Entrepeneurship and Innovation

On Being an Internet Entrepreneur

by Jon on November 28, 2009

Entrepreneurship is one of those terms with a lot of confusing and conflicting definitions.  To some people, it’s about creating a small business or  simply creating an income stream.  There’s nothing wrong with either of those, but they aren’t entrepreneurship.

Every day on Twitter, I get spammed with something along the lines of this:

I’ll set aside the irony of sending me something like that (even if the stock price did drop a lot from the initial wealth-creation of Eprise).  I know that there’s countless people out there who find the idea of financial independence so compelling that they’re willing to set aside their disbelief and buy into any sort of Internet snake-oil scheme.  What I bristle at is the term “entrepreneur” being applied to things like multi-level marketing.  In fact, entrepreneurship and “small business” are not synonyms either.

I like Peter Drucker’s definition from Innovation and Entrepreneurship: entrepreneurship is about using the tool of innovation to exploit change.  Peter wrote about this sort of thing long before the Internet became important, and I still feel his thoughts on entrepreneurship are as relevant today as they were in the 20th century.

Innovation is about creating something new — it could be a new product, a new process, a new business model, a new type of corporate culture.  But it’s fundamentally about creation.  It is not creation if you are simply replicating someone else’s idea (although imitation, along with a dash of innovation, is fine).  It isn’t creation or innovation if you are doing multi-level-marketing, or if you’re simply implementing someone else’s idea.

What does it mean to exploit change?  It means looking for an opportunity to solve a problem that emerges because the world is changing in some significant way.  It could be a new behavior that people have adopted, a new type of pain someone is feeling, a new desire that didn’t exist before, a fluctuation in the cost of a good or service, a new distribution channel.

If you can identify change, there’s an opportunity to add value through innovation… And what’s great about the Internet is that is is constantly changing — making it an ideal landscape for real entrepreneurship.

Here’s a challenge to anyone reading this: if you want wealth and financial independence, and you think you have the stomach to do something as crazy as being an entrepreneur, then stop reading about snake oil, and stop reading this.  Instead, go out on the Internet in search of change.  From the chaos or pain wrought by that change, identify problems to solve.  Then figure out how to apply innovation to solve the problem. And while we’re at it: you can be an entrepreneur in an existing company — it doesn’t have to be about starting a whole new business (although that’s the usual and most unencumbered way to do it).

That’s all you need to do.  The rest is details.

(Jon’s note:  I knock MLM a bit in the above article, as a commenter noticed.  Okay, it isn’t always inherently evil.  And some of the founders of MLM companies are bona-fide entrepreneurs.  But you aren’t an entrepreneur because you’re selling distributorships!)

Thank you for reading this article. Please follow me on Twitter to hear more from me on innovation, games and entrepreneurship. If you'd like to learn how games can transform your business, also check out my book, Game On: Energize Your Business with Social Media Games.

{ 6 comments… read them below or add one }

Steve KaneNo Gravatar November 28, 2009 at 4:32 pm

Hi Jon

I 99% agree with everything you write here

but I don’t get why you take jabs at multi-level marketing.

certainly at times MLM has been abused by nefarious cads.

but then again, so has just about everything.

and i dare say Mary Kay Ash is one of the great American entrepreneurs of the 20th century. and her company, Mary Kay Cosmetics, was and still is all about MLM

also, i might broaden the definition of “innovation” and “new”

I believe Eiji Toyoda is also one of the great entrepreneurs of the 20th century. but its hard to argue he invented anything (not even a process, like Henry Ford). but he did start a new company, Toyota

anyway, minor quibbles, great post

JonNo Gravatar November 28, 2009 at 5:02 pm

Steve, thanks for the comments. You’re right that MLM isn’t inherently evil. It just happens to be abused more than most, because the inherent social/viral elements (along with the unlikely dreams) of MLM fit right in with the natural environment of the Internet. Mary Kay Ash was definitely an entrepreneur, and Mary Kay Cosmetics is a great company–but it doesn’t make someone into an entrepreneur if they are part of the marketing force.

On Eiji Toyoda: of course he was a great entrepeneur! He spotted the opportunity to create a huge domestic market for vehicles in Japan, visited Ford in the US (considered them inefficient) and wove the concept of kaizen into his company and led the development of the ‘Toyota Way’ culture. Innovation can be about going after underserved markets, improving processes, and even about creating new company cultures (for another example, Ben and Jerry’s Ice Cream is about creating a product that isn’t at all new–but it’s about a particular company culture/ethos that has become central to how they operate and market the company’s products).

Vivek KrishnanNo Gravatar December 6, 2009 at 10:16 am

I love this post which is expressing the true color of entrepreneurship. Entrepreneur seems to be a word which has been used rather frivolously.

Godswill igbokweNo Gravatar March 17, 2010 at 12:01 pm

Very impressive and conscise.more of this please.

emma mboguNo Gravatar September 1, 2010 at 6:56 pm

this is a good write up. please teach us more about the topic and how it can work for an average African in the rural area

Impulsive DomainsNo Gravatar June 14, 2011 at 11:54 pm

yeah dude nice one…
but hey why are all those guys so crazy like i am and we all are trough to much eletronic information, we can’t get new ideas because we got this overdose of services and fast fast faster Tools, apps and so on… just an ugly thing ;)

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