Meaning of "entrepreneur" (Or... Encyclopedia vs. Dictionary)

In My Humble Opinion
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I got into an argument with a friend of mine about the meaning of the word “entrepreneur”. We were watching TV and an announcer declared that Jennifer Lopez was an entrepreneur because she started a business selling perfume branded with her name.

I felt that she wasn’t an entrepreneur because she wasn’t taking much of a risk and wasn’t creating a product that met some need that hadn’t been recognized before. My friend felt that the title was valid because she was a business owner and all businesses have some degree of risk.

That bothered me because it seems to reduce the value of the title of entrepreneur. It always seemed to me that to be an entrepreneur was a more respected title than simply being a business owner.

We looked it up and most of the online dictionaries used the following or similar definition:

Which seems to agree with her. However, the Wikipedia, a free encyclopedia describes an entrepreneur more like I had expected:

(It actually goes farther, but the rest isn’t relevant to the argument.)

You can see the definitions at OneLook.

So what do you think? Am I wrong? If so, doesn’t that cheapen the title of entrepreneur?? Or am I correct in believing that the dictionaries are simplifying too much?

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At the request of the OP, and since this is more suited to IMHO, I’ll move it.

-xash
General Questions Moderator

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Welcome to the Boards, MattBrown. I don’t think there’s a factual answer to this question, so I’ve asked that this thread be moved to somewhere where it can be discussed.

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Cor, they work fast around here. Thanks, xash.

First off, I think you could argue that Lopez does fit the second definition - the market value of celebrity status is not well established, and she is trying to push it into different niches with her various activities. And she has assumed some risk to her reputation beyond that of merely lending her name to someone else’s perfume.

Secondly, it’s not clear to me that “entrepreneur” is necessarily a term of greater respect than “business owner”. It also can have shades of meaning that suggest possible con-artist or businessperson operating at the fringes of legality. Certainly it had that meaning here in the late 80s and 90s.

It is true that all business owners carry some risk. Even passive share owners do. But clearly any small business or owner-run business carries with it idiosyncratic risk that the market doesn’t value very well. The essence of entrepreneurship is someone whp reckons they have a better idea or talent that the market currently recognises.

So it seems to me the risk element of entrepreneurship is a consequence of the creative, market making aspect of it. It’s not that entrepreneurs are risk takers, rather that they have to take risks to find and exploit niches.

Why don’t you think Lopez fits the second definition?

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So by your definition, someone who’s rich can’t be an entrepreneur unless they invest their whole fortune in a venture, and someone who opens a grocery shop with his own money can’t be an entrepreneur because grocer’s shops aren’t original or fulfilling untapped needs.

I think the second type is definitely an entrepreneur. As to the first, if you only make a small amount of money from business ventures (like J Lo), you’re not primarily an entrepreneur, but you’re still involved in entrepreneurial activities if you’re choosing to invest money in starting a business and taking some involvement in what that business sells or how it runs.

It’s obvious that an entrepreneur is different from an investor (individual or bank/corporate) who puts up money but has no involvement in the business. (Or rather that there is a somewhat grey scale with sole-trading entrepreneurs at one end and passive investors at the other). So whether J Lo is an entrepreneur or not depends on how much she is involved in the business, not what proportion of her finance is involved or how original the idea of an actress selling clothes/beauty products is. IMHO.

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My definition of entrepreneur was more along the lines of the encyclopedia and required there to be something new or untried. The risk falls into place since there is definitely more risk in trying something new than in something that is tried and tested. I don’t think that just anyone owning a business, risking all their money, and following a tried and tested business plan should be considered an entrepreneur.

When I heard about J. Lo’s perfume, I immediately thought of Liz Taylor. I thought that there were other celebrities who had done the same thing and made a bundle of money, so I figured it was practically a sure thing and not at all a new idea. If hawthorne is correct about the market value of celebrity status and her pushing it into new niches, then I would agree that she is an entrepreneur. However, the friend I was arguing against believed that it wasn’t a new idea and that J. Lo was doing something that had been tried and found be easily profitable, but was still considered an entrepreneur.

refusal , it should be clear now that I would think that of your two examples, both could be entrepreneurs, but they have to be doing something new. Not just opening a grocery store, but something about the store or the running of it must be new.

A very good point about the involvement in the business, I might add.

I don’t think someone opening a McDonald’s franchise and following the corporate business recipe is an entrepreneur. However, the first definition, as well as the friend I was arguing with, would say that they were. The second definition would say that they were not.

From what you both say, I think you tend to agree more with me that someone could fit in the dictionary definition, but not be considered an entrepreneur.

True?

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I would just add that the idea that entrepreneurship has an element of “something about the store or the running of it must be new” can be interpreted pretty widely and I’d still accept it.

For instance, I would accept that starting up a grocery could be entrepreneurial if it were, say, marketed very differently, or had unusual stock items, or was in a neighborhood not previously served by any grocery. A 7-11 franchisee could meet my criteria if he or she opened it, say, in Palm Springs, or on Mars, or in downtown Baghdad; or if he or she sold only blue items, or refused to sell hotdogs from a carousel rack, or whatever.

I would scoff at the idea of J Lo being an entrepreneur not because I doubt that her perfume or its marketing could be new and different in some significant way, but because I doubt she’d personally have had anything to do with whatever might be new and different about it.

Incidentally, I don’t believe that celebrity perfumes generally make a bundle. I recently read The Emperor of Scent, which makes it sound as though any perfume launch is risky.

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Anybody who perceives a potential reward in the marketplace and attempts to exploit it is an entrepreneur, IMHO. That, of course, includes everyone who is in business, whether it be building computers, designing clothes or opening a gas station. They’re all new ventures when they start, and the people starting them are all assuming risk.

And the majority of businesses faill including jewelry lines, software developers and hamburger franchises.

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Well said, emilyforce, I agree with you completely.

Ringo, you believe exactly as I think my friend does. I don’t agree with you, though and you are supported by the dictionary, but not by the encyclopedia.

My question to you, then, is what is the difference between the term “business owner” and a the term “entrepreneur”? :confused:

I don’t doubt that the majority of all businesses fail, but I also know that it is rare that a McDonald’s franchise fails. Just because most businesses fail doesn’t mean that there aren’t a plethora of business plans that are considered tried and tested and couldn’t be considered new or especially innovative.

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None.

If Joe T-shirt manages to get together the requisite financing, licenses, and whatever to put his own taxicab out on the street, there’s no doubt that he is making an entrepreneurial effort. It’s a new venture in the marketplace, a new point on the economic spectrum, and, while it may be only a tiny point, it’s going to be an important one to Joe. If he fails to make it work, he might be in serious bad shape, so he’s well-exposed to risk. If he succeeds, then he correctly perceived and exploited a rewarding niche in the marketplace. Joe’s an entrepreneur.

Ask some other people who have started or owned businesses. I’ll bet most will agree with me.

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In my opinion:

The terms are very similar, in fact generally overlapping. An entrepreneur is always a founder, but a business owner is not necessarily. Also the term “entrepreneur” is generally associated with an extra degree of risk-taking and creativeness.

In my opinion, Jennifer Lopez is very much an entrepreneur by starting her own perfume business, if that’s in fact what she did. I.e. she played a large part in one or more of the following: chose the fragrance, defined the market, defined market strategies and/or ad campaigns, set up sales channels, set up operations, invested heavily in time, invested heavily in money. My assumption of course is that she didn’t do all of these; I can’t imagine her building or managing a factory for example. But it’s likely she did some.

However, if all she really did was take a phone call of someone saying “Hello J Lo. Chantel calling. Can we make a fragrance with your name on it? We’ll give you a piece of the action”, and she answered yes… Well, that sounds more like a business owner to me. Or perhaps not even that.

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MattBrown wrote

Never minding Jennifer Lopez, I’m not sure I agree with your general assessment. Are you saying that anyone who starts a fragrance business can’t be an entrepreneur on account that the fragrance business doesn’t “have anything new”? I disagree.

Also, I don’t know exactly what Jennifer Lopez is risking in this enterprise, certainly reputation, and likely money. How much risk is required in your book before it crosses the line?

My opinion: As an entrepreneur (and business owner) myself, I don’t find the word entrepreneur cheapened by Jennifer Lopez being one or being labeled one.

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No, I don’t mean to say that. I think you would agree that while fragrance businesses themselves are not new, there could be aspects of a specific business instance that are new and inventive.

I also didn’t mean to imply that Jennifer Lopez being an entrepreneur cheapened the term. I meant that equating “business owner” with “entrepreneur” cheapened the term.

What I believed when I hear the TV announcer was that she was either simply lending her name to a perfume or doing exactly what Liz Taylor and other celebrities had done before and if either of these was the case, I didn’t believe she was an entrepreneur. That would mean that she saw something that had worked before and followed that path. However, if she came at the business from a different angle or had some innovative new idea, then she is definitely an entrepreneur. There is some gray area since, as Ringo pointed out, every business has something new about it, but that simply means that there are degrees of entrepreneurialism. Simply the fact that the business instance itself is new doesn’t IMO make the business owner very much of an entrepreneur.

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Imagine that there is a sliding, 1 dimensional scale with “business owner” on one side and “entrepreneur” on the other. If there are two business owners on the scale, the one closer to the “entrepreneur” side will be “more of an entrepreneur” than the other. A business owner on the furthest edge of the “entrepreneur” side would be considered an entrepreneur by anyone and a business owner on the furthest edge of the “business owner” side would have as little entrepreneurialism as possible. A business owner on the “business owner” side of center, but not all the way to the edge would have some entrepreneurial qualities, but would not IMHO be considered an entrepreneur any more than a politically conservative person who is not the most conservative they could be would be called a liberal.

Where to find the center point is difficult and I’m not trying to do that. There are many questionable cases, but there are also cases where the business owner is definitely on one side or the other.

Ringo seems to believe, as my friend definitely believes, that there is not a line, but simply a point, and all business owners are equally entrepreneurial.

The dictionary seems to support this stance since it defines an entrepreneur as someone who assumes the risk for the business (although the phrase “organizes a business venture” precludes those who don’t participate in the business, like investors), but doesn’t say that it must include any amount of risk.

The Cambridge Dictionary of American English limits the entrepreneur to starting the company or operating alone.

The encyclopedia referenced in the first post further limits the entrepreneur to business innovators and new products, services, or business models.

We all have opinions on what the term means. I have a problem with this, in that the definition of a term should be a factual question, not an opinion. Unfortunately, the authoritative sources seem to vary in the scope of who is considered an entrepreneur.

Does it then boil down to opinion? Do two people with different opinions on the meaning read the same sentence and come up with different ideas? A limitation of the language perhaps? Can we simply pick and choose the authoritative source, like my friend did, and say that is the answer?

I don’t think so. I think that the most limiting definition is the correct one and the others are accurate, but more imprecise definitions. This leads to my sliding scale. The reason I think this is that someone I call an entrepreneur falls under definitions from all of the sources. Saying that all business owners are entrepreneurs seems to imply that the encyclopedia definition can be discarded.