How to Become An Internet Entrepreneur

Starting a business is often equated with entrepreneurship. So, what is entrepreneurship?

Several theories of entrepreneurship exist which help us define what entrepreneurship is. Joseph Alois Schumpeter, an Austrian economist, is well known for his pioneering work on entrepreneurship. In his work “The Theory of Economic Development”, he states that entrepreneurship causes economic growth as it allows society’s means of production to be used in newer and more efficient ways and combinations. Other researchers have confirmed that countries that have a higher level of entrepreneurship also have higher levels of innovation and technological change. Research by Daniel Smith entitled “The Role of Entrepreneurship in Economic Growth” also confirms that entrepreneurship has a significant impact on economic growth.

What is Entrepreneurship?

Schumpeter defined entrepreneurship in terms of innovation resulting in new means of production, new products, and new forms of organisation. These innovations cause creative destruction by making old inventories, ideas, technologies, skills, and equipment to become obsolete. He was of the view that this creative destruction causes continuous progress and improves the standards of living for everyone. Another important study which followed this view is the work of Professor Israel Kirzner. He was of the view that alertness to opportunity is the fundamental quality of the entrepreneur. Alertness is defined as the entrepreneur’s ability to perceive new economic opportunities and this alertness must necessarily precede actions taken to exploit the opportunities.

Entrepreneurs Pursue Opportunities

Another definition describes what entrepreneurs do is the definition by Professor Howard Stevenson, the Sarofim-Rock Baker Foundation Professor Emeritus at Harvard University. He states that “Entrepreneurship is the process by which individuals pursue opportunities without regard to the resources they currently control”. The three keywords in the definition are “pursuit”, “opportunity” and “without regard to resources controlled”. In the Harvard Business Review (2003) Tom Eisenman, Howard H. Stevenson Professor of Business Administration at the Harvard Business School describes these keywords as below.

Pursuit

This refers to single-minded and and relentless focus the entrepreneurs display. As it is generally by conventional wisdom that opportunities do not wait for anyone, entrepreneurs perceive that opportunities would be available for a short time. With the limited resources, they have to work with urgency to make tangible progress in order to attract resources. This is not the case in an established companies where resources are already available and opportunities are grouped into portfolios.

Opportunity

This refers to something novel that is going to offer something that creates one or more of the following values:

• Creation of a truly innovative product.
• Developing a new business model.
• Improving an existing product or service by making it cheaper or better.
• Creating new customers for existing products.

Without regard to resources controlled

This refers to constraints on resources. Most entrepreneurs have limited resources and have to bootstrap and have to invest their personal resources in the start-up until it gets to the stage where it is operational and it begins to generate revenue. In some cases, the founders will have to look for resources beyond their control.

Entrepreneurship and Risks

Many definitions of entrepreneurship have traditionally linked it with risk – taking. In reality, entrepreneurs come in many forms and they are not people that just go out looking for risks. People rarely tend to go out looking for risks, unless they’re adrenaline junkies. According to Professor Eisenmann, the risks associated with entrepreneurship is a result of pursuing novel opportunities without adequate resources. These risks can be divided into four types:

• Demand risk which is the risk that there may not be potential customers for the product or service.
• Technology risk which is related to situations where engineering or scientific breakthrough is required to establish the product or service.
• Execution risk which is the ability to attract staff and partners with the adequate skills to execute the venture.
• Financing risk which is the ability to acquire sufficient finance to execute the venture.

From the above it can be seen that there are certain factors that have stood out that commonly describes what entrepreneurs do. According to Dr Julie Holland, Director, Glendonbrook Centre for Enterprise Education Louborough University, these are “alertness”, “opportunity”, “creative skills” and “action”. This can be illustrated as below:

We can see from the above that entrepreneurs are very good at recognizing opportunities. This does not happen automatically, they listen, follow and study what is going on in the industry that is of interest to them. This is their passion. They also take action, as the saying goes “no risk, no gain”. The other thing is that they have creative skills that enable them to be successful.

Internet Entrepreneurship

As it can be seen above, entrepreneurship is about spotting opportunity, and taking action that will bring about change. That change may be be gradual or disruptive.

The impact of e-commerce, which affiliate marketing is part of, is disruptive! Disruption occurs when old ways of doing things are made obsolete by new ones. I was walking down my local shopping center the other day and I realized that many of the big shops, especially the retail ones have shut down. Then I found out that online shopping is affecting them. As old ways of doing business are rendered obsolete, new opportunities emerge through the new ways of doing things and what entrepreneurs do is spot and take advantage of these opportunities.

You can call it online entrepreneur, Internet Entrepreneur or cyber entrepreneur. The main difference between traditional and Internet entrepreneurship is that the later involves doing business mainly through online platforms, typically websites. In addition, the Internet has facilitated the process of entrepreneurship and make more accessible and less expensive than in a brick-and-mortar business.

How to Become An Internet Entrepreneur – Lessons Learned from Unsuccessful Online Venture

I was just doing a search to find out what the experts suggest is the best way to start an online business. I did not find anything new! However, what I found here is a fascinating and honest post by  Tung Tran about the reasons he learned from failing  as an Internet Entrepreneur. As they always say “Experience is the best teacher”. Let’s take a look at the points he raised and use this as reverse engineering.

• Taking Action – Research has shown that taking action is one of the main traits of an entrepreneur. If you have an idea and don’t take action, nothing changes; it remains an idea in the head. According to Les Brown “The graveyard is the richest place on earth, because it is here that you will find all the hopes and dreams that were never fulfilled, the books that were never written, the songs that were never sung, the inventions that were never shared, the cures that were never discovered, all because someone was too afraid to take that first step, keep with the problem, or determined to carry our their dream.”
• Getting a Coach or Mentor – A coach or mentor is a change agent. A coach or mentor will help you to get results and avoid wasting time and money. Even talking to someone can help you figure out what decision to take even when the person does not have to say anything. All you need is a listening ear!
• Join a Mastermind Group – I knew about Mastermind group while reading Think and Grow Rich by Napoleon Hill many years ago but it did not make any sense then until few years ago. A mastermind group is will help you to navigate through challenges using the collective intelligence of others.
• Apply the 80/20 Rule – This is the Pareto principle which was applied to management by Joseph M. Juran, which has now become a generally accepted way of doing things. It is based on the view that 80% of the results we get comes from 20% of efforts. Consequently, we have to identify things that generate the desired results and focus on them.
• Focus on One Line of Business – This is a critical point because it has happened to me. Trying to do so many things at one time may mean that you end up doing nothing, because you become “Jack of all trade but master of none”, as the saying goes! So, focusing on one thing is crucial to success.
• Discover Your Passion – What are you passionate about? If you do what you love, this comes naturally and it is likely that you will succeed in it you will be totally committed to it. You will not lack motivation and bored.
• Be productive and don’t be deceived by the hype – There is belief that online business is very easy because of the false impressions spread by the so called gurus that you do not have to do much work. All you need to do is about few hours a week and cruise round the world while your money is falling from the skies like the biblical Manna from Heaven. Every undertaking needs hard work!
  
• Other points – Learn financial management in order to be able to manage your finances well, start a blog (after all, it is a online business), build an email list (because they are your potential customers) and be adaptable(because technology changes fast).
  

References:

Eisenmann, T (2013). Entrepreneurship: A Working Definition. [online] Website name. Available at:  https://hbr.org/2013/01/what-is-entrepreneurship[Accessed 05 Jan. 2018].

Holland, J. (2015) Innovation and Enterprise.

Schumpeter, J. A. (1934).The Theory of Economic Development: An Inquiry Into Profits, Capital, Credit, Interest, and the Business Cycle. Transaction Publishers. Google Books

Smith, Daniel (2010) “The Role of Entrepreneurship in Economic Growth,” Undergraduate Economic Review: Vol. 6: Iss.1, Article 7. Available at: http://digitalcommons.iwu.edu/uer/vol6/iss1/7

Tran, T (2016). 11 Lessons Learned from 2.5 Years of Being an Unsuccessful Internet Entrepreneur. [online] Available at: [https://www.cloudliving.com/unsuccessful-internet-entrepreneur/ [Accessed 07 Jan. 2017].