What makes someone an entrepreneur? Am I an entrepreneur? Are you an entrepreneur? Do I know any entrepreneurs? Is it genetic?
Can I catch it? Is it fatal? Wait, what? The word “entrepreneur” seems to be thrown around everywhere for everyone doing anything. It’s used to describe celebrities and business tycoons like Beyoncé, Elon Musk, Marie Kondo, and Jessica Alba.
But your brother who keeps bringing up his idea for coffee-flavored toothpaste might make the list too. Mmm! Entrepreneurs pop-up in all types of industries and can have widely different backgrounds. Some build personal brands, while others work tirelessly on a physical product they believe in. Really, anyone can be an entrepreneur, given an idea and the right tools to develop it into a functional business.
Together, we’ll develop our business acumen and learn the importance of grit, determination, and a fair bit of luck. I’m Anna Akana, and this is Crash Course Business: Entrepreneurship.
[Opening Music Plays] Some people define an entrepreneur with buzzwords like “trailblazing,” “innovative,” “problem-solving,” “passionate,” and on and on. These might all be traits that entrepreneurs can strive for. But, at its core, an entrepreneur is someone who sees a need and takes on the financial risk to start a business to fill that need.
That may sound kind of vague, but that’s kind of the point. There’s no cookie-cutter entrepreneur. Unless you, like, start a business to sell cookie cutters. In which case, yes, there is a cookie-cutter entrepreneur. Your idea might take the form of a physical product with a physical store — called a brick and mortar business.
In Montana, Charlie and Barbie Beaton of Big Dipper Ice Cream took their passion for locally made ice cream from one shop in downtown Missoula to appearing on Good Morning America. Daaaaaamn. Or instead of a tangible product, your venture might be a national empowerment network. GirlBoss New Zealand was founded by 20-year-old Alexia Hilbertidou after she was the only woman in her upper-level physics class.
Her goal is encouraging high-school-age women to pursue STEM and leadership careers.
Or you might set your sights on an international online media empire, like Arianna Huffington, the founder and namesake of HuffPost. She founded her site (with partners) as a friendly alternative to news aggregators. And she eventually sold it to AOL in 2015 for $315 million US dollars. Get it, Ari. It’s clear that entrepreneurs come in all flavors.
I mean, according to the Global Entrepreneurship Monitor, over 100 million businesses are launched each year. That’s 11,000 per hour or 3 new businesses per second. …
There they go! So instead of just defining who is an entrepreneur, since it is such a wide scope – we can instead narrow down our definition by understanding who isn’t one. Let’s go to the Thought Bubble. Say Congress works for Me-Wow, a feline health and fitness company. He notices a need — a shocking lack of cat transportation — and comes up with the idea for the Cat-Cycle, which he pitches to his boss.
Me-Wow immediately sends the Cat-Cycle into production because it’s a genius idea, obvi and it flies off the shelves. Even though Congress is using an entrepreneurial mindset, by our definition, he isn’t an entrepreneur yet. The company Me-Wow actually took the financial risk to develop, produce, and sell the Cat-Cycle. Meanwhile, Beetle sees the same need for cat transportation and sketches out the Cat-Board in his personal idea notebook after work.
He’s gained valuable experience working for Me-Wow and develops the Cat-Board in the evenings and on weekends before striking out on his own.
Using his personal savings, Beetle commissions a prototype that he shops around to local stores. A few are interested and he sets up contracts with them. As his sales begin to grow, Beetle creates new designs, but he doesn’t pay attention to what his customers like or dislike about the Cat-Board. Because he failed to make valuable improvements to the Cat-Board for his customers, sales plummet. It’s a tough decision, but Beetle cuts his losses and sells his Cat-Board designs to Me-Wow, which revamps his idea as the Dog-Board.
Beetle is an entrepreneur because he saw a need and took the financial risk to fill it! It didn’t go so well because he didn’t incorporate customer feedback. But now he knows where he went wrong and won’t make the same mistake in his next entrepreneurial endeavor. Thanks Thought Bubble! For a while, the classic story of an entrepreneur was someone who created one business that became a long-term project, like opening a new restaurant or founding a tech startup to make flashy phone games.
But that’s not the whole picture anymore. There’s been a shift in the global job market that has opened the door for entrepreneurship to become more mainstream. Specifically, I’m talking about the rise of the Gig Economy. Contract work, called gigging, is becoming more popular and taking up more of the labor market. And I don’t just mean gigs like musicians and comedians hopping between open mic nights.
Instead of a long-term relationship where employees are paid salaries by the hour or year, businesses are temporarily hiring people for specific projects. This shift has made it financially easier for entrepreneurs to find people to get their businesses going, without committing long-term to paying employees. And it’s allowed early-stage entrepreneurs to find flexible work to support themselves as they develop their product or service. This doesn’t mean everyone in the gig economy is an entrepreneur, it’s just given more people the opportunity.
So a more traditional path might be joining an accounting firm right after college and working 9 to 5, Monday to Friday until you retire.
Or die of boredom. Spreadsheets? For LIFE?? NO THANKS Some people might feel fulfilled with that kind of steady employment.
And the stability that comes from being a salaried employee with health insurance can be incredibly valuable. Others, like us entrepreneurs, might itch for more independence. In the gig economy, you could have a couple ways to make money, in addition to or instead of that 9-to-5 job. And you can go online to look for gigs from anywhere — not just your real-life community. So you might consult for a network of women small business owners on their day-to-day accounting, create vlogs with tax software tips, and sell unicorn knit hats on Etsy that are knit out of the softest fabric there is.
On the plus side, this allows workers to build robust portfolios of work and find fulfilling gigs.
Having separate jobs can also provide a stronger sense of income security than one full-time job. Even if you lose one, you’re still making money. All hail the side-hustle! Today’s entrepreneurs are well-suited for the gig economy because we know how to hustle.
We’re independent thinkers who are comfortable with developing our own diverse income streams, marketing ourselves, and connecting with others. I mean, who hasn’t had a Lyft driver who moonlights as a cinnamon roll artisan, right? But there are still problems with the gig lifestyle.
Sure, someone might become a Lyft driver to help fund their sugary dream. But they’re almost certainly not doing it because driving strangers around is their passion.
For some people, participating in the gig economy is a necessity, not a choice. Scrambling to pay rent and afford food is another reason to have a bunch of gigs. And, depending on the country and government, gig workers can have fewer legal protections – like mandatory breaks and standardized pay — or they might have a harder time maintaining insurance and retirement accounts. This makes some countries more attractive to entrepreneurs, such as New Zealand, Singapore, and Denmark, based on The World Bank’s annual analysis of the “Ease of Doing Business.” But even in those countries, there’s a difference between legally being able to take a break and actually taking a break.
It can be a struggle to turn off the hustle — especially for those of us trying to create a personal brand with our art or online presence.
But taking time for fun hobbies and spending time with friends and family are important parts of being successful, and so necessary to stay mentally healthy. Trust me! So it’s not all blue skies and rainbows. But if you ever wanted to be an entrepreneur, the gig economy has made it more possible now than ever.
Even still, entrepreneurship isn’t easy. Taking a financial gamble is stressful, and so is working long hours to try and get a project off the ground.
I know for me, the lack of structured work time often means that my business has no off time. And if I’m not careful, I can work around the clock and get myself exhausted. But tons of us take the leap to start a new business and stick with it through the ups and downs, so what exactly keeps us motivated?
At the top of the list is freedom. Entrepreneurs get to be their own bosses. This can mean setting your own hours and deciding on dress codes…
or lack thereof. Sweatpants all day everyday amirite? Maybe you want to work from bed or while you travel, writing emails by a pool. And for traditionally underrepresented groups in business like women, people of color, or the LGBTQ community, ding ding ding, I am all those things.
It can mean defining your own destiny.
You can create an inclusive company culture and work environment, rather than feeling stuck in an uncomfortable — or even possibly illegal — situation with a boss or coworker. If someone keeps talking over you and dismissively says women can’t be funny, you don’t need to hire them for your writer’s room or film set. Or if a coworker from a previous job got fired for having a natural hairstyle, you can create a business where that would never happen. You wield the power. A study in the Social Science Research Network journal found that entrepreneurs start companies because they mostly believe that: They are inherently more valuable than how they appear on paper.
They are wasted working for someone else Their resumes don’t show “the real them” Large companies can’t appreciate their full potential. And They are capable of turning their internal value into real life money. Basically, entrepreneurs believe in themselves. And sure, building self-confidence over time isn’t always easy, but it can be a powerful motivator. And then, there’s potential wealth.
Yes, there’s financial risk in starting a business, but there’s money in running a successful one. Entrepreneurial lore is full of rags-to-riches tales, where people pitch the next SnapChat and are launched into the business stratosphere. Like, Oprah Winfrey has said she spent her early childhood wearing overalls made of potato sacks. But she became North America’s first black multi-billionaire and “Queen of the Daytime Talkshow.” Sure, this is the stuff of inspirational posters, and not everyone can make it this big.
But entrepreneurship does create a culture of opportunity that might work for some non-traditional workers. Of course, every entrepreneur with a massive success has also had hundreds of failures. Yep, the dreaded F word. Lean Startup methodology is basically the globally recognized guidebook for entrepreneurs created by Steve Blank and Eric Ries.
And it says stumbling is perfectly fine if we learn as we go.
But to identify and learn from failures, every entrepreneur has to ask themselves: what does success look like to me? Is it earning $30,000 a year in your food truck and skiing every weekend? Is it selling your idea for a million dollars? Is it becoming the CEO of a mid-size media production company and writing novels on the side? Thanks for hiring us, Hank!
Also where is the sequel and when can I star in the movie adaptation? Or is it owning 6 cats and producing your own films? Whatever success is, it’s entirely up to you. Of course no one wants to fail. But together we’ll learn how to redefine failure and pick up the pieces if it’s truly unavoidable.
It’s not that successful entrepreneurs never faced failure; it’s that they didn’t quit. So the bottom line is /anyone/ can be an entrepreneur with a little grit, determination, and luck. And remember, you may have stopped believing in unicorns, but they’ve never stopped believing in you. Next time, we’ll talk about that fundamental piece at the core of any entrepreneur: their ideas — where ideas come from, who to take them to, and how to turn them into feasible businesses.
Thanks for watching Crash Course Business.
And thank you to Thought Cafe for the amazing graphics. If you want to help keep Crash Course free for everybody, forever, you can join our community on Patreon. And if you want to learn more about labor markets, check out this Crash Course Economics Video..
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