Entrepreneurial necessity versus opportunity

Both are valid, just different supports systems are needed.

Across my global travels, I’ve been asking what entrepreneurship (ESHIP) means for different stakeholders. From the entrepreneur to a support organization or government, they differ a bit. One thing that recently comes to light is the dichotomy of necessity versus opportunity.

A ‘necessity’ entrepreneur is a trader or shop owner, performing a sort of small business management. Still important since they create jobs and income for their families. This is what some refer to as traditional services, mainstreet business, freelancers, or micro-enterprises.

An ‘opportunity’ entrepreneur is a person with the vision to see an innovation and the ability to bring it to market. This is what some refer to as innovation-led or tech-enabled, or a moonshot idea.

The Kauffman Foundation has made reference to this dichotomy, as well as other global indicators like Startup Genome and the Global Entrepreneurship and Development Institute (GEDI). While Kaufman makes the distinction because it offers some insight into the influence of economic conditions on overall business creation, the others make the distinction to clarify that having high entrepreneurship quantity is not enough; we need to have high entrepreneurship quality as well.

Case in point:

“…the TEA (total early-stage entrepreneurial activity) is negatively correlated with economic growth, economic freedom, and global competitiveness. The greater TEA the worse your economy is — Uganda has the highest TEA rate in the world but few would argue that Uganda is more entrepreneurial than the United States.
— Global Entrepreneurship Index 2018

I’ve been a long proponent of being data-driven and removing fluff. This helps us better understand how to maneuver the levers of economic development to be more successful with less effort.

80 20 Rule: What’s the 20% effort that will deliver 80% impact? (Pareto Principle)

The perception of ESHIP success can be manipulated through the degree of measurement complexity, or lack thereof. And it begins with how you define it from the start.