Elastic Definition: Entrepreneurship is a flexible concept, often used to refer to various entities from venture capital-backed startups to small businesses and even corporate efforts.
Howard Stevenson's Definition: Entrepreneurship is defined as the pursuit of opportunity beyond resources controlled.
Components of Stevenson's Definition
Pursuit
Implies a focused and urgent approach.
Entrepreneurs often experience a sense of urgency due to limited resources and time.
Opportunity
Novelty is key: opportunities are novel when they involve:
Truly innovative products.
New business models.
Better/cheaper versions of existing products.
New customer segments for existing products.
Opportunity types can overlap.
Beyond Resources Controlled
Involves working with limited resources initially, often bootstrapping.
Entrepreneurs must eventually mobilize more resources than they control.
Risks in Entrepreneurship
Demand Risk: Will customers adopt the solution?
Technology Risk: Are breakthroughs needed?
Execution Risk: Can the entrepreneur build the necessary team?
Financing Risk: Will external capital be available?
Strategies to Manage Risks
Lean Experimentation: Use of minimum viable products to test hypotheses with limited resources.
Staged Investing: Incremental resource commitment as milestones are met.
Partnering: Sharing and shifting risks with other organizations.
Storytelling: Inspiring resource holders with visions of the venture's potential impact.
Importance of the Definition
Entrepreneurship as Management: Highlights entrepreneurship as a management approach rather than a lifecycle stage, specific role, or personality trait.
Guidance for Entrepreneurs: Provides tactics for risk management and resource mobilization.
Practical Implications
Entrepreneurs are encouraged to be innovative, creative, opportunistic, and persuasive.
Stevenson's definition helps entrepreneurs focus on managing risks and leveraging limited resources effectively.