Startups · Entrepreneur

How does entrepreneurship differ from self-employment?

Syam Vemula Senior BI Consultant at InfoMagnus

September 25th, 2016

A ton of consultants and other people that self-employ themselves might not be entrepreneurs. What is the real difference between one another?

David M

September 25th, 2016

These are the literal definitions and explanations of what entrepreneurship is.


Entrepreneurship-from French word "Entreprendre" means to undertake. One who organizes, manages, and assumes the risks of a business or enterprise.-Webster


Entrepreneur- "A person who destroys the existing economic order by introducing new products and services, by creating new forms of organization, or by exploiting new raw materials.-Joseph Schumpeter-economist


An entrepreneur is someone who perceives an opportunity and creates an organization around it. The entrepreneurial process involves all the functions, activities, and actions associated with perceiving opportunities. -Portable MBA in Entrepreneurship Babson-Leading Entrepreneurship program for 20 years.


As for self employed? You are asking a very general question. I would argue some self-employment can be classified as entrepreneurship and some probably could not. There is no doubt entrepreneurship gets thrown around a lot these days. At the same time this notion that it has to be disruptive is nonsense.


I would argue a great teacher is an entrepreneur, perhaps the greatest kind because he or she is literally influencing and growing young minds. Someone who opens a sandwich shop is self-employed and an entrepreneur. Too many people want to think about entrepreneurship in this box of the next huge million or billion dollar tech start up, but the majority of entrepreneurs are small businesses. And I would argue that while they are providing a need, most are not being disruptive. The disruptive ones usually take the spotlight for entrepreneurship, but they are few and far between.


Nabomita Mazumdar Top 100 Women Achiever Awardee by Ministry of Women and Child Development, India

September 25th, 2016

Self employment and Entrepreneurship differ in terms of revenue generated and economies of scale. When you are Self-employed , you can be a consultant building a portfolio through gigs. But as an Entrepreneur you are building a firm offering product or services. 

An Entrepreneur holds larger affinity to expand, however self-employment would need partnering or even out-sourcing to produce more.  

However, revenue and impact generated cannot be measured comparing the two.

For eg: Larry Page was not self-employed even when he started Google. However, Tom Peters remains self-employed till date. The revenue by the former cannot be compared to the impact generated by the later. 

Joe Albano, PhD Using the business of entrepreneurialism to turn ideas into products and products into sustainable businesses.

September 26th, 2016

Syam - I'm curious, why do you wish to make a distinction? 

Sebastien Mirolo CEO DjaoDjin inc.

September 26th, 2016

Now to confuse everyone, the French government defined a status of "auto-entrepreneur" for self-employed people :). 

David M

September 27th, 2016

Arthur, if I am partially correct then I suppose that means you are admitting you are partially wrong which was my point in the first place.  Fair enough. 


 

In terms of the organization being the employer-and if you go back to the days when the organization was founded in entrepreneurial spirit, before it became a large corporation that was so rigid it often is difficult to be entrepreneurial… sure I can maybe see your reasoning of replacing entrepreneur with employer because its less confusing….maybe but it’s a huge stretch.  It is just my opinion to state I don’t agree with you using employer as a replacement for entrepreneur.  I don’t think I’m alone in this by any small estimation.  But if you have your following who like it, and it sells your books go with it.  No one is going to start replacing the word entrepreneur with employer so I wouldn’t invest much time trying start up a grass roots twitter campaign.   But I do understand your approach to it.  I’m not saying it is wrong just different.


 

The problem is that one can be an employer but lack entrepreneurial skills and mentalities.  And an employer as an organization can become rigid and stale and lack entrepreneurial ideology over time.  That is why the concept of intrapreneurship evolved-to provide employers with a way to get back to entrepreneurial roots within to evolve and keep the company moving forward.  An employer as a CEO can buy a small business with a dozen employees.  That does not mean he/she has the entrepreneurial skill sets to grow the business or evolve it or start new divisions.  So again, in some situations the employer has entrepreneurial traits, but not all which to me makes using it to replace entrepreneur void, more confusing, and flat out incorrect in some situations.


 

 

“Educational institutions can not be entrepreneurial due to tradition, culture and structure. “  What do you think a college is ?    When a university builds a new sports stadium that brings in new programs, what is that?  When a university creates new curriculum that brings in new students and new revenue that is entrepreneurship.  At the core a university is a business.  Especially with some of the new private/public partnerships that are created around new programs and departments.


 

“There are no schools which teach students to be entrepreneurs, except in elective courses.”  Simply not true. Elective courses are part of MBA’s in the majority of universities but also requirement core courses in others where the degree is in entrepreneurship.   There are also  Entrepreneurship PhD programs in the country, not many but they are growing.


David M

September 27th, 2016

Arthur, with all due respect, you are being quite philosophical which again was my point in part. I don't have a problem with it, just pointing out your philosophy has some holes. As I stated I'm not completely disagreeing with it. You are trying to substitute 100 year old definitions and understandings and foundations of entrepreneurship for your own and then connect them to buying your books. You have a hook. I understand. In many of these posts you pitch your book. That is entrepreneurial.


I have no problem with opinions when they can be backed up for which you did in part which I appreciate. I corrected you regarding your statement that there are no entrepreneurship programs because it is very simply incorrect information. Others in this forum may want to study in an entrepreneurship program, for which there are not many but a dozen or so out there. They are not merely electives, but rather core curriculum.

Your statement about colleges not being entrepreneurial is probably correct for a vast majority, and one reason so many colleges are currently failing students. However, again there are very entrepreneurial programs and universities out there, so to blanket state colleges are not entrepreneurial is incorrect.


Suggesting the term entrepreneurship is incorrect or confusing when thousands of people all across the world use it, and substituting your philosophy about employers and employees is fine. It is oversimplified for my liking, but it is a discussion for that very purpose. It hopefully gets people thinking.

May you have continued success.

Roy EA Helping Clients Build Products, Processes, & Profits| Adjunct Chief Financial, Research, or Operations Officers|

September 26th, 2016

David's answer is a fantastic start.  
I would venture thar self-employment implies a lifestyle business.  The individual is performing a service or delivering a product, and in the process is generating an income that lets him or her to live (comfortably or not) according to one's own dicta.  
An entrepreneur is essaying to develop an enterprise, using systems and principles that will employ others, to enjoin a team under a common mission to achieve a desired vision.

Roy EA Helping Clients Build Products, Processes, & Profits| Adjunct Chief Financial, Research, or Operations Officers|

September 26th, 2016

Joe: 
There IS  a fundamental diffeence.  One plans to build an enterprise;  the other plans to work on one's own.  One will need other folks to help with the mission and vision , and therefore needs leadership skills.  The other will rely on self-direction.

Joe Albano, PhD Using the business of entrepreneurialism to turn ideas into products and products into sustainable businesses.

September 26th, 2016

Roy:
I'm not arguing  about whether there is or is not a difference. I'm wondering how understanding that difference will impact Syam's life.

Roy EA Helping Clients Build Products, Processes, & Profits| Adjunct Chief Financial, Research, or Operations Officers|

September 26th, 2016

Joe...
Picking the wrong model to study, no matter how prosperous thatbexample, would waste time and effort.  That was my presumption.  Because it engages way too many of our clients.