I recently had the opportunity to participate in a brainstorming session on entrepreneurship at Arizona State University (ASU). The meeting was led by a University Innovation Fellow focused on entrepreneurship. One of the first questions she posed to the group was “What is entrepreneurship?” With a room full of academics, experts in entrepreneurship in various fields of discipline, student entrepreneurs and others with an interest in facilitating entrepreneurship, this was a perfect opportunity to listen to others share their thoughts on a deceptively challenging question.
After reflecting on these reference points, I’ve returned to the definition of the purpose of a business that I developed in the early days of CRM and relationship marketing. The chart below represents this virtuous circle of value creation and borrows from innovators like Michael Porter (Harvard’s strategy guru) and Peter Drucker (once Claremont’s, and the world’s, management guru and “social ecologist”). I believed, and still do, that building a strong brand, in partnership with one’s customers, is the foundation for creating customer value, in turn the key to a sustainable business. This seems almost universally accepted today, as ever more strategist are aligning with the notion that customers control the brand, define competitive advantage and their terms for the brand value exchange – i.e. how much they’ll spend to buy a brand, product or service.
The Purpose of A Business
How does this relate to entrepreneurship? I think entrepreneurship, defined, and the purpose of a business are pretty much one and the same. If there is a slight difference, it is that entrepreneurs create something “really” new. Of course, as soon as they’ve done so, they have the same challenge every business does – sustaining their competitive advantage to retain their ability to create customer value. The gap between their innovation and a competitor copying them is smaller and smaller every day. In many cases competitive advantage lasts only a few months or less, making the entrepreneur’s job of sustaining the business more challenging all the time.
