There's a big difference between somebody who runs a business and a true entrepreneur. Three factors to help you tell the difference.
A few years ago, I went on a date with a girl I'd met online. She was nice, but there was no romantic chemistry, and our talk turned to Internet dating war stories. She shared a hard-won insight:
Just because a guy says he's an 'entrepreneur' doesn't mean he actually owns a business.
Truer words were never spoken! It also goes the other way:
Just because somebody owns a business, doesn't mean he or she is actually an entrepreneur.
This exchange leaped top of mind this week as I've followed the SBA's Small Business Week events. Small businesses make up a whopping 99.7 percent of American firms, and account for 64 percent of net new private sector jobs. It's an important topic.
But so often, people use words like "entrepreneur," "business owner," and "founder" interchangeably. I think we might be losing something and giving aspiring entrepreneurs some bad guidance in the process.
So what is entrepreneurship anyway? The best definition I keep coming back to is:
First coined by a professor at Harvard Business School, it's really instructive. It's much more about a way of acting than it is about a result. There is nothing inherently in the definition about money, or even business.
So, with that in mind, here are three factors to consider in deciding whether you're acting like an entrepreneur, a business owner, or both.
1. What Opportunity Are You Pursuing?
Let's start by breaking down the definition. If being an entrepreneur starts with the idea that you're "pursuing opportunity," can you describe the opportunity you're going after?
Another way to approach this is to ask yourself what problem your business solves. (Bonus points if you can truly say it's a "deeply felt customer problem.")
In fact, as one of the most interesting entrepreneurs I know insists, your answer to this question is the best predictor of whether a new ventures will fail. Again, this doesn't have to be a money-making opportunity, per se. There's an entire category of social entrepreneurs who are among the best examples.
Bottom line: Are you solving problems and trying to improve the world, or are you just going to work?
2. What Opportunities Are You Giving Up?
It stands to reason that true entrepreneurs have lots of options--precisely because they're in the business of creating options. That in turn means that they have to give up a lot of opportunities as well.
Maybe this is best illustrated by using two examples:
First, let's think of a woman who walks away from a promising job to start her own firm, because she sees how her old bosses meet their customers' needs and realizes she can do better. She might not succeed, but she's probably an entrepreneur.
Second, think of a man who grows up expecting to inherit his parents' business, and who, after they leave it to him, runs it basically the same way that they did. He might turn out to be a fantastic executive, but he's probably not an entrepreneur in as pure a sense.
Bottom line: Are you pursuing this opportunity because it's the best conceivable one for you, or have you simply picked the best of what's familiar and in front of you?
3. How Exciting Are Your Solutions?
Entrepreneurship goes hand-in-hand with innovation, but it's not a direct relationship. Entrepreneurs are like Goldilocks: They need exactly the right amount of innovation. Too little is boring, but too much can be a problem, too.
We all know stories of entrepreneurs who get so wrapped up in technology, for example, that they lose sight of its utility. Or else, we hear about entrepreneurs who try to introduce solutions that are just too disruptive for customers to be comfortable with. (When we're being polite, we say they were "ahead of their time.")
Luckily, there's a measuring stick: How exciting are your solutions? Even better, how excited do other people get about your solutions?
Sure, innovation can be a part of that, but the measurement goes directly to the definition of entrepreneurship, above: "without regard to resources currently controlled."
Bottom line: Take a cold, hard look. Is your venture really the best possible use for all of the "other people's resources" you need--not just money, but also their time, their trust, and their passion? Is it truly exciting to you, and to them?