Tuesday, November 4, 2014

Is being an entrepreneur the same as being a business owner?

Let’s say someone has been thinking about doing a startup and is finally getting going, does that make her an entrepreneur yet? What if she has experience as a business owner? Does that count?
Well, here are a few definitions:
StartupA company that is in the first stage of its operations. These companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand. Due to limited revenue or high costs, most of these small scale operations are not sustainable in the long term without additional funding from venture capitalists.
Here is an even better definition, in my opinion: In the world of business, the word “startup” goes beyond a company just getting off the ground. The term startup is also associated with a business that is typically technology oriented and has high growth potential. Startups have some unique struggles, especially in regard to financing. That’s because investors are looking for the highest potential return on investment, while balancing the associated risks.
Lastly, I find Dave McClure’s definition awesome:
A ‘startup’ is a company that is confused about —
  1. What its product is.
  2. Who its customers are.
  3. How to make money.
  4. As soon as it figures out all 3 things, it ceases being a startup and becomes a real business.
Except most times, that doesn’t happen.”
1) EntrepreneurA person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
2) Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.
Business ownerAn individual who owns and operates a business whether it be small or large. This individual also profits from the net gain of the company.
As you can see, there is a difference between a business owner and an entrepreneur, and that difference is largely high growth and risk factors.
There is also a difference, obviously, between an entrepreneur and an aspiring entrepreneur.
My personal approach has been to first appoint myself as a startup founder and simply get going somehow.
Then the plan is to gradually and systematically keep progressing from being an aspiring to being a bona fide entrepreneur.
I have been a business owner for over 26 years, but that doesn’t make me into an entrepreneur.
There is a difference — a big difference.
As I keep studying the venture capital industry, I notice that VCs see definite distinctions within entrepreneurship itself as well: a first-time entrepreneur is a far cry from a second or third time entrepreneur to them.
Let’s not fool ourselves, let’s be prepared.

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