Entrepreneurship means to undertake, to solve a problem or complicated situation. It is a term used in the business sector and is often related to the creation of new companies or products .
Undertaking is also knowing how to identify opportunities and turn them into a profitable business. When an entrepreneur perceives a consumer need, he is able to create a way to solve the problem, offering a product or service that gives a better customer experience (adds value). This solution can be turned into a business.
The concept of entrepreneurship was initially used by the Austrian economist Joseph Alois Schumpeter (1883-1945). In 1942 he published The Theory of Creative Destruction in the book Capitalism, Socialism and Democracy . The theory explains entrepreneurship (creation of innovative products, services or companies) as a response to a consumer need perceived by the entrepreneur.
How important is entrepreneurship?
Entrepreneurship is essential in societies, because it is through it that companies seek innovation, transforming knowledge and ideas into new products that will be placed on the market.
The creation of enterprises contributes to the country’s economy because it generates wealth, increases economic circulation and creates more job opportunities.
It can also influence the improvement of the quality of products or services that are offered to consumers, through increased competition between companies that offer similar services.
Entrepreneurship also gained a new social mission: to help preserve the environment. This can happen both by raising consumer awareness about sustainable consumption, and creating ecological products, aimed at preserving natural resources.
What are the 6 main types of entrepreneurship?
1. Corporate entrepreneurship
Corporate entrepreneurship (or intrapreneurship) happens when an employee undertakes within the company he works for. Even without being the owner, the employee has the characteristics of an entrepreneur and manages to apply this vision in the company.
Employees can use their entrepreneurial vision to help the business grow, coming up with creative ideas or solutions that help improve a company’s product or process.
Critical sense, creativity, innovative vision, good communication, dedication and leadership are some qualities of a corporate entrepreneur.
Some advantages of corporate entrepreneurship can be:
- gain in agility and productivity in the company;
- improved internal communication among employees;
- correction of failures in the company’s processes;
- reduction of maintenance costs and bureaucracy.
In addition to helping the company grow, the enterprising employee can also value their own career, their entrepreneurial actions can be recognized by their superiors.
2. Small business entrepreneurship
It is the entrepreneurship of small companies (family, individual or with few employees). It is common for them to be local businesses that sell common goods or services.
Business expansion is not the main focus of this type of enterprise. Its main objectives are loyalty and the creation of a close relationship with regular customers, to guarantee its place in the market.
These companies meet the simple and daily needs of local businesses and actively participate in the circulation of the economy in the region.
They can work in the form of small businesses (such as bakeries, grocery stores and hairdressing salons) or companies that offer individual services (such as sewing, woodworking or cleaning).
The most common types of small business companies are:
- small business (EPP);
- microenterprise (ME);
- individual microentrepreneur (MEI).
3. Startup Entrepreneurship
Startup entrepreneurship is the type of venture that creates a new type of business. Usually, the idea of this type of company is born when the entrepreneur realizes that there is a need that is not met in the market.
To meet this demand, the entrepreneur creates a business model with innovative characteristics, he creates different solutions from those that already exist in the market.
Startups can work in any area of selling services or products, and are characterized by innovation and creativity in the creation of their products.
Technological innovation is a great ally of projects of this type and can help startups to win customers, offering services that fit their customers’ needs.
Some examples of startup ventures are:
- Uber : ride-sharing app;
- Airbnb : home and room rental platform;
- 99 Taxi : application that connects users and taxi drivers;
- Ifood : food delivery app.
4. Social entrepreneurship
Social entrepreneurship is aimed at making a positive impact on society. This type of enterprise offers solutions to improve society, leaving the objective of profit in the background.
The entrepreneur who decides to work in this area has social responsibility as the basis of the business, it is from the will to help society that motivation to undertake is born. It can work in various sectors, such as environmental protection, education, social services or cultural activities.
Despite not being the main focus of the enterprise, the concern with profit does not cease to exist, because it is important for the maintenance of the business.
An example is non-profit organizations (NGOs), which help, defend rights or make citizens aware of an important social cause.
Examples of social entrepreneurship are:
- Associação Curso Vencedor : company created by students from the Instituto Tecnológico da Aeronáutica (ITA) that offers pre-university courses for needy students;
- Saúde Criança : entity that assists children in vulnerable situations, with medical and educational support;
- Ecodom : company that builds affordable houses from recycled plastic and cardboard.
5. Digital Entrepreneurship
Digital entrepreneurship takes advantage of the facilities of technology to offer products or services, it is the application of digital technology to facilitate business activities.
These companies are already “born on the internet”, businesses are kept online, and many of their processes (such as negotiation and sales) happen digitally.
As with other ventures, to start in digital entrepreneurship it is important to choose a market niche (area of activity of the company) and decide which products or services will be offered to customers.
The choice is important to define the target audience and ensure more chances of becoming an authority in the chosen area.
It is also necessary to plan sales actions, choose the best digital platform for the business, invest in digital marketing strategies and social media dissemination, to reach customers and engage followers.
Some advantages of digital entrepreneurship are:
- low initial investment;
- possibility of faster financial return;
- the physical structure of the company can be reduced;
- more visibility of the business and easier to get customers;
- possibility of remote work;
- reduced maintenance costs.
Examples of companies that have followed the digital entrepreneurship model are:
- Amazon : e-commerce site, which offers a variety of products;
- Coursera : company that offers online courses and training;
- Netflix : movie and series exhibition platform;
- Ebay : virtual shopping and auction site;
- Youtube : Video sharing platform.
6. Sustainable entrepreneurship
In sustainable (or green) entrepreneurship, companies are concerned with sustainability and environmental protection.
Sustainable companies offer services or products aimed at protecting the environment, and can also act to raise awareness of the importance of adopting sustainable measures. Green and more durable products are among the most popular in sustainable entrepreneurship.
Enterprises of this type apply sustainable measures on a day-to-day basis, such as:
- conscious and economical use of water and electricity;
- reduction in the use of plastic materials;
- separation of organic waste and recyclable waste;
- reuse of packaging and paper;
- use or donation of leftover raw material to avoid waste;
- awareness of employees and consumers about the importance of sustainability measures.
Examples of sustainable entrepreneurship are :
- Boomera : company that recycles difficult products (such as disposable diapers) in partnership with garbage collectors’ cooperatives;
- Loop : application that connects users to share bicycles;
- Revoada : fashion company that creates products from leftover umbrella fabrics and tire tubes.
Difference between necessity and opportunity entrepreneurship
These two types of entrepreneurship represent the reason that leads a person to undertake.
In entrepreneurship by necessity, the idea of a new business is born from the lack of other opportunities.
It happens, for example, when a person is unemployed and chooses to create a business to have a source of income that can guarantee their livelihood.
In opportunity entrepreneurship, the entrepreneur creates a business because he perceives a need in the market. He sees in this need the chance to create his own enterprise.
For example, an entrepreneur realizes that a food delivery service fails and creates a system that guarantees coverage of the entire delivery area of a region.
What is it to be an entrepreneur?
Entrepreneurs are the people who make entrepreneurship happen, when they perceive a business opportunity and have good ideas to create a company and offer a product or service of interest to the consumer.
They are known for being people who can detect opportunities, have a good vision of the future and have the courage to test different ideas.
10 important characteristics of an entrepreneur
- leadership skills and good relationship with your team;
- quick thinking and ability to make decisions;
- have a long-term vision and not wait for immediate results;
- create innovative ideas;
- knowing how to combine creativity (new ideas) and practicality (realizing ideas);
- build good professional relationships, know how to network ;
- ability to motivate, for oneself and for the team;
- ability to make plans;
- always seek to improve the quality of your product or service;
- be flexible to adapt your plans to reality.
How does innovation help entrepreneurship?
Entrepreneurship is linked to innovation, the ability to use creativity to create new solutions. But, innovating is not necessarily creating a product or service. Innovating can be finding a different or creative way of offering the company’s services to gain the attention of consumers.
This characteristic can be decisive for an enterprise to stand out in a competitive market, by offering more attractive solutions than the competition.
Innovation requires the entrepreneur’s ability to understand the needs of the market and customers, and plan to offer their services in a way that meets the interests of their target audience, while standing out in the market.
Innovation can be efficient for:
- create products or services;
- have more efficient production methods;
- win new customers;
- create simplified forms of organization;
- generate more publicity;
- improve customer service.