Although entrepreneurship is by no means new, having been conceptualised in the 18th century by the French-Irish economist Richard Cantillon, it is true that some variants have developed recently.
One example of this is digital entrepreneurship, which generally requires creativity, adaptability, digital skills and a strategy to stand out in an extremely competitive environment.
Digital entrepreneurship: definition
Digital entrepreneurship can be defined as the creation and subsequent management of businesses whose base of operations, product sales or services are founded on the use of the Internet and digital technologies.
One of the main characteristics of this type of entrepreneurship is the ability to reach customers anywhere in the world, without being limited to a specific location, as well as the lack of need for a physical space.
Connectivity is one of the cornerstones of this type of entrepreneurship, enabling it to take advantage of technological tools by offering innovative solutions or adapting to market changes.
Main characteristics of digital entrepreneurship
Although we have already touched on some of the main characteristics of digital entrepreneurship in the previous section, let’s take a closer look at what they are.
On the one hand, we are looking at a model that usually requires a lower initial investment than traditional businesses, partly due to some of the characteristics we have already mentioned, such as not needing commercial premises and being able to operate from anywhere.
The use of social media for entrepreneurship, digital platforms, the development of apps and the availability of emerging technologies are other key features of digital entrepreneurship.
These features also enable capabilities that distinguish this type of entrepreneurship from others: the possibility of reaching a global target audience.
Likewise, due to the very nature of the businesses undertaken, the search for constant innovation or adaptation to new trends are other characteristics of digital entrepreneurship.
Digital entrepreneurship models
Due to the characteristics we have already mentioned, some of the business models that have emerged from this type of entrepreneurship are as follows:
- Content creation. Inherently linked to the digital world, content creation—such as blogs, video platforms, podcasts, or social media—can lead to a business through the monetisation of advertising or sponsorship.
- E-commerce. While the previous case was purely digital, here we can find e-commerce involving digital assets, but also e-commerce involving physical assets, which requires logistics that go beyond the digital realm.
- Marketplace and dropshipping. Although they could be considered e-commerce, marketplace and dropshipping are two modalities that have particular characteristics with respect to online commerce. The former is a space for customers and sellers to carry out transactions, while the latter seeks to sell products that are not in stock, with the seller transferring orders to the supplier.
- Affiliate marketing. Without the need for any assets, affiliate marketing involves promoting third-party products in exchange for commissions based on the sales generated.
- Application or platform development. Some of the most paradigmatic examples of successful digital entrepreneurship can be found in this category, with transport applications or platforms that are successful without owning any vehicles, or accommodation platforms that operate without having any rooms available.
- Online courses. Related to digital education, digital entrepreneurship can also involve various issues such as training platforms, virtual classes or the sale of educational content.
Challenges of digital entrepreneurship
Although we have already seen some of the advantages of digital entrepreneurship (such as lower costs, global reach and adaptability), this type of entrepreneurship is not without its challenges.
For example, despite the benefit of global reach, if the website is not effective or social media management is inadequate, it will be difficult to make an impact on people, no matter how large the pool of potential customers.
Along the same lines, creating unique and distinctive content will also help increase brand or business awareness, which will lead to greater chances of achieving objectives.
These issues must also be linked to having previously identified where the target audience is located.
This phase of identifying potential customers can also be accompanied by studying the competition and building networks of contacts, issues that in this case are not unique to the digital sphere.
To all this, we could add that the ability to be creative or innovative can always help you stand out from the competition.
