Saturday, April 25, 2009

The Entrepreneur

An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource. - Peter Drucker

Entrepreneurship is the process of starting new organizations or even revitalizing mature organizations, particularly developing new businesses in response to identified opportunities. Entrepreneurship is often a difficult endeavor, as a vast majority of new businesses fail. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating several job opportunities.
Entrepreneurship is often associated with uncertainty, particularly when the venture involves a novel idea for which a market never existed. These ideas can be new products, radical concepts, or perhaps incremental innovations for existing products or services. An entrepreneur is an individual having the willingness and the ability to convert an idea or an invention into a successful business venture. Entrepreneurship, forces "creative destruction" across regions, markets and industries, simultaneously creating new products and business models, thus providing scope for many more ideas to settle upon in future. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth.
Entrepreneurs have many of their character traits matching with the leaders, similar to the early great man theories of leadership; however trait-based theories of entrepreneurship are increasingly being questioned due to an exponential increase in number of the exceptions. Entrepreneurs are often contrasted with managers and administrators who are said to be more methodical and are low on risk-taking abilities.
In the classical context, it was often asserted that managers from business school cannot be good entrepreneurs because they are made to learn the process of calculating risks and rely less on their instincts. Most entrepreneurs who made a mark across the corporate world, actually never went through the rigors of a business school. In the recent past though, there has been a shift in trend and there are several instances of young business and technology graduates coming forward to take up new ventures. With the advent of IT a lot of new ventures have come up with innovative ideas, some of which have changed our lives completely.
According to the founder of SUN, Vinod Khosla, a venture capitalist these days, an entrepreneur must have some peculiar traits to be successful. Firstly, he should be able to initiate actions and take advantage of opportunities. In the world of business, opportunities come and go. An entrepreneur has to be a man of action. Secondly, he should not be risk averse as business is a game of risks and returns which may turn to any side depending upon external and internal circumstances some of which can never be predicted with absolute certainty and he needs to have enough motivation for keeping himself and his employees charged up for future endeavors.

The trait which is paramount for any entrepreneur is the decision making ability and the capacity and will to work hard. Without these a successful venture is simply not possible. In his earlier days Bill Gates was often quoted to be a workaholic working for several days, surviving on coke and pizzas in his office. Decision making ability perhaps is a trait that he should possess in order to become an efficient and successful manager and leader. If an entrepreneur does not have the decision making ability, he is bound to lose out when opportunities go by and he is unable to decide.

Adding to these points, some researchers argue that entrepreneurs exhibit extreme optimism in their decision-making processes. In a study of 2004 entrepreneurs they report that 81% indicate their personal odds of success as greater than 70% and a remarkable 33% seeing odds of success of 10 out of 10. Further, Cole et al in 1959 found there are four types of entrepreneur: the innovator, the calculating inventor, the over-optimistic promoter, and the organization builder. These types are not related to the personality but to the type of opportunity the entrepreneur faces.
In India, the harbingers of entrepreneurship in the IIM fraternity have been many but few deserve special mention. Sanjeev Bikhchandani of fame who started off with a small startup sitting in his father’s garage conducting salary surveys and building and marketing databases of pharmaceutical trademarks. Today his firm is one of the largest hit job portals in India and they have expanded to new domains like matrimonial and real estate online services.
Rashesh Shah is another premier example of the entrepreneurial spirit. He cofounded Edelweiss Capital in 1995 with about 250,000 US$ was an executive at ICICI. Today Edelweiss Capital is one of the largest integrated investment banks of the country with 56 offices across 21 cities.
During the recent years, entrepreneurship has come up a big way with the likes of Google, Amazon and Yahoo coming up; IT has come up a big way promoting entrepreneurs in allied fields giving out way to social entrepreneurship, internet entrepreneurship and knowledge entrepreneurship. India which is a rising star, with a booming young population and untapped opportunities is an ideal stage for the educated and bright young minds to come forward and bear the torch of entrepreneurial success. This will not only bring in economic prosperity but also bring about the much needed social equality among the people of the country.

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