Entrepreneurship - A Working Definition at Harvard Business School
The history of the word "entrepreneurship" is fascinating and scholars have indeed parsed its meaning. The definition used at Harvard Business School. It was formulated by Professor Howard Stevenson, the godfather of entrepreneurship studies at HBS. According to Stevenson, entrepreneurship is the pursuit of opportunity beyond resources controlled.
"Pursuit" implies a singular, relentless focus. Entrepreneurs often perceive a short window of opportunity. They need to show tangible progress to attract resources, and the mere passage of time consumes limited cash balances. Consequently, entrepreneurs have a sense of urgency that is seldom seen in established companies, where any opportunity is part of a portfolio and resources are more readily available.
"Opportunity" implies an offering that is novel in one or more of four ways. The opportunity may entail: 1) pioneering a truly innovative product; 2) devising a new business model; 3) creating a better or cheaper version of an existing product; or 4) targeting an existing product to new sets of customers. These opportunity types are not mutually exclusive. For example, a new venture might employ a new business model for an innovative product. Likewise, the list above is not the collectively exhaustive set of opportunities available to organizations. Many profit improvement opportunities are not novel--and thus are not entrepreneurial--for example, raising a product's price or, once a firm has a scalable sales strategy, hiring more reps.
"Beyond resources controlled" implies resource constraints. At a new venture's outset, its founders control only their own human, social, and financial capital. Many entrepreneurs bootstrap: they keep expenditures to a bare minimum while investing only their own time and, as necessary, their personal funds. In some cases, this is adequate to bring a new venture to the point where it becomes self-sustaining from internally generated cash flow. With most high-potential ventures, however, founders must mobilize more resources than they control personally: the venture eventually will require production facilities, distribution channels, working capital, and so forth.
SOURCE: HBR.org, gcase.org