There's a fundamental difference between an innovator and an inventor, writes digital entrepreneur Tom Grasty in a great column over at MediaShift Idea Lab.

Invention is the "creation of a product or introduction of a process for the first time." Thomas Edison was an inventor.

Innovation happens when someone "improves on or makes a significant contribution" to something that has already been invented. Steve Jobs was an innovator.

Okay, so they're different. What's that mean for entrepreneurs? 

You can't just focus on innovation and you can't just focus on invention. That's not what an entrepreneur does. The entrepreneur recognizes the potential early on, then turns it into something big.

Grasty explains it with an analogy:

"If invention is a pebble tossed in the pond, innovation is the rippling effect that pebble causes. Someone has to toss the pebble. That's the inventor. Someone has to recognize the ripple will eventually become a wave. That's the entrepreneur.

"Entrepreneurs don't stop at the water's edge. They watch the ripples and spot the next big wave before it happens. And it's the act of anticipating and riding that "next big wave" that drives the innovative nature in every entrepreneur."

NOW SEE: 11 Groundbreaking Inventions Of 2011 >

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