach such stupidity.
The purpose of this website is to give people access to new ideas about products, services and business in general. We are striving to emulate the value that true entrepreneurs give. It is no longer about coveting information but rather about sharing information and looking for partners who have the right skill set to drive an idea forward to make it a reality. Another avenue worth exploring is the Entrepreneur Magazine website.