Entrepreneur, Author, Professor, Global CEO

September 28, 2012

Do We Agree On What Entrepreneur Means?

If you are talking about entrepreneurship you may not know what you are talking about.

Entrepreneur is an overused term that can mean almost anything. The problem with reading books, articles and blogs on the subject of entrepreneurship is that you may not realize which definition a person is using. Sometimes authors use multiple definitions without realizing it. I get very frustrated when someone quotes the results of research that may have been done using a very different definition of entrepreneur than they assumed.

It is important to understand the range of definitions of entrepreneur in order to properly understand and analyze who is saying what to whom on this very broad discussion topic.

Here are six of the most popular usages:

  1. A hero with unique skills that can take an idea and turn it into something very valuable that employs many people Less than a thousand people a year in the US would qualify for this definition
  2. Someone that starts a business for profit. Over 1 million new businesses are started a year in the US
  3. Someone that participates in the starting of a business. It is estimated that about half the working population of the US will try to start a business during their working career
  4. Someone that runs his or her own business. It is estimated that at least 5 million people run and own a registered business at any time in the US
  5. Anyone that works for themselves. About 33 million Americans are self-employed at any point in time
  6. Everyone, as everyone constantly decides what risks they should take to improve their personal livelihoods. This includes every person in the workforce

And there are more definitions. You often do not know which definition is explicitly being used. For example, VCs want to find ‘heroes’ in order to provide financing to them, so that is the tacit definition they almost always use. Academics who study entrepreneurship often, but not always, use definitions #4 or #5. Many in the blogosphere inappropriately mix and match. By understanding the overall range of definitions you are now in a better position to figure out which one fits best with what you want to talk about.

I will use entrepreneur to mean anyone involved in starting or running a growing business (I will tell you whenever I mean something different). My definition is slightly broader than #4 because it includes anyone that is working to start a business but has not yet launched it. I believe that most people who run businesses would like to grow their business if that wasn’t a scary prospect, so the 5 million+ business owners are all included in what I’ll be talking about.

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