ENTREPRENEURSHIP

The Spectrum of Entrepreneurship

What kind of entrepreneur are you? What kind do you want to be?

Where are you? Where do you want to go?

Continuing with the theme of introspection and following on the heels of my last two posts (Know Thyself! and What Do You Value?), the final thing to think about is direction. Now that you know who you are and what you value, it’s time to think about where you want to go. For some lucky people, where you are and where you want to be are the same. For the rest of us, though, it’s worth mapping out our journey.

One way to do that is to think about entrepreneurship as a spectrum, then see where you are on that spectrum and where you’d like to be. As an entrepreneur, you should always be striving for specificity. If you know whether you’re a Small and Medium Enterprise (SME) or an Innovation-Driven Enterprise (IDE) — see my previous posts if you’re not sure what these are — you can get more specific by thinking about where you are in relation to the following kinds of entrepreneurship. If you don’t know yet, you can see where you land on this spectrum and work backward from there to see which kind of entrepreneur you are (SME or IDE) more broadly.

Note: You might not fall neatly into one of these categories — it’s okay to be on the cusp. For example, many gigsters are also indies.

Gigster

You take a portfolio approach to making money by freelancing, doing side hustles, or participating in the gig economy in some way. You might be doing these activities in addition to a full or part-time job.

Pros: High personal freedom and flexibility (you can choose what work you do and when, from where, etc.), low obligation, low overhead

Cons: Low economic freedom, income instability, low earnings relative to other activities, lots of time spent chasing work, still trading time for money like you would be in an employment situation, difficult to make strategic moves due to lack of time, energy, and no access to capital, little to no control over growth due to a lack of surplus resources

Indie

You are an independent app or game developer, writer, photographer, videographer, craftsperson, etc. In other words, you produce something — often art or craft-related — and want to sell it as a product to support more work. You aren’t yet treating it as a business, though. If most of these are true for you, you are likely an indie:

• You use whatever materials and tools you have on hand
• You haven’t formed a business entity of any kind
• You have made no or minimal investment in a brand or marketing strategy
• You don’t keep track of your time or money invested in these activities
• You don’t pay much attention to legal or financial matters, aren’t keeping your books, etc.
• You do all related work yourself, from wherever you happen to be at the moment
• You are not seeking any financing and are paying for any expenses out-of-pocket
• You are doing these activities in addition to a full or part-time job

Pros: High personal freedom and flexibility (you can choose what work you do and when, from where, etc.), fairly low obligation and overhead, high risk can sometimes pay off with higher than expected return, no longer trading time for money as you would be in an employment situation

Cons: Low economic freedom, income instability, low earnings relative to other activities, high risk — lots of time spent creating without any idea whether or not you’ll be able to sell, etc., difficult to make strategic moves due to lack of time, energy, and little to no access to capital, little to no control over growth due to a lack of surplus resources, the impact of investing in your activities is difficult to determine

Solopreneur

Like gigsters and indies, you provide goods, services, or both, but you are approaching these activities as a business and think of yourself as a sole proprietor. If most of these are true for you, you are likely a solopreneur:

• If you make products, you are investing in specialized materials or equipment
• You have formed a business entity with its credit history
• You have a brand, a website, and a social media presence
• You’re tracking your finances (bookkeeping, etc.) and structure your time
• You use professional services like an attorney or an accountant
• You hire freelancers to delegate work
• You work on your own, out of your home or similar environment (no employees, no office or production facility)
• You might seek financing in the form of grants, small business loans, or lines of credit
• Your business is self-sustaining and is your full-time job

Pros: Less personal freedom and flexibility than gigsters and indies, but more than entrepreneurs, higher economic freedom relative to gigsters and indies, higher obligation and overhead, high risk can sometimes pay off with higher than expected return for product-based businesses, more stable income, higher earnings relative to gigsters and indies, no longer trading time for money, more control over growth due to surplus resources, investing in your business has an immediately noticeable impact, easier to make strategic changes due to more time, energy, and better access to capital than gigsters and indies

Cons: Lower economic freedom relative to entrepreneurs, moderate risk — lots of time spent creating without a high degree of clarity on whether or not you’ll be able to sell, etc., built-in growth ceiling — growing beyond a certain point won’t be possible as a solopreneur

Entrepreneur

Much like a solopreneur, you provide goods, services, or both, and you are approaching these activities as a business. However, you have partners (other founders) and advisors, and either have employees now or hope to in the future. If most of these are true for you, you are likely an entrepreneur:

• If you make products, you are investing in specialized materials or equipment
• You have formed a business entity with its credit history
• You have a brand, a website, and a social media presence
• You’re tracking your finances (bookkeeping, etc.) and structure your time
• You use professional services like an attorney or an accountant
• You might hire freelancers to delegate work but also have employees, or want to hire full-time employees someday
• You work with other founders/partners out of an office, shop, or production facility
• You have advisors
• You might seek financing in the form of grants, small business loans, or lines of credit, but are also open to — and able to receive! — outside investment
• Your business is self-sustaining and is your full-time job; it also employs others

Pros: Highest economic freedom, risk can be mitigated and sometimes still pay off with higher than expected returns for product-based businesses, more stable income, highest potential earnings, no trading time for money, more control of growth due to surplus resources, easier to make strategic changes due to more time, energy, and best access to capital

Cons: Lowest personal freedom and flexibility, highest obligation and overhead, investing in your business can take more time to notice, more people involved means making decisions and executing on them can take much longer

Conclusion

If we take a step back from these somewhat arbitrary categories, we can see that the major high-level difference between them is each type’s individual personal vs. economic freedom. By personal freedom, I mean that you can work on your terms, when, where, how, and for whom you want. This is true to a degree for all types of entrepreneurs but not (for example) true for full-time employees. By economic freedom, I mean having the income you need to provide the quality of life you’re looking for in your personal life and the revenue or access to capital needed to take on more ambitious goals related to growth. A rough back-of-the-napkin sketch of what we see emerging here might look something like this:

Economic vs. personal freedom, hypothetically

This is a helpful way to look at it. If you want a high degree of personal freedom, are happy with your quality of life, and don’t want to build or grow a business, then being a gigster or an indie makes a lot of sense for you. If you dream of employing people and having a large, strategic impact on the world (or even your community!), then you’ll need the economic freedom being an entrepreneur can provide. Finally, solopreneurship is a great middle way approach if you want to balance quality of life with personal freedom.

The spectrum I’ve laid out here can also be seen as a progression implying movement. What would you need to do to get from one to the next or the previous stage if you wanted to? Or, another way to look at it is as a series of checklists that can help you maximize your activities at the stage you’re in. You could be an indie who acts like a solopreneur in many ways (keeping accounting records, etc.), a solopreneur who acts like an entrepreneur, or an entrepreneur who borrows ideas from indies. Applying approaches from other stages to what you do can help you get the most out of your own game and make reaching your goals that much easier.

Neon Labs is an online platform that supports solopreneurs, gig workers, and other indies with content, coaching, and community. To learn more or sign up, check out our website, or follow us on Instagram.