How Your Definition Of Entrepreneur Can Limit Your Success

The word entrepreneur is used so often in so many different contexts these days that pinning it down is virtually impossible.  Everyone has their own definition, and the one you adopt—or unconsciously accept—can determine your aspirations, dictate your behavior, and in some instances cause you to underperform or fail outright. It’s a classic self-fulfilling prophecy—you’re likely to get what you expect to get.

Among the many definitions of entrepreneur, six currently dominate the popular press, the how-to literature and business education—and loom large in the popular imagination. Each definition, in its own way, can be both empowering and pernicious. Here’s what to look out for:

The Noble Founder.  This would appear to be the simplest definition of all: if you start a business, you’re an entrepreneur, regardless of whether it succeeds. Today, there are over 16 million people attempting to start over nine million businesses in the U.S. But even this apparently simple definition brings with it some significant psychological baggage.  People who associate themselves with this definition often feel a deep sense of pride in their willingness to even try to start a business.  But that understandable pride in taking on the struggle can also mean a too easy acceptance of poor results. Inside the noble founder lurks the noble failure.

The Self-Made Success. Some definitions bestow the title of entrepreneur only upon people who have started a successful business, or at least one from which they earn a decent living. People who see themselves this way can feel a bit proprietary about the definition. To them, everyone who is struggling to make a living is merely an “aspiring” entrepreneur.

Only 30 to 40 percent of startups ever achieve profitability. In the world of Silicon Valley high-risk startups, the chances of reaching profitability plummet to less than one in a hundred. The self-identity of people who feel success is an essential part of what it means to be an entrepreneur are proud of the self-sufficiency they achieve or at least seek. They are more likely than noble founders to keep their eye on the bottom line, but they also can be overly fearful of risk and can underperform in terms of innovation.

The Entrepreneur by Temperament.  In this view, entrepreneurship is a state of mind. It can apply equally to people starting a business or people working in corporate settings. It’s all about mindset: such people “make things happen,” “push the envelope,” or refuse to stop until they get what they want. It is the broadest of definitions. In fact, Ludwig Von Mises, a member of the Austrian school of economics, theorized that since we all subconsciously assess the risks of our actions relative to the rewards we expect to receive, we are all entrepreneurs. Because this definition applies to everyone, anyone can delude themselves into believing they are an entrepreneur. You don’t even have to start a business. You just have to behave a certain way, let the chips fall where they may.

The Opportunist Par Excellence. For at least a century, entrepreneurs have described themselves as having the ability (a skill, not a state of mind) to “smell the money.” There are indeed many entrepreneurs who proudly identify their ability to spot money-making opportunities. But it wasn’t until the economist Israel Kirzner, in the mid-1970s, described the core of entrepreneurship as opportunity identification that academics began to study it as a process and a skill. Entrepreneurial education today is often targeted at teaching opportunity identification skills.

What is interesting is that there is no strong evidence, after several different studies, that entrepreneurial education actually results in students or attendees having a significantly higher chance of reaching profitability. Perhaps opportunity-spotters can overextend themselves by doing multiple startups or product launches simultaneously, a problem that can be compounded by a lack of synergy among these disparate efforts.

The Risk-taker: Frank Knight, one of the founders of the highly influential Chicago school of economics, drew an illuminating distinction between risk and uncertainty. With risk you can predict the probability of various unknown outcomes of business decisions. With uncertainty you not only don’t know the outcomes but also you don’t know the probability of any particular outcome occurring. In other words, risk can be managed, but uncertainty is uncontrollable. Knight argued that opportunities for profit come only from situations of uncertainty.

To succeed as an entrepreneur, you must therefore seek out uncertainty. Today, few entrepreneurs know of Knight’s thesis, but many nonetheless proudly describe themselves as “risk-takers.” This identity can lead to taking on more risk than necessary, especially when you see all risk as good and see yourself as an adventurer into the unknown. You would be better advised to think of your adventures as a series of small calculated experiments that turn the greatest uncertainties into knowable risks.

The Innovator: Joseph Schumpeter’s description of entrepreneurs as innovators who participate in the creative destruction that constantly destroys old economic arrangements and replaces them with new ones has appealed to many observers, including economists. That concept is often naively married to Clay Christensen’s notion of disruptive innovation of industries and markets.

See, for example, Zero to One by PayPal cofounder Peter Thiel. This fetishizing of disruption has led many entrepreneurs to invoke the concept of innovation in support of whatever they want to do, no matter the effects it might have on society like creating a “gig economy” of low-paid workers. Seeing yourself as an innovator and regarding innovation as an unquestioned good is arguably one of the most dangerous definitions of all because it simultaneously encourages great boldness and justifies equally great moral blindness. It also results in passing over opportunities to create valuable and socially beneficial businesses that were less than truly disruptive.

All of these definitions of entrepreneur are self-limiting. How you define yourself as an entrepreneur also defines what actions you’ll take to view yourself as deserving of the title. But the only two things academics have ever been able to show conclusively correlate to entrepreneurial success (measured generally) are years of schooling and implicit, core motivations that align with feeling good about getting things done (known as “need for accomplishment”). Pinning your identity to any of the current definitions of entrepreneur will only set you back.

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I am a successful entrepreneur who researches and teaches entrepreneurship, creativity and innovation, at Princeton University. My two bestselling books on entrepreneurship, “Building on Bedrock: What Sam Walton, Walt Disney, and Other Great Self-Made Entrepreneurs Can Teach Us About Building Valuable Companies” (2018) and “Startup Leadership” (2014) focus on what it really takes to succeed as an entrepreneur and the leadership skills required to grow a company. Prior to joining the Princeton faculty, I was founder and CEO of iSuppli, which sold to IHS in 2010 for more than $100 million. Previously, I was CEO of global semiconductor company International Rectifier. I have developed patents and value chain applications that have improved companies as diverse as Sony, Samsung, Philips, Goldman Sachs and IBM, and my perspective is frequently sought by the media, including the New York Times, Wall Street Journal, Economist, Bloomberg BusinessWeek, Nikkei, Reuters and Taipei Times.

Source: How Your Definition Of Entrepreneur Can Limit Your Success

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When we help youth to develop an entrepreneurial mindset, we empower them to be successful in our rapidly changing world. Whether they own a business or work for someone else, young adults need the skills and confidence to identify opportunities, solve problems and sell their ideas. This skillset can be encouraged and developed in elementary schools, with the immediate benefit of increased success in school. In this talk, Bill Roche shares stories of students that have created their own real business ventures with PowerPlay Young Entrepreneurs. He illustrates the power of enabling students to take charge of their learning with freedom to make mistakes, and challenging them to actively develop entrepreneurial skills. Bill also showcases the achievements of specific students and shares how a transformative experience for one student has been a source of inspiration for him over the years. Bill Roche specializes in designing curriculum-based resource packages related to entrepreneurship, financial literacy and social responsibility. Bill worked directly in Langley classrooms for over ten years and now supports teachers throughout the country in creating real-world learning experiences for their students. Over 40,000 students have participated in his PowerPlay Young Entrepreneurs program. The program’s impact has been captured in a documentary scheduled for release early in 2018. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at https://www.ted.com/tedx

How Effective CFOs Are Driving Companies to Success and Profitability

For more than 30 years, there have been articles touting the CFO as someone who “needs to be strategic: a business partner and not just a bean counter.”

Business writers still publish these articles today, but it’s time to stop. CFOs know they need to be strategic, and they know they need to operate the finance function. They don’t need an article to tell them that anymore. They do, however, need clear vision and technology to help them juggle new balls in the finance ecosystem: regulatory changes, artificial intelligence and Blockchain. Finance must add these balls to its mix while still juggling its “traditional” responsibilities of internal controls, compliance and closing the books quickly.

The future of finance is chockablock with new regulations, technologies and business models. The CFO must handle responsibilities beyond the finance function. They must also use strategic skills to transform the organization. Using the old, heavy, rigid ERP offerings will not provide the tools to nimbly break out of the “Old CFO” role.

This eBook provides a guide to the new technologies every CFO needs to succeed as well as a strategic framework for balancing traditional CFO responsibilities with their new, highly strategic ones.

By: Oracle View

 

Source: How Effective CFOs Are Driving Companies to Success and Profitability | Inc.com

TED – Why The Secret To Success Is Setting The Right Goals by John Doerr

Our Managers and institutions are failing us, but it’s not always because they’re bad or unethical, says venture capitalist John Doerr — often, it’s simply because they’re leading us toward the wrong objectives. In this practical talk, Doerr shows us how we can get back on track with “Objectives and Key Results,” or OKRs — a goal-setting system that’s been employed by the likes of Google, Intel and Bono to set and execute on audacious goals.

Learn more about how setting the right goals can mean the difference between success and failure — and how we can use OKRs to hold our leaders and ourselves accountable. Check out more TED Talks: http://www.ted.com The TED Talks channel features the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes (or less). Look for talks on Technology, Entertainment and Design — plus science, business, global issues, the arts and more.

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