Characteristics of Entrepreneurs and Growth Prospects of Entrepreneurs - Essay Example

The Relationship between Creativity, Innovation and Entrepreneurship Introduction This report is an analysis of two interviews conducted by Michael Dunlop with two young entrepreneurs regarding various issues in entrepreneurship. The respondents in the two interviews are Fredrick Nijm, CEO of Addoway.com, and Chuck Gordon, who is the CEO of SpareFoot.com (see appendix). The analysis revolves around issues identified in the interviews along two themes: characteristics of entrepreneurs and growth prospects of entrepreneurs. These themes are used to illustrate the relationship between creativity, innovation and entrepreneurship. Literature review in relation to the themes One of the key traits of entrepreneurs is that they are willing to take risks, and this attribute is associated with innovation and proactiveness (Zahra, 2005; Hyrsky & Tuunanen, 1999, p. 239; Naldi, Nordqvist, Sjöberg & Wiklund, 2007, p. 33; Vereshchagina & Hopenhayn, 2009). Risk-taking and innovativeness are among the most distinctive personality attributes of entrepreneurs (Hyrsky & Tuunanen, 1999). The propensity to take risks is linked to one’s creativity and innovation, since innovation calls for new ways of looking at issues, a good understanding of the people in a given setting, and an entrepreneurial eagerness to do new things and to work hard (Okpara, 2007). Innovation is in turn linked to creative thinking, which is the art of coming up with solutions to problems through reasoning and imagination (Okpara, 2007). However, it is also important to note that an idea does not become an innovation until it is embraced and adopted to a large extent by people in their daily lives. An entrepreneur must therefore be able to show people that the new idea (which can be a service or product) is useful and worth adopting. Entrepreneurs are risk takers because they do not know how their new service or product will be perceived in the market, but go ahead to turn the risks into opportunities. Based on the ability to take risk, four different roles of entrepreneurs have been identified: risk bearer, innovator, risk bearer and innovator, and arbitrageur (Stough, Kulkarni & Paelinck, 2002, p. 202). A risk bearer uses knowledge (acquired or from past experience) to reduce risk; an innovator uses knowledge to creatively utilise factors of production; the risk bearer and innovator combines the two approaches; while an arbitrageur uses knowledge to identify prospects for arbitrage of risk (Stough et al., 2002, p. 202). Therefore, it can be argued that entrepreneurs use their knowledge creatively to manage the risk that is associated with the new products that they come up with. The driving force behind the growth of entrepreneurial venture is a positive attitude of the entrepreneur (Farahbod et al., 2013, p. 82). For any entrepreneurial venture, there is the possibility of success or failure. Therefore, entrepreneurs need to be prepared for both scenarios. According to Farahbod et al. (2013), a person’s attitude toward entrepreneurship is premised on a number of effective factors – cognitive and emotional factors being the two main elements. Emotional factors are linked to emotions and feelings whereas cognitive factors are concerned with thoughts and ideas. Individuals with emotional confidence exhibit higher tolerance towards stressful environmental factors and thus are more stable when dealing with a problem. Entrepreneurs must have these characteristics in order to face growth challenges in their businesses. Analysis of the interviews A number of characteristics of entrepreneurs are reflected in the two interviews. These include willingness to take risks, having a positive attitude and energy to towards new ideas (innovation), never losing sight of the end goal, ability to implement ideas as soon as they come, and looking for challenges and embracing them. For instance, when asked about what motivated him to become a start-up entrepreneur, Fredrick Nijm replied that “What I was doing wasn’t risky enough for me and I am one to take risks” (Dunlop, 2014a). Similarly, Chuck Gordon’s favourite quote about starting a business is “Entrepreneurship is throwing yourself off a cliff, and building a plane on the way down” as said by LinkedIn’s founder Reid Hoffman (Dunlop, 2014b). This means that entrepreneurs not only need to be creative as to come up with something new (Okpara, 2007), but they must be prepared to deal with the associated challenges. Essentially, entrepreneurs must be able to identify and manage any risks that arise in their environment (Hyrsky & Tuunanen, 1999, p. 239). This emphasises the need for entrepreneurs to play any of the four roles identified in the literature review: risk bearer, innovator, risk bearer and innovator or arbitrageur when dealing with risk. As noted by Chuck Gordon, an entrepreneur has to throw “yourself off a cliff” and build a plane as they go down. This denotes that an entrepreneur will take the risk of creatively coming up with a new product, but they also develop ways to mitigate the risk. In terms of growth prospects of entrepreneurs, a positive attitude is required to drive an innovation and deal with any challenges. This is clear from Fredrick Nijm’s view that “I am a firm believer in positive attitude and energy” (Dunlop, 2014a). In literature, Okpara (2007) argues that creativity is an attitude, the capacity to acknowledge change and innovation and a willingness to juggle possibilities and ideas. This implies that entrepreneurs not only need to come up with new services and products and services but also ensure that the new ideas change with respect to what the market demands. To achieve this, entrepreneurs, as innovators, must break from bureaucratic rigidity and be willing to change their ideas in accordance with new situations since this is the basis of growth of many entrepreneurial ventures (Hyrsky & Tuunanen, 1999, p. 240). The same point is clear in Chuck Gordon’s statement that “you have to try everything, iterate quickly and eventually you will figure out something that actually makes your company some money” (Dunlop, 2014b). This calls for entrepreneurs to have flexible planning systems that allow them to change their strategic plans promptly to capture opportunities that arise and keep up with changes in their environment (Barringer & Bluedorn, 1999, p. 424). Conclusion In summary, the link between creativity, innovation and entrepreneurship is seen through entrepreneurs’ creativity, which leads to innovations that result in new products and services for the market. Entrepreneurs must be creative risk takers, which leads them to innovations that are embraced by others. To achieve this, they must have a drive for growth and willingness to manage risks. They must also have flexible planning systems that allow them to capture new opportunities and adapt to changes in the environment in order for their ventures to grow. References Barringer, B. R., & Bluedorn, A. C. (1999). The relationship between corporate entrepreneurship and strategic management. Strategic Management Journal, 20, 421-444. Dunlop, M. (2014a). Fredrick Nijm interview | Addoway co-founder reveals his entrepreneurial secrets. Retire@21. Retrieved from http://www.retireat21.com/interview/fredrick-nijm-interview# Dunlop, M. (2014b). Chuck Gordon interview, CEO of SpareFoot shares his start-up experience. Retire@21. Retrieved from http://www.retireat21.com/interview/chuck-gordon-interview Farahbod, F., Azadehdel, M., Mofidi, M.K., Shahabi, S., Khoshamooz, H., Pazhouh, L.D., Ghorbaninejad, N., & Shadkam, F. (2013). The relationship between trait emotional intelligence and entrepreneurship attitudes and intentions. Journal of Public Administration and Policy Research, 5(3), 79-85. Hyrsky, K., & Tuunanen, M. (1999). Innovativeness and risk-taking propensity: A cross-cultural study of finish and U.S. entrepreneurs and small business owners. LTA, 9, 238-256. Naldi, L., Nordqvist, M., Sjöberg, K., & Wiklund, J. (2007). Entrepreneurial orientation, risk taking, and performance in family firms. Family Business Review, 20(1), 33-47. Okpara, F.O. (2007). The value of creativity and innovation in entrepreneurship. Journal of Asia Entrepreneurship and Sustainability, 3(2). Stough, R., Kulkarni, R., & Paelinck, J. (2002). 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