Types of entrepreneurship

Reconciling the previous sections, entrepreneurs create value by creating new demand or finding new ways to exploit existing markets. They chal-lenge and change traditional ways of thinking and hence enable innova-tion. Entrepreneurial activities can be carried out in many ways; depend-ing from the entrepreneurs’ personal world view, visions and objectives.

This section aims to provide an overview about the most common types of entrepreneurship and their stance regarding innovation.

Intrapreneur, Owner-Manager and Serial Entrepreneurs

Not every changing idea will lead in starting up a new venture. There is also the possibility that new ideas will be exploited for established, larger enterprises. The idea provider remains in a salaried position, profit and risk of the innovation will be carried by the employer. Such entrepreneurs are called “intrapreneurs”. Intrapreneurs have to be distinguished from a so-called “owner-manager”, a person owning the business they manage.

To be classified as owner-manager the business has to be controlled by the manager which means they have to hold at least 50 % of the business’

share capital. In this group, we can draw on three different categories of entrepreneurs:

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acker-softwar acker-softwar

 Salary-substitute entrepreneurs: are motivated to create a regular income that would be comparable to an employment (e. g. garden-er, tax advisor, beauty therapist);

 Lifestyle entrepreneurs: are centred on the personal lifestyle of the founder and the motivation is to earn a suitable income (e. g. yoga teacher, day care parent, social media consultant). Although it is acknowledged that they may be driven by economic goals, but not necessarily to maximize economic gains (Carsrud & Brännback, 2011);

 Entrepreneurs: are motivated to grow their venture from the start and focus on performance and profit.

Entrepreneurs falling in the last category are entrepreneurs in a true sense of our definition (Storey & Sykes, 1996). Furthermore, there are entrepre-neurs which start enterprises that fall in the middle of these categories.

Their businesses grow until a certain size, bring in some profit but cannot – for various reasons – developed any further. Then often the entrepreneur sells the business and invests the profit in a new venture start. These en-trepreneurs are capitalizing their ability to start-up and hence they are called “serial entrepreneurs”.

Necessity vs. Opportunity Entrepreneurs

Similar to the idea of push versus pull factors for taking up entre-preneurship (Amit & Muller, 1995; Moore & Mueller, 2002; Solymossy, 1997), a research program (GEM, started in 1999 in 10 countries and did survey more than 197,000 individuals by 2013) has yielded two different types of entrepreneurship: necessity and opportunity entrepreneurs. The differentiation rests on the motivations to start a business: Opportunity entrepreneurs start because they did identify a new business opportunity

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acker-softwar acker-softwar

and are motivated by achievement needs (Carsrud & Brännback, 2011).

Necessity entrepreneurs, on the other hand, see setting up their own busi-ness as the only chance to earn a living (Reynolds, Bygrave, Autio, Cox, & Hay, 2002) and are more prone to avoid failure (Carsrud &

Brännback, 2011).

Research has yielded results that opportunity entrepreneurs differ from necessity entrepreneurs in a number of aspects, such as income from en-trepreneurship, duration in self-employment, job satisfaction, regional context, and socioeconomic characteristics; impact on economic growth, attitudes towards risk (Bergmann & Sternberg, 2007; Block & Sandner, 2009; Block & Wagner, 2006; Verheul et al., 2010). As already men-tioned in section 1.2.1, push and pull factors can be simultaneously pre-sent and hence there exists a continuum along which entrepreneurs can be classified (Giacomin, Guyot, Janssen, & Lohest, 2007; Solymossy, 1997).

Therefore, the GEM has introduced a third group of entrepreneurs: so-called mixed-motivated entrepreneurs. For the purpose of the dissertation, all three categories will be applied.

Social entrepreneurs, Sustainable entrepreneurship

Not all entrepreneurs are being led by the motivation of personal wealth and fame, as we have seen in the previous sections. In some cases, the purpose is rather to create and develop something meaningful. These entrepreneurs often start ventures that operate in a commercial, profit-oriented way to achieve social objectives. Such enterprises are called social enterprises, they operate at the intersection of private, profit-oriented enterprises and public services. Many of the commercial entre-preneurs’ characteristics also refer to social entrepreneurs, what makes them special is the purpose of serving their social mission (Burns, 2016,

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acker-softwar acker-softwar

p. 19) and their primary motivation in social gains (Carsrud & Bränn-back, 2011).

Sustainable entrepreneurship is distinguished by a commercial, profit-driven strategy but additionally focussed on a social mission, the society and the environment. Although business interests have top priority, the management in their decision making every time take into account the influence on the environment and all of its stakeholders. Sustainable en-trepreneurship aims to tackle issues such as sustainability, social respon-sibility, ethics and good corporate governance by taking the right com-mercial decisions and actions. The social interests and sustainable behaviour of the entrepreneurs interviewed for the present research study are manifold and some aspects are taken into account in the later analysis of the interviews.

To summarize, there is not “one kind of entrepreneur” who starts and grows enterprises to sizes that are meaningful for entrepreneurial leader-ship. As Drucker (1985) states, it is the medium-sized business that has the best capability for success and innovation. Hence, to understand when and how entrepreneurs will learn from their failure experience is crucial for the further comprehension of the entrepreneurial process.