We live in a golden era of startup enterprises and entrepreneurship. In the past few years, the world has seen rapid growth of technology-led businesses and digital solutions. You’ve probably heard about Silicon Valley—the place where it all started. Many of the leading and groundbreaking innovations were incubated there. While there have been several successful startups, there have also been many instances where entrepreneurship has gone wrong. Many businesses shut shop even before they can take flight.
While technology has accelerated the growth of enterprises, there are several other factors that influence entrepreneurial ventures. Read on to explore what is entrepreneurship and the role of entrepreneurship in today’s digitally-driven industry.
An Introduction To Entrepreneurship
The role of entrepreneurship in changing the business landscape has been phenomenal. Entrepreneurial development has led to more employment opportunities, higher standards of living and visible impact. The word ‘entrepreneur’ has its roots in a French word—enterprendre—which means to undertake. Entrepreneurs are the ones who undertake the risk of doing something new.
The meaning of entrepreneurship is rooted in developing and managing a new business venture by taking risks in the corporate world. In other words, it refers to the ability to develop, organize and run a business enterprise to make a profit. In terms of economics, entrepreneurship utilizes land, labor, resources and capital to succeed in an ever-changing and competitive marketplace.
Here are some real-life examples of entrepreneurship.
Uber Technologies revolutionized transportation by giving a new direction to the taxi industry. By using the existing driver pool as independent contractors, they grabbed a massive market share and attracted good investment.
In 2006, Disney purchased Pixar instead of creating its own studio to compete with it. It was a lucrative arrangement as plenty of Pixar movies were global blockbusters and Disney maximized its profits.
Tesla is known for its electric cars. Although the target customers are limited, the enterprise enjoys a large market share and high profit margins.
What Are The Features Of Entrepreneurship?
Let’s look at the various features of entrepreneurship that make it a successful and sustainable means of growing a business.
The willingness to take risks is the essence of entrepreneurship. Not every business idea gets support, funding or recognition. There is a considerable amount of failure risk when it comes to building something from the ground up. As an entrepreneur, you need to be prepared for all kinds of risks and have measures in place to tackle them. You need to prioritize risk evaluation.
Creativity And Innovation
Starting a new venture means coming up with a new business idea. For an enterprise to be financially sound, you need the support of investors. Without something unique, it’s highly difficult to get funding. Therefore, planning to launch a new product in the market automatically pushes you out of your comfort zone and forces you to engage in innovative thinking.
Converting a business idea into a product or service requires resources and effort. There is a lot that goes into establishing an enterprise—funding, hiring and understanding the requirements of clients and customers. To drive your vision and mission, leadership qualities become paramount. You need to be able to communicate and guide your employees in the right direction.
Open-mindedness and flexibility are the most important features of entrepreneurship. An entrepreneur should be open to change and have the power to adapt quickly. For example, if you launch a new product in the market and there are several user complaints, you should keep an open mind and pay attention to the feedback. Consider it when you update your product.
A key goal of a majority of enterprises is to generate profit. However, in order to drive profits and enhance business growth, you need to pay attention to changing industry and market trends. Being accountable and meeting the needs and expectations of your customers and clients is a vital part of entrepreneurship.
Different Types Of Entrepreneurship
Although profit is the chief motivator in entrepreneurship, it sometimes focuses on other aspects such as solving a problem or creating an impact. Let’s see how the role of entrepreneurship changes with these different motivations.
Socially conscious businesses are focused on solving problems related to education, food and economic inequality. The primary goal of such businesses is to raise funds for society’s benefit and work towards development in specific areas such as health, community development, poverty alleviation. They are sometimes referred to as nonprofit organizations.
This type of entrepreneurship involves new inventions and ideas. Firms aim at delivering unique products or services that other businesses haven’t covered. Innovation entrepreneurship often relies on technology and needs significant investment to get off the ground.
Big Business Entrepreneurship
Big businesses have defined life cycles. They grow and thrive in the market by providing new and innovative products that relate to their main product. They try to expand their customer base, gain new market shares and attempt to meet changing industry demands. Several businesses have been known to purchase smaller organizations and delegate innovation.
Small Business Entrepreneurship
Local restaurants, pop-up stores and dry cleaners are a few examples of small business entrepreneurship. Such businesses rely on providing new and enhanced versions of their existing products and services. Profits are primarily used for sustaining instead of scaling and expansion.
Scalable Start-Up Business Entrepreneurship
This type of entrepreneurship is rooted in a vision and mission of changing the world. Start-up entrepreneurs attract investors who will believe in their dreams, support them and help them think outside the box. The model is both experimental and scalable, which is why it’s crucial to hire the right people to support the founder’s dream. They’re answerable to stakeholders who want a return on the capital invested.
What Is The Need For Entrepreneurship?
Entrepreneurship isn’t easy; in fact, a majority of businesses fail but that shouldn’t stop you from pursuing your dream. It’s an instrument of social change and has proven to provide continuous opportunities for growth. It plays a vital role in the economy and encourages people to bring new and innovative ideas to market. Here are several factors that highlight the need for entrepreneurship in today’s fast-paced world.
A majority of entrepreneurs solve challenges in society through technological innovations. For example, TartanSense—a Bangalore-based startup provides an AI-based Robot vehicle to be used in farms for weed management. It reduces chemical usage and helps farmers avoid unnecessary costs.
Entrepreneurship generates employment. Once a new business gets launched, it requires people who can drive that mission and vision forward. Entrepreneurs take the risk of employing even themselves. As the business continues to grow, the need to hire more people also increases. Take any leading education technology startup for example. Some of them have become unicorns (reached a valuation of $ 1 Million) and opened branches across the globe.
Improves Standard Of Living
Entrepreneurship increases income levels, therefore improving standards of living. Entrepreneurs identify challenges in the lives of customers and provide appropriate business solutions. Additionally, they hire new employees who receive remuneration and this income gets circulated in the economy. All of the spending and salaries generate incremental wealth, therefore improving standards of living.
Introduces Visible Change
You need to dream big and take risks if you want to be a successful entrepreneur. As you progress to solving existing challenges and gaps in society, you take responsibility for impacting various sections of society. A majority of businesses strive to make the world a better place by contributing to socio-economic development through their products and services.
Contributes To Research And Development
New products and services need to be tested before they can be launched. In the process, entrepreneurs are encouraged to invest their resources into effective research and development. Even after businesses get funding, entrepreneurs continue to prioritize research and development by creating educational institutes. This further encourages the next generation of entrepreneurs to take risks and pursue their dreams.
The Bottom Line
Every entrepreneur has their own reason that drives them to being their own boss. If you want to become more confident and take initiative and risks, turn to Harappa’s Leading Self course. This leadership and management course will help you become the best possible version of yourself. Embrace opportunities for growth and learning with the Ladder of Learning framework. Navigate obstacles and recognize areas of improvement with the Iceberg Model. Find your entrepreneurial spirit and don’t be afraid of turning your dreams into reality!
Explore Harappa Diaries to learn more about topics related to the LEAD habit such as Factors Influencing Self-Esteem, Leadership Qualities That Make A Good Leader, What Are Life Skills, Key Employability Skills In Today’s World & Guide to Personal SWOT Analysis to take charge of your personal and professional growth.