There are many definitions of entrepreneurship. Being an entrepreneur myself and working with many other entrepreneurs for over 30 years, my answer would be:
Entrepreneurship is about the mindset of an individual who takes action towards a desirable future.
There are 3 core types of Entrepreneurship today:
- Business Entrepreneurship
- Social Entrepreneurship
Where does Entrepreneurship come from
The word entrepreneur (ˌɒntrəprəˈnɜː; French ɑ̃trəprənœr) comes from the French word ‘entreprendre’, meaning ‘to undertake‘.
You could rightly think that the direct translation of ‘entrepreneur’ into the English language would mean ‘undertaker’. I don’t think that this is the real meaning, but it explains why we kept the French word ‘entrepreneur’.
In German, the word is ‘Unternehmer‘, which means a person who makes things happen. There is also the word ‘Unternehmen‘ which loosely means company or organization.
In Spanish the word is ‘Empresario’ which means something like ‘business person’ and is strongly related to the word ‘Empresa‘, meaning ‘business’.
The verb ‘to undertake’ doesn’t necessarily relate to a business. What it actually means is that entrepreneurs take actions into their own hands and make things happen. But when looking at the different translations, it is easy to understand why most people translate the word ‘entrepreneur’ as ‘business person’.
That is also why we started to use words like intrapreneur or social entrepreneur to differentiate from the basic meaning of ‘business person’. None of those words are clearly defined either and the explanations found on Wikipedia and the sorts vary a lot. I give you my take on this in this article.
In the past, in some countries in Europe, an entrepreneur was a small business owner, mainly active in the outdoor. For example, a gardener running his own business was seen as an entrepreneur, while an accountant starting his own business was not. In many European countries, the word entrepreneur related mainly to blue-color businesses. This has changed today and entrepreneurship is pretty much the same all over the world.
In its essence, all entrepreneurship-types are very similar, but the direction, goal and core values might differ. Let’s have a look at them:
The Business Entrepreneurship
Driven by creating a successful business, this is the most common type of entrepreneurship. The idea is to create value in exchange for financial means for the good of its shareholders. In a Business Entrepreneurship, a shareholder can be any other organization or individual.
This might sound egoistic, especially when you compare it with other entrepreneurship types. However, it doesn’t mean the profits of the company or organization cannot be put to good use. Most employees rely on these types of entrepreneurship for their job, income, and pension and historically, those businesses reward success with higher wages and a good career path.
Business Entrepreneurship is based on a direct exchange. Two parties are involved, the giver and the receiver. Depending on how you look at it, the client or customer is the giver and the business (shareholders) is the receiver.
Businesses can be privately owned and can distribute earnings to employees or shareholders. In most countries, Business Entrepreneurship has its own type of company formation, rules, and laws.
The Social Entrepreneurship
Often seen as a charity or non-profit organization, and similar to Business Entrepreneurship, Social Entrepreneurship is based on creating value in exchange for financial means for the good of a social cause.
The aim is to generate profit to finance or support social causes. There are many organizations out there working in the Social Entrepreneurship space, with names like WWF (World Wide Fund), Oxfam and Care, just to name a few big ones. There are so many more and most of them do some amazing work.
If you look at my definition of Social Entrepreneurship, you will see that I mention that the profit goes towards social causes. Profit is whatever is left after all expenses and taxes are paid, including salaries. Depending on the costs of the business, the profit might vary. That is also why organizations in the Social Entrepreneurship space do less attract career-driven employees and are managed very differently. Of course, there are always exceptions.
Non-profit organizations have founders but do not have private owners and they do not issue stock or pay dividends. Also, directors or officers of a non-profit organization are not paid. Only employees who hold a position and provide a service to the organization can be paid a salary. In most countries, Social Entrepreneurship has its own type of company formation, rules, and laws.
Intrapreneurship is the latest form of entrepreneurship.
Intrapreneurs are described as entrepreneurs working within the confinement of an existing company in order to advance the company’s business or to find new business opportunities.
In most cases, those people are employees with the right mindset and skillsets to explore new ways for the organization to create business and make a profit.
Many large organizations realize that more and more small businesses created by amazing entrepreneurs taking away large portions of their business. This is a new phenomenon, specifically for the really large and older organizations.
There have quite a few that paid the price. Think of Nokia, MySpace, and the sort. And in business terms, they were all very young.
One way of combating this issue is by buying those young companies and integrate them into the organization. This goes wrong more often than it works. It is like putting the latest high-powered engine into an old car. They are just not made for each other.
The other way is to keep working on, updating, upgrading and refining the old car, and having the best of both worlds, an up-to-date car with the latest engine. For that, those companies employ intrapreneurs. For some of those companies, it works really well. For others its a disaster.
It’s still very new and because entrepreneurship, as it is today, is still very young, the older organizations don’t know yet how to handle it. If they employ someone, they look at their CV, University degree and experience.
For an entrepreneur, there is no degree and experience is mainly learned lessons based on failures. This is hard to sell and hard to measure. Some Universities together with other schools realized this problem and started to introduce curriculums in entrepreneurship. But it is not in the drop-down list of the companies job application form yet.
Which type is for you?
The easiest way today to become an entrepreneur is by stepping into the world of Business Entrepreneurship. It has the least restrictions and the most possibilities of all types.
If you truly believe in a social cause, Social Entrepreneurship is an option. But you will face many restrictions and rules depending on the country you live in, but it also comes with some great advantages. If a social cause is your thing, you must look into it.
Starting your own business comes with a lot of work and you will need to deal with things far outside of what you actually want to do. If that worries you, have a look at Intrapreneurship. If you invested some time in learning the skills of an entrepreneur, it shouldn’t be hard to identify the right company you could be of real value for. As an Intrapreneur, you have the support of the organization for all the things outside of your knowledge space and you can fully concentrate on the task ahead. This could be the right thing for you.