Can Entrepreneurs be mass produced? by Vincent Chia

I refer to the article Can Entrepreneurs be mass produced? by Vincent Chia published on 18 August 2005 in Today Online.

Note: The writer is a co-founder and writer at Oaktree Research, a website with business and finance articles for all to read.

While reading this article, I believe that the theme of the article is closely related to an earlier blog entry of mine entitled “Can entrepreneurship be taught?”. (see also the comment by Heavenly Sword). Why is it so? If one agrees that entrepreneurship can be taught, one can make the naive inference that it is possible to mass produce entrepreneurs. However, it goes deeper into that. As I have argued in the earlier blog entry, one can teach the tools on how to advance the entrepreneur’s cause, for example, elevator pitch to an investor, writing a business plan and doing cost-benefit analysis whether the idea of the entrepreneur is viable. The problem is that one cannot teach the entrepreneurial spirit (as rightfully pointed out by Heavenly Sword) to the individual. The author brought it out clearly in his article what distinguishes an entrepreneur from a business development manager and salesman. What most people forgot aboout entrepreneurs, is that they are not just people jotting down some theoretical and innovative ideas on paper, but they also make it happen. I think that it’s hard to teach entrepreneurship to students because it is a contact sport. I find it hard to believe lecturers who have not started an enterprise to preach about entrepreneurship. I have encountered people like that, who does not know what it is like to be an entrepreneur and yet be academic about the subject. Being an academic myself, I have also experienced what it is like to be an entrepreneur.

Entrepreneurs are a special breed. I am not suggesting only the elite or academically brilliant can be entrepreneurs. Rather, it is like finding a concert pianist or track-and-field star; to nurture such individuals, you need specialised music and sport schools.

I disagree with the above view. The skill set required by an entrepreneur is general and easy to teach. I agree that some of those skills can be taught by a salesman and a business development manager. However, to utilize these skills to create an enterprise and develop a vision and strategy (or general picture) around that, is what distinguishes the entrepreneur from these specialized skills. I don’t think that the entrepreneur is a gifted artist. Most entrepreneurs find something that they are passionate about and want to create value by changing the landscape. Strangely, a lot of people forgot that most innovations made by entrepreneurs were borne out of necessity. There are several case studies in entrepreneurship which showed that the entrepreneur wanted to change the way how people think about the product and they brought it out into the market. If you badly need an example, think of the personal computer and the http protocol (that gives you access to the world wide web) which you are using to read this blog entry.

In the article, the author pointed out that there is a distinction between being a businessman and entrepreneur based on Robert Frank’s definition in an economics textbook. He also brought out two central features of an entrepreneur as compared to a businessman: innovation and sustainability. The issue here is the following: the entrepreneur can be a businessman but the converse is not true. Let me use a simple example to make that distinction: if there are 100 cafes in Singapore selling the same type of services and products to the customers and you want to start a cafe business mimicking them, you are not really an entrepreneur. You are a businessman. If you decide to start a cafe by differentiating your services and product from the rest of them, for example, promoting a new kind of drink which no others can produce or you cater to a specific group of customers, you are an entrepreneur and a business man. In the second case, you innovate the business and second, you make it sustainable as a business man. Since there exist other classes of entrepreneurs other than business ones, for example, social entrepreneurs and political entrepreneurs.

Another interesting point from the author goes in the following:

A businessman, in contrast, sniffs out opportunities to make money. His opportunistic approach can be time-sensitive. His gain is usually another’s loss.

Why do we want more entrepreneurs? An entrepreneur creates new value while a businessman finds existing but hidden value. In the zero sum game of an efficient or matured economy, a successful businessman implies another failed one. The entrepreneur increases the size of the pot to ensure there is more to go around. Thus, he is more valuable to the economy.

I agree that the entrepreneur creates new value, but I also dispute the definition that only the businessman finds hidden value. One of the features of an entrepreneur is that he/she can create new value by changing the nature of the market landscape. In other words, he can find hidden value like the businessman. By identifying a particular missing spot in the market and create a “blue ocean” around that missing market niche, that is considered a form of business. In the business pursuit, it is not necessary that it’s a zero sum game. The author also forgot about large corporations can also cooperate to create new products that might change the market landscape. The issue is much more complex than that.

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