Financial History Issue 118 (Summer 2016) - Page 13

EDUCATORS’ PERSPECTIVE In the 16th century, according to economic historians Robert Hebert and Albert Lind, the term “entrepreneur” usually described a government contractor in charge of constructing military fortifications or other public works. Thus, the conquistadors’ contemporaries would not have described them as entrepreneurs. However, as Hebert and Lind note, the emphasis in entrepreneurial studies has shifted over time from risk-bearing to innovation to “perception and adjustment in an equilibrating framework.” The conquistadors, as we shall see, definitely bore risk, innovated and adjusted to changing conditions. Babson College Emeritus Professor of Entrepreneurship William Bygrave has defined the entrepreneur broadly as “someone who perceives an opportunity and creates an organization to pursue it.” According to this definition, the conquistadors qualify as entrepreneurs. The opportunity for wealth, land and a new social standing inspired those who chose to risk the journey to the New World and join an expedition to parts unknown. The creation of organizations to pursue these opportunities soon followed. In Pizarro’s case, he formed the Company of the Levant with his business partner and second-in-command, “the oneeyed” Diego De Almagro, for the express purpose of exploring and conquering Peru. Pizarro, Almagro and Hernando Luque, a local Panamanian financier, provided the majority of the financing for the expedition. Other members of the expedition would receive a share in the potential profits based on their own cont