Archive for May, 2008

Where is the modern day entrepreneur?

What is “entrepreneurship”? I believe the definition is well understood and that most people would be able to identify it when they see it. However, the term seems to have been bandied about quite frequently in recent years.

One problem is with self-classification. People are not good at describing or classifying themselves. Typically, an individual describes himself as he would like to be perceived – not as he actually is perceived. This phenomenon applies to “entrepreneurship” as well. When one proclaims himself as being such-and-such, I tend to let the evidence make the determination. A reporter once asked a great football coach about the poor record of his team, given the immense talent. The coach’s response was, “we are what we are”.

In terms of “entrepreneurship” I have observed a great deal of misclassification. Entrepreneurship implies a creative thinker in terms of business and commerce and one who is a risk taker. In actuality, I have seen very few risk takers among those self anointed as “entrepreneurs”. Today’s entrepreneurs typically take high salaries and assume little risk. When one venture fails, they seem to easily move on to the next high paying entrepreneurial opportunity.

Part of the problem is the environment. The space of innovation and creative thought is surreal. In it, creative thinkers, speculators, idealists, and others mingle easily. Those who enjoy risk and are adrenaline junkies can also find a happy home there. But that does not qualify those individuals as entrepreneurs.

So what is an entrepreneur? That is an article for another time. For now, I’ll just quote a Supreme Court justice, “I know it when I see it”.

Take the guy at the corner pizza shop. He takes out a loan for $40k for a pizza oven, spends another $25k on rehabbing a storefront, and has no choice but to make the business work. He puts a lot on the line, relatively speaking, and is willing to take the risk that he can make great pizza. Now that is my idea of an entrepreneur.

May 9, 2008 at 3:48 pm 1 comment

Taking a vacation from healthcare.

Here I am reading the Sunday newspaper and I am reminded of the alleged high costs of healthcare. This article indicates that even those with insurance are feeling the pinch. Apparently the various additional fees associated with insurance plans – like copayments – can add up to be significant.

I find consumer’s behavior toward health and associated costs, including insurance, to be perplexing. Consumers simply don’t want to pay for health related items. Why does the $2000 a year vacation have higher priority? Why are those $300 a seat tickets to the Red Sox game critical to have? Why do people need to have those hideous, gas guzzling SUVs? Oh, and what about the $4 cup of coffee at Starbucks. It doesn’t make sense. Where are peoples’ priorities?

And there is also a high degree of misunderstanding regarding healthcare costs? Most people don’t understand the difference between health insurance and a health plan. Insurance is protection against a catastrophic event. The implication is that insurance doesn’t cover ordinary items, such as routine checkups. A good analogy is auto insurance. It covers accidents, but not routine items such as oil changes, tires, and brakes. Health coverage implies some thing that is more comprehensive than insurance. HMO plans address health coverage, but most are not without additional costs. A plan with virtually no out-of-pocket expenses would be prohibitive – and likely not a good value to most consumers anyway.

The upshot of all of this is that healthcare is a responsibility of the consumer. It is just like food, shelter, and transportation costs. Until consumers assume a responsibility for their own healthcare and associated costs, the system will appear to be broke. So, for those who would rather think about a vacation rather than their own healthcare, good luck.

May 4, 2008 at 8:41 am Leave a comment


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