I’m so happy he wanted to dig deeper, it would be great if I could teach him the basics of business! So off we go to the first class, i.e. the simplest definition that can describe a business in a child’s words :)
A business is a group of people (translation of “human institution”) who work together to produce something that some other people need and will want to buy.
When I think in retrospect, I realise the perspective I had on this at his age was that companies produce things which then customers buy. It was clearly a push market perspective, quite consistent with how it used to be in the Seventies.
What I observe is that this perspective is often perpetrated in our time and leads aspiring entrepreneurs to work hard on product development, with the assumptions that customers will buy the product as soon as it becomes available. Wishful thinking syndrome.
On the other side I also thought that a company was something different from “people.” The customers were people, people also worked for companies as employees, but the company itself remained some sort of black-box machine churning out products. At that age I didn’t understand that it is normal people who create companies and startup businesses.
This is a very empowering understanding, the one that makes it possible to dream of building something yourself. The earliest you understand it the better.
I think that this understanding is the competitive advantage of children in entrepreneurial families when it comes to taking the lead of their professional lives. It opens up a wealth of possibilities only barely visible to non-entrepreneurial families offsprings.
With the definition of business I built for my son I wish I set the basis for a better understanding of entrepreneurship.
A business is a group of people…
YOU can be an entrepreneur
who work together to produce something…
it’s a group effort
that some other people need…
be alert to customers needs even before you start up
and will want to buy…
be aware of your customer context (not always a need leads to the decision to buy)
Let him elaborate on this and let’s see what the next question will be.