Successful Entrepreneurship through Discipline & Learning

I suspect the definition most would hold for entrepreneurialism leads us to think of entrepreneurs as those that go out and create businesses. But I think more of us are entrepreneurs than that narrow definition would allow. By definition, an entrepreneur is one who undertakes. The question is, undertakes what? Undertakes a vacation to Disneyland? Undertakes the reading and understanding of a book? Or, maybe, it is an undertaking like a home remodel?

Additional definitions have the entrepreneur undertaking tasks ... with risk. Well, risk means that the outcome of the undertaking is uncertain. I could easily assert that the examples above could meet the risk criterion. We assume risk when we don't know whether our efforts are going to produce positive results. A home remodel definitely has risk, but I do not think a home re-modeler is necessarily an entrepreneur as most would use the term.

A business entrepreneur seems to be a person who undertakes some effort with risk for the benefit of others. This last component of the definition is a unique and critical distinction. When you remodel your home, you do it primarily for your own benefit. Sure, your friends and family are thrilled that your house is more pleasant to visit, but, except in very rare cases, I do not think they would pay you to make those changes.

The "with risk" part is part of the definition that brings us to problem solving. I imagine that an entrepreneur is one that undertakes a very special type of task: a task to overcome a problem. But I think we are mixing up our terms here. A task is an activity we already know how to do. It's clear, defined, and presumably has a predictable outcome. Problem solving however, is a little messier. When one tackles a problem, it is unclear what the outcome will be when the problem solver accomplishes his first pass at the problem. Therefore, the entrepreneur assumes risk when he engages in problem solving.

The business entrepreneur could be taking something he knows how to do (a series of tasks) and combining them in ways to create the new value that comes with creating additional scale-the ability to bring a known solution to a much larger community of customers. Or, the entrepreneur could bring a tried and true solution to a new set of customers solving their problems. If it hasn't been done before, the entrepreneur will be rewarded with profits consistent with the value created by achieving this new scale or reaching this new market.

When the approach is known to all, it becomes truly a task. Unfortunately, a task can be commoditized (a process that transforms the market for a unique, branded service or product into a market based on undifferentiated price competition. In economic terms, the market changes from one of monopolistic competition to one of perfect competition). When a product or service becomes commoditized, the only hope for profits comes from leveraging guesses about natural imbalances in the market dynamics of supply and demand. Still, when the entrepreneur finds ways to meet demand on a shortage of supply for a commodity, he's again problem solving and will see profits commensurate with the value of filling this need.

Entrepreneurial actions are our efforts to solve problems for others. Therefore, entrepreneurs are Problem Solvers. When one solves a problem, new value is created. In the business world, problem solvers take risk but often create value by solving a customer or market problem--key to creating a profitable enterprise. The more or larger problems an entrepreneurial organization solves, the more profit it can generate.