Incongruities (a discrepancy between reality and what everyone assumes it to be - or between what is and what ought to be)
Process Needs (such as energy efficiency, data transfer, communication…)
Industry and Market Changes (Internet, cell phones, government stimulus, social networks…)
Demographic Changes (population size, age distribution, composition, obesity, employment, level of education, income…)
Changes in Perception, Mood, or Meaning (war, financial crisis, religious tensions, climate change)
New Knowledge (technology and scientific findings)
Note that only the last one, “New Knowledge,” has to do specifically with invention. While innovation can arise thanks to a new technology, an invention by itself is NOT innovation. As an example, we look at Silicon Valley, a hotbed of innovation made possible through the new silicon semiconductor technology. What made Silicon Valley famous was not the technology itself, but the large number of businesses that grew out of it from the “New Knowledge” of the technology.
Picture: An innovative idea growing into the real world.
End of Lecture 1: So what is an entrepreneur?
Answer: Someone who has the skills to put together the necessary resources to translate a differentiated product or service idea into an economic good. Or, someone who innovates.
Innovation is not the same as invention. Often, inventions can thrive in the lab, but when they poke their leaves into the outside world, they find a completely different environment. You have to take into account the economic climate around you. Often, you will fail. But you may just grow something that lasts longer than you will.
Image: The Wall Street Bull, representing a “bull market”. If you don’t understand this post, he will eat you alive.
Many people think that the words “business” and “company” are interchangeable. They are not.
Business: ”An organization engaged in the trade of goods, services, or both, to customers.”
Company: ”A form of business organization that carries out that enterprise.”
To simplify, a company is a legal entity - an LLC, or a corporation, or a trust, or a joint-stock company. When you flesh out a company and get to what it actually does, that’s a business.
In “corporate America,” businesses aim to maximize shareholder value. That’s easy enough to figure out, right? When stocks go up (in a bull market), everyone is happy and companies start hiring to expand. When stocks go down (in a bear market), everyone panics and companies start laying-off employees to cut costs.
For small, start-up, entrepreneurial entities with few, if any, shareholders, the goal is a bit simpler: to capture and retain customers.
The purpose of entrepreneurship: To make money! Actually, to “add value to a supply chain through creation or capture.”
The dollar art above is relevant because it gives me segue to one of the most well-known entrepreneurs of our time: Steve Jobs. Did Jobs invent the iPod? No. But he took the researched technology and focused on making a difference for his target customers and to his investors. Simply put:
Research and Development (R&D) converts money into technology.
Innovation converts technology (products and services) into money.
Entrepreneurs are concerned with the latter buzz-word: Innovation.
Lecture 1: What is Entrepreneurship?
Simply put, entrepreneurship is turning ideas into ventures. In the entrepreneurial trade, we like to say that new ideas are a dime a dozen (see above Dilbert comic). However, as Peter Drucker, a business management author, once said, “Most ideas are not businesses.”
In reality, Drucker said something more like “Most ideas are complete bullshit”…meaning that people who have new ideas often ignore the need to have them applicable to the real world. The “business opportunity” requires more than just an idea; it results from when technological ideas meet market ‘needs’ and business design. Entrepreneurs must learn to address all three of these factors in new ventures.
The Course: ”Business Fundamentals for Entrepreneurs”