It is estimated that more than 1,000 new start-ups are created every hour and that one in three companies last for less than three years. Start-ups are at the forefront of a revolution that is transforming and renewing the world economy. In fact, start-ups are the essence of the free market because setting up new businesses breathes new life into the market.
Entrepreneurship and innovation. These terms are frequently confused because in the real world, the moment where we move from innovation to entrepreneurship is not a precise one. Innovation is a more of an intellectual process, more creative, in that it deals with the world of ideas (we should understand where these ideas come from, and distinguish these ideas from opportunities). Entrepreneurship, on the other hand, is a more organizational process that deals with the world of action.
We could define an entrepreneur as someone who identifies an opportunity and creates the means to pursue this opportunity. Therefore, the essence of creating a start-up is to understand all the activities associated with the perception of new opportunities and the creation of the organisations that pursue them. The academic world considers entrepreneurs to be managers of companies that opened between 0 and 42 months previously, and are at the right stage of development for market research. A start-up is a new company that has the ability to transform and create change using a scalable business model. The term became popular during the dot-com bubble when a great number of internet companies were founded. Obviously, a start-up requires a great amount of personal strength, an internal energy that will move it beyond life’s daily activities.
The entrepreneur is focused on action. They must also be focused on detail because entrepreneurs are ultimately responsible for the project and cannot allow themselves the luxury of delegating essential responsibilities to others. These responsibilities include:
- Identifying or creating an opportunity.
- Creating a product, service, or process that satisfies a detected need in the market in such a way that it allows for a financial return.
- Implementing and executing plans and ideas and ensuring these become a reality.
It is important to note the concept of intrapreneurship here, one that is very well known in the world of international management. Intrapreneurs can be described as entrepreneurs within an organization. They are capable of creating new start-ups from inside the organization where they normally work, alongside it, while sharing the risks and benefits. Examples of organizations that encourage intrapreneurship are 3M with Post-It Notes, Intel or Google with Google News, AdSenses or Gmail.
Learning to be an entrepreneur
The myth of the entrepreneur with certain innate qualities is very prevalent in our society, but the fact is that it is not just qualities but instead true talent that makes people set up and launch projects. This myth is very prevalent among technical professionals because they acquire highly specific knowledge during their many years of study at university, and thereafter spend valuable time keeping up to date in their constantly changing sectors. They find it unthinkable to have knowledge in other areas.
However, the fact remains that other professionals have made progress in this area before them. Although today it is not unusual to meet lawyers, programmers or engineers who have founded start-ups based on their own ideas, not so long ago this was not the case. These collectives have taken the lead in order to disseminate the ideas of others. For instance, in the health-care field it is possible to be innovative, but often it is not doctors who are at the forefront of this innovation but entrepreneurs who see the opportunities that doctors abandon on their desks, since they are permanently wrapped up in their own scientific world. It is interesting to see the enormous quantity and quality of publications produced by the medical community, however when we compare this data with the number of patents or companies arising based on these ideas, we can see that there is great potential to be more entrepreneurial. Perhaps it is time to change all of this and reclaim the results of these ideas, to become more conscious of their value and take on a more proactive attitude in order to pursue them.
Many professionals have been filled with doubt wondering if it is necessary to leave their job in order to become an entrepreneur. The answer is no. They just need to be surrounded by the right people. Of course, certain shades of grey will always exist. Entrepreneurial initiatives do not come to fruition based on the efforts of one person—teams make them a reality. Technical professionals who sense a problem and discover an opportunity undoubtedly require knowledge from the business world. However, if they are capable of good leadership and can surround themselves with a team that is informed and allows them to turn the idea into a reality, then they are the best people to carry out this idea from within their sector.
In Europe, entrepreneurs frequently develop an idea, look for capital, and finally look for a good team to put it into practice (in that order). In the United States, where entrepreneurial activity is more efficient, entrepreneurs develop their idea, find a good team, and lastly go in search of capital. The team comes first. This model is necessary for innovation, because it makes up for professional shortcomings. Any professional can detect an opportunity and encourage people who are looking for this type of challenge to convince them to take on the project and make it a reality. If the idea and the team are good, professionals from other disciplines will come and join in the wait until the capital arrives. “Full” knowledge is never completely achieved; however this is the way to start moving in that direction. When we are convinced it is our turn to drive forward an idea, surrounding ourselves with a great team can make all the difference.
In any case, it is always a good idea to explore different areas to the one in which one works. Good opportunities can often be found in the small gap in between disciplines. For example, professionals such as engineers, doctors or creative people who dedicate their life to doing what they enjoy are also able to identify problems and opportunities and decide to learn the language of business as well.
In recent years there has been a significant increase in the number of professionals who decide to pursue a master’s degree in business administration (MBA) or a master’s degree in entrepreneurship, innovation and technology to complement their field of study, without actually planning on moving into the world of business. I know many of them, and have myself done the same. I understand why. It is enriching when people understand the dynamics of the economy in which they are working better. Obviously, not all professionals need to delve deeply into this issue, but it is clear that a sub-group of them who worry about these issues are demonstrating more than ever that as professionals, they want to be the lead actors in innovation and entrepreneurship in their sector, in the same way as other professionals have done before them.
* Patricia Sáez – Assistant Lecturer, Entrepreneurship, UIC.