How to Judge Entrepreneurship in a Large Company

WHAT IS ENTREPRENEURSHIP? The Merriam-Webster Dictionary definition of entrepreneur is “one who organizes, manages, and assumes the risks of a business or enterprise.” Each of these words is important. Entrepreneurship occurs in a business context, meaning the objective is to sell a product or service and make a profit. In business, risk is associated with uncertainty, which most commonly arises from investing in a product or service without assurance of sales and profits, usually implying that the product or service is new and innovative so that there is limited experience to draw upon. Assumption of risk is particularly significant because it means that the entrepreneur himself/herself stands to lose something, whether it is money or reputation (fortunately, financial risk is often assumed by the organization). Including the words organization and management imply that the entrepreneur is the leader, the one who sets the agenda. Entrepreneurship can happen in any business context, all the way from large corporations to start-up companies. Large companies can afford to take on large opportunities, in terms of scope or needed resources, whereas start-up companies are the best way to pursue point solutions that extend an existing context or pursue ideas that are more radical and yet require fewer resources. Large companies often encounter difficulties executing new ideas because it is difficult to change the direction of an existing organization. For basic questions that help judge the level of entrepreneurship in a large company, see the “How to Judge Entrepreneurship in a Large Company” sidebar. The most effective way to pursue a new idea is by starting with the germ of the idea and then attracting people who are excited and committed to making it happen. That can happen in large companies, but the path is smoothest in a start-up. Although a start-up doesn’t necessarily have more talented people, it typically has more focus on customer needs in order to ramp up sales quickly. Many students start their professional careers with large corporations, and some leave to become entrepreneurs, starting up new businesses lacking the resources of a large company. Entrepreneurship i s hard and perceived risks are high [1]. Entrepreneurs usually need the motivation that comes from pursuing one’s own great ideas rather than somebody else’s. One reason entrepreneurship is hard is that the idea is only a seed, a starting point, and technology is an enabler but only part of the challenge. Subsequent to the idea, a lot of innovation is needed, and making the idea work in the real world is challenging. There is a wealth of issues that have to be dealt with, including financing the venture. Many of these are listed later.