The History Of Business And The Reason Why Starting Your Own Business Is Never Free - Part 1

Shopify Staff

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Starting a business is an exciting journey. Becoming your own boss allows you to do what you want and grow something according to your own rules.


However, the reality is that starting an online business seems much easier than it can be. There are many barriers that merchants have to deal with. One of the most important things to keep in mind is that starting a business is NEVER free; you need to invest capital and time to generate profits.

In this post, we'll take a brief look at the history of business and really dig into why starting a business is never free. 


What is Entrepreneurship

Although it’s still an ongoing debate, one of the best-known definitions of entrepreneurship is: the process of discovering, exploring and exploiting opportunities to introduce new goods and services, forms of organization, markets, processes and raw materials through efforts of organization that has not previously existed.


The key here is that at the heart of entrepreneurship is the entrepreneur, finding new goods and/or services to present to potential customers.

Beginnings of Entrepreneurship and Trade / Entrepreneurship and the Agricultural Revolution

According to, the first entrepreneurs appeared 20,000 years ago when trade between humans took place in New Guinea around 17,000 BC. It was during this period that humans traded obsidian (a volcanic glass prized for its use in hunting tools) for other necessary goods such as tools, furs, and food.


This type of early entrepreneurial activity continued for thousands of years, as hunter-gatherer tribes around the world traded goods from different parts of their respective regions to improve their tribe's lot.

Entrepreneurship, Money and Expansion of Trade Routes

The first big change in entrepreneurship took place during the Agricultural Revolution, which occurred around 12,000 years ago when humans began to domesticate plants and animals.


This led to towns and cities developing near fertile land. As a result, people were allowed to specialize in their tasks, since it was more efficient to let a smaller number of farmers handle food production, while the rest of the population concentrated on other tasks.


Over time, these specialists became better and better in their unique areas of expertise. The pace of innovation quickened, and towns and cities grew to include thousands of people.


Entrepreneurs were constantly at the forefront of innovation. If a problem needed to be solved, these early entrepreneurs recognized that they could benefit from solving that problem.


Trade, Money and the New World

As cities sprang up around the world after the agricultural revolution, and in the rise and fall of empires like Alexander the Great, the Han Chinese Empire, the Roman Empire, and the Persian Empire, entrepreneurship took a major turn. Entrepreneurs were still specializing in all the areas listed above (ceramics, carpentry, tool making, etc.). But they began to realize that profits could be made through trade between cities and cultures.


This was possible thanks to the invention of money. Because of this, long-distance trade became easier, societies now had a medium of exchange that they could take with them anywhere, and entrepreneurs had something in which they could store value.


Entrepreneurs were also able to buy goods abroad, turn those goods into finished goods, and then sell those goods for profit on a broader scale than ever before.


Columbus’s arrival in what he called the New World in 1492 would permanently change the entrepreneurial spirit. 


During this period, these explorers (also known as entrepreneurs) would raise capital, take risks, and stimulate economic growth (such as the gold and silver rushes in the Viceroyalties of Peru and Río de la Plata).


Another key breakthrough in entrepreneurship during this period was the accounting breakthroughs of Luca Pacioli. Pacioli created standardized principles for keeping track of a company's account and these principles would later be used to become what we know today as accounting and bookkeeping.

The Industrial Age and its Influence on Entrepreneurship

Beginning in the 18th century, the Industrial Revolution influenced deeper changes in the history of entrepreneurship with small-scale production in small towns leading to large-scale production in large cities.


The two things that drove this fundamental change in entrepreneurship; were the availability of energy production and the availability of labor.


With technologies such as electricity, steam, the internal combustion engine, the locomotive, the automobile, and oil; entrepreneurs had the means to build large-scale factories and employ a large amount of cheap labor that was readily available in big cities.

Stay tuned for part two, where we expand on the history of entrepreneurship along with the cost of doing business in today’s market. 

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