Financial History Issue 118 (Summer 2016) - Page 13
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
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