What is Entrepreneurship?

What is entrepreneurship? Entrepreneurship is the set of skills you build up when you set up and run your own business. Since managing lots of different things requires some kind of knowledge – how to manage money, how to sell, how to keep customers happy – you develop an amazing set of skills.

This two-year old explains it quite well…

Cute. The kid covers seven key points in his mini-seminar; entrepreneurship is:

A way of thinking and acting

Entrepreneurs think in terms of problems and profit. If people can’t communicate well enough with each other, we’ll invent the PC and mobile phone – and find a way to make people pay for it so we get a reward.

If we find a “profitable problem”, we’ll take action in order to come up with a solution, and sell it. Of course, searching for problems and profit leads entrepreneurs to become…

Opportunity Obsessed

Scouting around for the next opportunity, the next idea, that brainwave which will start them on the path to starting a business venture to solve the problem and make money.

Holistic in Approach

Holism means “whole” or “all”. Basically, entrepreneurs cover all the bases – from handling money to handling customers to advertising campaigns and more. Entrepreneurs must be able to cover all the different parts of a business

Leadership Balance

Entrepreneurs will set up a clear chain-of-command so people within a business will know who to report to. They’ll also be able to lead other people – employees – in their business, without treading on each others toes. Having a clear leadership structure means businesses can get things done.

Purpose of Value Creation

Value creation is essentially taking something simple and basic, and turning it into something else which means more to someone else:• Apple turns steel, glass and silicon into an iPhone – which has a massive increase in value.• Cadbury’s turn cocoa beans into delicious chocolate – an even better increase in value• Starbucks turn ground coffee beans, not just into a hot drink in a cup, but make an entire experience out of it. You sit down in a comfy chair, surrounded by newspapers with wifi… and relax with your cup of coffee

Value creation means adding value to customers; value which they’ll exchange money for, so the business adds value (literally) in the form of money.

Value Capture

This is essentially trying to control what is valuable to other people. Multi-touch phones and other innovations were important to phone users Apple reckon. As a result, they take out dozens of patents on designs so other companies can’t use them, so if people want one type of patented feature, they can only go to Apple.

This “value” is now captured in the sense that all the money that people would want to exchange for that thing valueable to them must go to Apple – or whoever.

(I'm not Apple obsessed; they just give good examples!)

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