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Entrepreneurship Module

Managing EntrEprEnEurial VEnturEs

Russell Simmons is an entrepreneur. He co-founded Def Jam Records because the emerging
group of New York hip-hop artists needed a record company, and the big record companies
refused to take a chance on unknown artists. Def Jam was just one piece of Simmons’s cor-
poration, Rush Communications, which also included a management company; a clothing
company called Phat Farm; a movie production house; television shows; a magazine; and an
advertising agency. In 1999, Simmons sold his stake in Def Jam to Universal Music Group,
and in 2004, he sold Phat Farm. Today, Simmons is involved in UniRush, a Cincinnati com-
pany that sells a prepaid Visa debit card, and Russell Simmons ArgyleCulture, a clothing line.
He also launched an advertising venture described as a digital solutions company, set up to
work for ad agencies, not to be one. And in his latest announced venture, Simmons is bringing
rap to Broadway. His show “The Scenario” is a musical featuring songs from more than 30
years of rap hits. USA Today named Simmons one of the top 25 Influential People, while Inc.
magazine named him one of America’s 25 Most Fascinating Entrepreneurs.
In this appendix, we’re going to look at the activities engaged in by entrepreneurs like
Russell Simmons. We’ll start by looking at the context of entrepreneurship and then examin-
ing entrepreneurship from the perspective of the four managerial functions: planning, organiz-
ing, leading, and controlling.

What Is Entrepreneurship?

Entrepreneurship is the process of starting new businesses, generally in response to opportu-
nities. For instance, Fred Carl, founder of the Viking Range Corporation, saw an opportunity
to create an appliance that combined the best features of commercial and residential ranges.
Many people think that entrepreneurial ventures and small businesses are the same, but
they’re not. Entrepreneurs create entrepreneurial ventures—organizations that pursue oppor-
tunities, are characterized by innovative practices, and have growth and profitability as their
main goals. On the other hand, a small business is an independent business having fewer than
500 employees that doesn’t necessarily engage in any new or innovative practices and that
has relatively little impact on its industry. A small business isn’t necessarily entrepreneurial
because it’s small. To be entrepreneurial means that the business is innovative and seeking out
new opportunities. Even though entrepreneurial ventures may start small, they pursue growth.
Some new small firms may grow, but many remain small businesses, by choice or by default.

Who’s Starting Entrepreneurial Ventures? entrepreneurship
The process of starting new businesses, generally
in response to opportunities
Call them accidental entrepreneurs, unintended entrepreneurs, or forced entrepreneurs: As the entrepreneurial ventures
unemployment rate hovers around double digits, many corporate “refugees” are becoming Organizations that pursue opportunities, are
characterized by innovative practices, and have
entrepreneurs. These individuals are looking to entrepreneurship, not because they sense some growth and profitability as their main goals
great opportunity, but because there are no jobs. The Index of Entrepreneurial Activity by the
Kauffman Foundation showed the rate at which new businesses formed in 2010 remained small business
An independent business having fewer than
high, representing the “highest level of entrepreneurship over the past decade and a half.” The 500 employees that doesn’t necessarily engage
report found that “the patterns provided some early evidence that ‘necessity’ entrepreneurship in any new or innovative practices and that has
is increasing and ‘opportunity’ entrepreneurship is decreasing.” But “accidental or by design,” relatively little impact on its industry
entrepreneurship is on the rise again.
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