The Definition of Entrepreneurship
The following is an article I've published on Medium
https://medium.com/ascending-paradigms/the-definition-of-entrepreneurship-2b9e08cbe998
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I want to start out by stating an important truth that I believe. One that I’m sure most people reading this will disagree with; unless you’re JayZ.
Genius level ability to be inspired, passionate, and make great change exists in every person.
It exists and it always has, however there have been limiting beliefs and circumstances that have gotten in the way. This belief has been true, is true now, and will continue to become more evident in the future.
In the past, these limiting beliefs and circumstances were so overwhelming that it would have been impossible for most to get out from underneath such restrictions, to have a chance at thriving. It was all survival, all the time.
However, now we are approaching a world where everyone on the planet will have a smartphone with internet access. It is a completely different world. It took the computing industry 70 years to arrive at smartphones?—?the first computer that can get to everyone on the planet. Now that such technology can be applied to problems everywhere, we will see a tremendous bloom of brilliance not only in America, but in the developing world as well.
This is my true north. It is the driving force of why I do what I do. It is the WHY behind the what and the how…
To educate and empower people on the true definition of entrepreneurship and provide support in tapping into their genius level of ability by removing limiting beliefs and circumstances.
What Is Entrepreneurship?
It’s a good question, one that has been asked generation after generation?—?but the answer has changed over time.
I’d like to tell the narrative of American entrepreneurship to illustrate my thesis around this statement:
John Steele Gordon begins his speech on “Entrepreneurship in American History” by articulating an entrepreneur as “One who undertakes, manages, and crucially assumes the risk and responsibility for a new enterprise.” He goes on to explain how the word is originally from France, and was borrowed in English for the first time in the mid-18th century when Europeans decided to leave their homes to colonize a new renaissance called the United States of America?—?a country founded by entrepreneurs.
Entrepreneurs are visionaries. Like artists, who look at a blank canvas, and can imagine a beautiful scene, entrepreneurs see uncertainty, inefficiency, and struggle as the key ingredients to success.
1800's
The world is impossibly far apart from each other. It takes months to travel on dirt roads, through rivers, and over mountain ranges?—?half on the journey will not make it to their destination alive.
Manifest Destiny is a widely held belief in the United States that American settlers are destined to expand throughout the continent. There is a spirit of ambition and opportunity to aspire to “in the name of God and profit.” This destiny itself is later manifested in the California Gold Rush.
Andrew Carnegie, an American businessman born in Dunfermline, Scotland?—?not only produces more iron and steel than Britain and Germany combined, he exports it to both countries and virtually owns the industry. As does John D Rockefeller with oil and J.P Morgan with banking. Monopolies like these exist for the exclusive purpose of domination. There is deep-seeded competition that runs through the blood of these men. They see targets everywhere and they get what they desire through way of leverage and intimidation. It’s a game of war.
Entrepreneurship = Profit through Domination and Intimidation
The defining factor and purpose of entrepreneurship in this time is profit and domination. Winning. Products and services are making people’s lives better and improving living conditions, but growing profits and reduced costs are the single concern for leaders of industry.
The factory system is perfected as a way to scale supply and reduce costs. These factories are filled with cheap workers, many of which work for the very men that have achieved what they aspire to?—?success and riches.
Tycoons and moguls have such a stranglehold on their industries that competition is of little concern. Rather, they use their earned leverage to expand to new industries?—?or invent completely new ones.
There is an immense amount of progress that comes from this time—steel skyscrapers and the birth of modern cities; a railroad that spans the nation to transport goods and people; electricity and the bulb to light cities and homes; and the beginning of a long struggle for true equality in citizens.
As this era ends, we near towards modern globalization.
1900's
Through Ellis and Angel Island, immigrants are able to learn the ways of business. America has grown and become a world power built upon the concepts of freedom, capitalism, and social Darwinism. Industrialization allows cheap production of household items using economies of scale, while rapid population growth has created sustained demand for commodities.
In 1903, the New York Stock Exchange is built as an infrastructure for entrepreneurs. The business landscape has become much wider and more open for smart and savvy new players.
Many of the previous centuries’ most successful entrepreneurs are dying and leaving their companies and legacies to successors?—?a newer generation of entrepreneurs who are using the increased leverage of an organized system. They build companies around industries that touch every aspect of people’s lives.
In 1907, a United States financial crisis takes place over a three-week period starting in mid-October, when the New York Stock Exchange falls almost 50% from its peak the previous year. Panic occurs. The “Panic of 1907” eventually spreads throughout the nation and many banks and businesses enter bankruptcy.
As a result of this panic, the date of December 23, 1913 brings a fundamental change to the fabric of America. The Federal Reserve System is founded as the central banking system of the United States. It is built to look like a Government entity, but is a completely independent banking cartel. This causes the scales of power to tip out of control and suddenly there is an outside entity that can control the flow of money to both Government and citizens?—?and they will only make decisions that fit their best interests.
The next year we enter the first World War. This begins a long period of 31 years?—?from the beginning of WWI to the end of WWII (1914–1945)?—?where America is focused on patriotism and banding together to kill the enemy.
Following WWII, the large companies come together to form conglomerates, which further expand by way of franchises. The most successful of which is McDonalds?—?a family BBQ joint that is taken over by Ray Kroc. He scales up with franchise locations that produce food through assembly line production.
A fast food factory that spans nationwide.
Another industry that takes off during the 1900's is the tobacco industry, through the widespread smoking of cigarettes in the Western world. At the start of the 20th century, the per capita annual consumption in the US is 54 cigarettes (with less than 0.5% of the population smoking more than 100 cigarettes per year), and consumption peaks at 4,259 per capita in 1965. At this time about 50% of men and 33% of women are smoking (defined as smoking more than 100 cigarettes per year).
How do entrepreneurs build a business around getting consumers to buy a product that solves no problems and offers absolutely no value. An addictive and dangerous product that as early as 1888, was described colloquially as “coffin nails”?
Public Relations and Advertising.
Two years after the end of WWII, a man by the name of Edward Bernays publishes an essay by the title “The Engineering of Consent” (which will become a book 8 years later). In his writing he tells about the work he has been doing with the Federal Reserve and the large tobacco companies. A method he has created based on his uncle’s teachings?—?a man by the name of Sigmund Freud.
This method is called Public Relations.
Edward Bernays is the person who creates campaigns to get more women to smoke cigarettes when their brothers, fathers, and husbands are off fighting the war. He is the guy who creates a system of strategy to get people to buy things that they don’t need. Even things that can kill them.
Edward Bernays is the man who engineers “The Century of the Self”.
How and why does he do this?
Bernays explains, “Professionally, public relations activities are planned and executed by trained practitioners in accordance with scientific principles, based on the findings of social scientists.”
Bernays is a man who is by two branches of his family tree the nephew of psychoanalysis pioneer Sigmund Freud. His mother is Sigmund’s sister Anna and his father is Ely Bernays, brother of Freud’s wife Martha Bernays. His thoughts had been very closely incubated by the world view of these people?—?belief that manipulation is necessary in society, which they regard as “irrational and dangerous” as a result of the “herd instinct”.
His influence and contribution to the entrepreneurial landscape is immense for its bottom line, however it sears in a confirmed belief that control and manipulation is imperative for an entrepreneur’s success.
Entrepreneurship = Profit through Control and Manipulation
Bernays is not an insignificant character in the story of American entrepreneurship. In addition to famous corporate clients, such as Procter & Gamble, the American Tobacco Company, Cartier Inc., Best Foods, CBS, the United Fruit Company, General Electric, Dodge Motors, the Fluoridationists of the Public Health Service, Knox-Gelatin, and innumerable other big names, Bernays also works on behalf of many non-profit institutions and organizations. These include, to name just a few, the Committee on Publicity Methods in Social Work (1926–1927), the Jewish Mental Health Society (1928), the Book Publishers Research Institute (1930–1931), the New York Infirmary for Women and Children (1933), the Committee for Consumer Legislation (1934), the Friends of Danish Freedom and Democracy (1940), the Citywide Citizens’ Committee on Harlem (1942), and the National Multiple Sclerosis Society (1954–1961). For the U.S. government, he works for the President’s Emergency Committee on Employment (1930–1932) and President Calvin Coolidge.
With the success of Bernays’ campaigns and the structure of his expertise, a specific industry standard is solidified?—?one that may have always been thought to be true, but was less explicitly executed upon.
The business world adapts psychological techniques to read, create, and fulfill the desires of the public, to make their products and advertisements as pleasing as possible to consumers and citizens. Where once the process was about engaging people’s rational, conscious minds, as well as facilitating their needs as a society, it is now about employing the tactics of psychoanalysis; businesses appeal to irrational, primitive impulses that have little apparent bearing on issues outside of the narrow self-interest of a consumer population.
The words of Paul Mazur, a leading Wall Street banker working for Lehman Brothers, are cited:
“We must shift America from a needs- to a desires- culture. People must be trained to desire, to want new things, even before the old have been entirely consumed. Man’s desires must overshadow his needs”.
These strategies are also taken into politics, the American people are fed advertisements for products, services, politicians, and wars that are sometimes harmful and dangerous in vain.
“Government will always help those in power at the expense of those who might become so.”
All the most successful businesses are now run like factories, marketed through manipulation?—?with a focus on efficiency and scale at the sacrifice of real quality and real value. If the products are solving problems and making lives better on a micro level, then the corporations and their systems are certainly doing the opposite on a macro level.
This is not sustainable.
2000‘s
The world population is about 6.1 billion.
Technology is beginning to change rapidly and bring a new wave of opportunity for entrepreneurs by way of Silicon Valley in California.
This century starts out with a very direct attack on the symbol of America. People are shaken and terrified. They band together in another wave of patriotism, but it feels much different than before. Americans look to their President for guidance and wisdom. They are told to “go shopping more”.
Networked computers have become something called the Internet in the late 90's and are now being adopted at an alarming rate. By 2005, 16% of the world’s population are using the Internet. At first, the effect of entrepreneurs shifting to this new platform results in a fanatic period of time. It seems like money is falling from the sky and any average citizen with an idea can strike it rich with a dot-com. Due to the rise of the commercial side of the Internet, venture capitalists see record-setting growth as dot-com companies experience meteoric rises in their stock prices and therefore move faster and with less caution than usual. Many are choosing to mitigate risk by starting many contenders of conflicting interest and letting the market decide which will succeed. American news media, including respected business publications such as Forbes and the Wall Street Journal, encourage the public to invest in risky companies, despite many of the companies’ disregard for basic financial and even legal principles. In spite of this, however, a few company founders do make vast fortunes when their companies are bought out at an early stage in the dot-com stock market bubble. This does not happen for the simple majority. There are far more losses than wins.
This time seems to be significant evidence towards Bernays’ herd paradigm and so the psychology of business stays based on those principals of wants based marketing/PR. The true influence and power still belongs to that same school of thought.
At the same time, the Internet grows and becomes a tool for organizing and operating millions of people around the world to find each other and provide a voice for those outside of power and influence. Social networks and social media begin to create infrastructure for these niche and specialized groups of people; they now have tools that have never before been available. Ideas are exchanged freely with no censorship or moderation and it’s all happening at break neck speeds.
THIS CAUSES A FUNDAMENTAL CHANGE.
While this is going on, big factory oriented business is still very much in control. Their focus is on recognizing that the rapidly evolving technology offers them an opportunity to reduce costs of labor and scale to new territories faster.
But where do they find their workers?
Outsourcing and automating rules the day. The top Fortune 1000, 500, and 100 companies are systematically entering a process of ridding of their work force and replacing them with machines, robots, and offshoring to other countries that for cheap labor that allow an opportunity to cut costs. The skills gap is widening, the middle class is shrinking, and wages are stagnant. Many of the returning or newly created jobs require the ability to operate and program complex machinery. The dismal US education system under-prepares students for these realities. Americans have skills, but the skills and talents do not seem to match what employers are looking for.
There is loss of employment in occupations once considered safe from offshoring and technological advances. It is not just manufacturing that can be outsourced and mechanized. The ceaseless march of technology and increasing speed of internet connectivity are creating an entirely new competitive landscape for service jobs. The new global class of cheap-but-educated labor is alien to anything the US worker has ever experienced. A routine or repetitive knowledge job can be moved to the developing world or replaced altogether with computing power.
Creative, education-intensive industries are not being off-shored or replaced with technology?—?at least not yet. These are the jobs the US has an advantage in producing and exporting. Technological improvements tend to enhance these jobs, not replace them, but there are no guarantees. The new reality demands being brilliant or different; mundane will not cut it.
THE WORLD TODAY
Micro-level
We have people losing their job security everywhere. They have been trained to fall in line, and do what is expected of them?—?not think critically?—?and they are left with no life boat and little relevant skills to compete with the rest of the world in a rapidly changing landscape. They are stuck being forced to follow archaic rules in industries that not only avoid change, but actively fight it.
Macro-level
We have rampant corporate and government corruption on a global scale. Conglomerates of all industries are built on unsustainable infrastructure that is slowly destroying the natural world and causing wide spread sickness and disease to the planet and the life on it.
What does this leave for future generations?
Where does that leave us?
We now exist in a connected world?—?Marshall Mcluhan’s global village. We are watching the collective population develop a planetary nervous system. For the first time ever humans have the ability to measure things happening all over the planet, process that information, and respond to it while it is all still happening.
This creates a new fundamental truth. Something that has not existed for entrepreneurs of any other era in history.
It changes the definition of entrepreneur and it changes what it takes to be profitable in business.
Entrepreneurship = Profit through Solving Problems and Creating Value
Given everything we have today?—?how can we make things better?
The birth of digital has brought a new golden age all over the world. Mechanisms to bring capital together with ideas are far more robust than in past years.
What scales now is meaningful and important?—?solutions for problems that truly make lives better in a sustainable way; the creation of widespread value.
It is quite difficult for interesting things to happen at traditionally run corporations, they are factories that cater to shareholder value over any other single thing. The bottom line prevents any exploration of uncertainty.
Unless you are on the edges, learning fast and risking failure; you will not be there to change the landscape.
True change will come from those with intelligence, energy, and integrity who can be quick enough to adapt as things evolve.
Social Entrepreneurship?
You may be reading this and think what I’m talking about is called Social Entrepreneurship.
Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.
This sounds right, however the problem is that these words have become a label to describe a trend or a fad?—?something for “Millennials”.
This is wrong.
New Game, New Rules
The market has always controlled entrepreneurs and their businesses but the market has not been empowered and connected enough to organize and speak out until now. The factory centric model of goods and services is not nearly as profitable as it used to be. For hundreds of years these factory brands have ruled the day, but they are not the fastest growing companies anymore. Consumers now decide to spend their money on things that aren’t factory produced commodities. They invest in off-the-shelf ideas. They work on things they believe in.
Today, the market does not want what it wanted yesterday.
Est. 1906 used to be important, now it is a liability.
The market demands change.
You cannot play a new game by the old rules. Even if you’ve been winning that old game for centuries, you must adapt to the new rules that exist or you will die.
Kodak: 160k employees and $28B market cap in 1997.
Gone because they failed to innovate and adapt to the new rules.
Blockbuster: 30k employees and $5B market cap in 2002.
Gone because they failed to innovate and adapt to the new rules.
Blackberry: $83B market cap in 2008.
Now close to $3B.
AOL: $222B market cap in 1999.
Sold to Verizon for only $4B.
The Future of Business is Small
Virtual startups exist within an established company. They act as a business model generator / validator. The idea is to create enough separation from the parent company that the startup group can hypothesize, experiment and pivot when necessary.
Larger companies are starting new entrepreneurship initiatives because they need fuel for innovation and they need to sustain a competitive advantage. The smartest companies are catering to entrepreneurs, allowing workers to pitch their ideas, and even funding them. They hold entrepreneurship contests, invest in startups, and bring on an entrepreneur in residence (EIR). In the war for talent and innovation, companies have to think entrepreneurially in order to survive and thrive.
Intrapreneurship is on the rise.
Intrapreneurs are individuals that behave like entrepreneurs in major companies, they are the all-star engineers who come up with original ideas and create new products. Companies have embraced intrapreneurship to drive innovation. This trend has been driven in large part by a generation of entrepreneurs that want to reinvent the business world.
Companies are going to have to embrace entrepreneurship if they want to be successful. Google is a great example of a company that understands this. If you work there, you are in a startup culture within a major corporation. I believe that in the future, the leading companies of all sizes will resemble startups and have an innovative startup culture.
Companies like Coke and Intel create their own divisions of innovation within their companies. Ernst & Young has “The Innovation Challenge,” which is an internal competition where employees come up with new service offerings for their clients. PwC, another major consulting company, runs the “PwC PowerPitch”, which is an innovation contest where the winning team receives the sum of $100,000 to implement their idea. Amazon Web Services has the “Start-Up Challenge,” which is a competition for start-ups that use its Web, e-commerce and cloud-computing technology to build their infrastructures and businesses. Prizes include a cash grant of $50,000, mentoring sessions and a potential investment offer from Amazon. Qualcomm Ventures offers the “Qprize Competition,” which is an international business plan competition open to mobile industry entrepreneurs. The top prize is $250,000 of convertible-note financing.
Many organizations, willing to utilize the strategy of internal ventures, will need to change their mindset, redefine their concept of organization and relinquish control in order to expand their capacity for speed. Mastering a new approach to managing projects that develop innovative products and services will help corporations capitalize on emerging market opportunities.
Corporations need to broaden their tolerance to mistakes and encourage entrepreneurial approaches by creating conditions which allow employees to think entrepreneurially. Top management should be ready to face the fundamental conflict between the mainstream organization and the disruptive innovation team, and manage the relationships between them.
Millennials
The term has become a major buzzword. Large companies want to understand and learn how to speak to them, but look through a microscope.
Millennials (also known as the Millennial Generation or Generation Y) are the demographic cohort following Generation X. There are no precise dates when the generation starts and ends. Researchers and commentators use birth years ranging from the early 1980s to the early 2000s.
If you truly want to understand Millennials you must realize that they are the first generation to usher in this new world with new rules. Their existence belongs in a connected global nervous system where everyone has access to all the information they want or need at all times.
They grew up watching visionaries like Steve Jobs prove that innovation changes things and remarkable products and services spread fast.
They saw the marketplace reward this innovation.
They know about their ability to create their own reality.
They believe work is too time consuming to be dull and meaningless.
They know that people have potential.
They believe in setting up a life they don’t need an escape from.
They live the problems of the world and know that there is nothing more important than finding the solutions to them.
Why wouldn’t we? We have everything we need.
Change Agents
The levers just got longer.
The most profitable, powerful, and productive path today is the most reliable, the most meaningful, and the most fun. The explosion of tribes, groups, covens, and circles of interest means that anyone who wants to make a difference?—?can.
Entrepreneurs can no longer fall into the profit seeking echo chamber they have in past generations. The marketplace is begging us to be remarkable and different.
The people who love their jobs are doing meaningful work that matters.
Everyone is now expected to lead, and the new leverage of tools like the internet allow this to be possible.
You’ve been trained to avoid these ideas, but you can start now. There is nothing stopping you.
We must learn to see the fear of failure and criticism through a new lens, one that affords opportunities to learn and get better. All the limiting beliefs and circumstances can be drowned out. You can tell your story louder. Talk over the fear.
Success is merely a hangover of failure.
The factory advantage faded when it lost growth to upstarts. This type of business is a bubble. Don’t invest your time or energy into it.
Something else I believe to be a bubble is laziness, complacency, and a victim mentality. More and more jobs will be replaced by outsourcing and technology. It will become survival of those who can separate themselves from the rest.
Doing nothing is a choice, to not try something different. It requires a lot of rationalization and a bit of hiding. The safest thing you can do is play it risky and the riskiest thing you can do is play it “safe”.
5% of people is all that’s needed to be even remotely innovative to change our world. Meaning, less than 10,000 people born this decade will influence all of what society adopts to make happen.
You should try to be one of those people.
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An expert amplifier of great ideas from a highly select group of people who seek to inspire future generations. Ecosystem Builder. Brand Storyteller.
9 年Great piece man!