Does it matter what an entrepreneur is?
While working on building entrepreneurial infrastructure and participating in an entrepreneurial ecosystem we often discuss what an entrepreneur is. Does this question even matter?
With the many definitions of entrepreneur in use, it may be best to go to the authority which is the Oxford English Dictionary (OED). In an economic context, entrepreneur dates back to 1852 with the following definition.
“One who undertakes an enterprise; one who owns and manages a business; a person who takes the risk of profit or loss.”
This definition fits nicely with the four quadrants defined in the book "Beyond Collisions", Mainstreet, Microenterprises, Innovation Led and 2nd Stage.
The first question is why include Main Street and Microenterprises as entrepreneurs? Why not just focus on the primarily technology driven enterprises? The reason is that all of the various types are needed to create and sustain a vibrant community.
Another good question to ask is why separate entrepreneurs into types. The primary reason is to more tightly align each type with the community's infrastructure that best meets their needs.
The Four Types
The Main Street businesses are those that provide services to a local community and help to define the community's cultural character. These businesses form the largest segment of the local economy.
Microenterprises are businesses frequently started by freelancers, retiress or otherwise displaced workers. These businesses have low start-up costs, typicall below $35,000 and may need assistance with basic business operational skills.
Innovation-led entrepreneurs typically cluster around research centers and universities. This is the type of start-that is meant in the blog "It Takes 50 Million to Create One Startup". Often times these start-ups are willing to trade equity for the substantial capital investments they require.
The second-stage enterprises are defined as those that have survived the start-up phase and are growing and expanding. These enterprises have between 10 and 99 employees and annual revenues of at least 1 million up to 50 million. This type provides the strongest economic foundation and the most significant economic impact.
As we continue to identify and map our entrepreneurial support infrastructure we need to identify which type of entrepreneur they support. Doing this will help us to direct our start-up businesses to the most appropriate asset.
By the way my favorite definition of an entrepreneur is a person willing to approach failure in order to find success.