Ron Burt on Entrepreneurial Capital

Ron Burt, Hobard W. Williams Professor of Sociology and Strategy at the University of Chicago's Booth School of Business, writes:

A player brings at least three kinds of capital to the competitive arena....First, the player has financial capital: cash in hand, reserves in the bank, investments coming due, lines of credit. Second, the player has human capital. Your national qualities--charm, health, intelligence, and looks--combined with the skills you have acquired in formal education and job experience give you abilities to excel at certain tasks. Third, the player has social capital: relationships with other players. You have friends, colleagues, and more general contacts through whom you receive opportunities to use your financial and human capital.(Structural Holes; the Social Structure of Competition(Boston, MA: Harvard University Press, 1992, pp. 8-9)

In evaluating your likely success as an entrepreneur, you can do an appraisal of all three. How about your human capital? Do you have the skills you need to do the job? Are you healthy? If you're sick all the time, how are you going to work 10-12 hours a day to get the thing started. Are you charismatic (you don't have to be)? Do you have the passion for it? Do you have the ability to see things through? What financial capital do you have? Do you have assets you can dedicate to the project or access to it through someone else? Thirdly, what about your network. How many people do you know? Are they likely to do you any good? If you're deficient in any of these aspects, what is your plan to remedy them.

This is the supply side of entrepreneurship. You need to assess your capital in each of these areas, then go on to look at what you will need to be fit as an entrepreneur.

What do you think about this? Post a comment.

Entrepreneurship informs all of my professional activities. For entrepreneurial real estate, go to www.yourstopforrealestate.com./blog and for entrepreneurial writing, go to www.kearneymusicschoolmurders.blogspot.com