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What is entrepreneurship?

Recent contact with universities gives the author a chance to chew on the definition’s three ingredients

Jack Yan
Jack Yan is founder and CEO of Jack Yan & Associates and president of JY&A Consulting.

IT HAS BEEN quite a month for me and universities in New Zealand. I’ve met with representatives from Otago and Auckland universities and had a phone call from one of my old lecturers (she’s not that old) from my Alma Mater, Victoria University of Wellington. In a few more hours, I’m attending a function at Massey University, where I had a brief tenure. But one of the most intellectually stimulating of the meetings was with Otago University.
   While I'd rather err on the side of caution and not reveal its topic publicly, the experience did give me a chance to think about what entrepreneurship is. I was obviously contacted because of some recent and welcome press coverage from Unlimited, the New Zealand and not Scottish magazine which may be thought of as an antipodean Fast Company, only with far better paper and printing. Though I have had little contact with FC, I can say Unlimited's level of journalism is tremendously high, from the interview and from friends who have submitted freelance work to the mag. But, even with 15 years of business—half my life at one firm now—I am of the "new" economy, an entrepreneur who starts businesses (and has a hard time letting go of them).
   I know from earlier readings into entrepreneurship that some folks don't fit the mould. I would have thought that amongst public consciousness Pretty Woman had sent that signal. Corporate raiders like the fictional Edward Lewis, who bears a remarkable resemblance to Richard Gere, are not entrepreneurs. Nor are folks selling Avon and Mary Kay. But why?
   I had concluded from my talk with Otago that these folks, fictional and non-fictional, contribute nothing to the corporate culture they come into contact with. It is handed to them. They follow it, and must do so religiously. Slater Walker and the fictional Lewis set out to destroy cultures, whereas entrepreneurship implies cultivation. Therefore, the presence of a corporate personality, or incorporation, has nothing to do with entrepreneurship. Indeed, with New Zealanders taking all of 15 minutes to set up companies online, incorporation has become a no-brainer. That accessibility means folks don't have to think a heck of a lot about their sacrifice or make some mental or spiritual justification about why. It can be problematic, because it affords corporate-veil protection that isn't always countered by an increase in fiduciary duty and director accountability, but that's another column.
   Rule one must be: an entrepreneur must be someone who positively contributes to the culture and philosophy of a venture.
   This could cover the guys from Google. There is a cool culture at Google, even though the idea of a web search engine is not new. However, Google improves on the idea with its bespoke technology and there's a distinctive culture within the firm that's attracting résumés by the hundreds daily. And it covers those folks who buy an existing business, with the hope of growing it.
   That is not enough. Employees fit into rule one, too. Perhaps one can say that they are entrepreneurs, too. The guy who invented Post-It notes could fall into that category. Or is he an inventor? Taking this further, he might not have ever invented Post-Its if it were not for 3M's encouragement of play-time. 3M's culture to accommodate such inventions must have existed prior to the invention, and allowed the prototype notes to be used internally. To me, there had to be an extra ingredient, some degree of realization to enable both the founder's and the employees' dreams to come true. Without that bridge, no dreams would be realized, no commercial ventures begun.
   I toyed with the second ingredient as: an entrepreneur must be someone whose passion allows an idea to reach fruition.
   This covers all those entrepreneurs whose businesses do not make money, for example. They simply want to make a dream come true. Amazon.com still posts losses, but few can deny Jeff Bezos the mantle of the entrepreneur. It covers those organizations that have no plans to make money, ever, such as charities. It even covers organizations that get put in place with a view to obsolescence in an ideal world, such as rape crisis centres. They can expand to spread awareness but ideally, they would rather not exist. And of course, it covers businesses that are out to make money—but bear in mind that the two ingredients must be considered together. These are not alternatives; both are necessities in entrepreneurship. If one only took the second rule alone, it would fit pretty much any network marketer with a passion for money.
   But these two alone doth not an entrepreneur make. We came back to the issue of employees, who still fit the above bill. Employees might innovate, but do they do so freely? Many new things have come because of commissions, not because of tinkering. Legend has it that President Reagan's Star Wars programme came because the president asked it to be invented after the scientists told him it couldn't be done. I haven't verified this but it's a parallel for some of the things I've seen emerge from my own firm. The team is not under duress, not by any means, but they are not completely free. There is a structure that keeps the innovation internal.
   Therefore, I believed that there is a third ingredient: that of total free will. The entrepreneur must have the liberty to realize an idea. This liberty permits incorporation, finding people, setting visions and goals, pushing a venture to an outcome. It might explain why communist countries don't really have entrepreneurs if everything is done for the state. To me, it's the logical extension of the trade protesters' arguments as they create some havoc in Sydney as I type. Of course, they are right in some respects: there is moral globalization, as I have written before, and amoral globalization, with which they take issue. But to be against world trade means limiting the liberty of entrepreneurs, and in countries like New Zealand (or for that matter Austria), where an overwhelming majority of commerce relies on small- to medium-sized enterprises, that is not a good sign. These entrepreneurs generate jobs where big business does not. Che Guevara T-shirts and red flags are dangerous symbols to all SMEs and the need for entrepreneurship. I would guess most of them aren't against entrepreneurship, the engine that drives advances in our world. •