QuickMBA differentiates an entrepreneur from other small business ventures by 4 qualities:
- Large generation of wealth
- Rapid generation of wealth
- High risk
- Innovation
As I am quite interested in the world of tech startups and internet ventures, one business that fits the above characteristics sticks out in my mind – Chicago-based group-buying daily deals site, Groupon.
It’s no secret that since the startup began in 2008, Groupon has become wildly successful, spawning clones left right and center in the US and China (in the hundreds!). As the article mentions, Groupon raised $1 billion in valuation in half the time that Twitter took, and half a year faster than Facebook. Estimates have put Groupon’s pure profit at $1 million a week, a huge amount for a relatively new business with minimal overhead costs – they sell no tangible products, only virtual vouchers. Hence, Groupon clearly fits the first two definitions of an entrepreneurial business.
In terms of high risk and innovation, when these two characteristics are applied to Groupon, they kind of go hand in hand. Groupon began the collective buying craze with an unprecedented model, and with any new online/tech startup, there is risk of failure (and social media mockery). Groupon also breaks one of the fundamental startup rules – basing your success purely on that of others. Nonetheless, it seems to be working… for Groupon itself. There is debate about the effect Groupon has on some of its small business partners – but that’s a topic for another post.
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