What Type Of Entrepreneur Are You?
Many types of entrepreneurs can be successful, but they all have to know one important fact about entrepreneurship
When the media is celebrating entrepreneurs, it paints them as the modern day rock stars: travelling the world, glamorous lifestyles of private jets and yachts, bending the ear of politicians and ending up on the cover of a magazine. Even if you don’t buy that, it is quite possible that you have subscribed to the ‘passive income’ myth. Set up a little business, use other people’s money and other people’s efforts and you can sit on a beach while the money rolls in.
The entrepreneur’s dream can appear very seductive, and it is increasingly attracting many of the best and brightest from all walks of life, but in my experience wherever an entrepreneur hails from they will typically fall into one of three categories.
Which type of entrepreneur are you?
I fall into this category, and there are plenty of others like me. People like us have always been hustling, starting businesses and trying to find ways to make money. This breed of entrepreneur probably didn’t do well at school, always railed against the system, probably broke the rules and felt a little bit on the outside.
Think of people like Sir Richard Branson (Virgin), Michael Dell (Dell Computers) and Larry Ellison (Oracle), Bernie Ecclestone of Formula One fame and Sir Alan Sugar, the founder of Amstrad and the star of The Apprentice. They all left education early to start their businesses.
Exclusion can be a great motivator to becoming an entrepreneur. If you’re not very good at school, or you feel excluded, it tends to drive you into entrepreneurship because without the grades or networks you don’t get the opportunity to climb the corporate ladder.
We never thought of ourselves as being entrepreneurs when we started; we were just using our brains and smarts to hustle and make money from the opportunities we saw.
Increasingly, because there is so much glorification of the entrepreneur ideal, a lot of sensible people are jumping out of corporate jobs and starting businesses. There are a couple of reasons, but here are the two main jumper delusions:
First, the market has convinced them they have to be doing something they’re passionate about (see our “dreamers” below), so there’s this idea that if you’ve discovered your passion you need to create a business around it to have the ideal lifestyle. The problem is that the market doesn’t care what you’re passionate about, it cares how you can create value.
Secondly, a lot of people jump out of “good” jobs because those jobs don’t allow them to be “creative”. They believe that if they start their own company they’ll get creative freedom back. But you can be far more creative in a company where you don’t have to worry about HR, marketing, operations, making the coffee, managing IT systems and all of the other responsibilities a new business owner has. The minute you throw yourself into a startup environment, creating your own business, your responsibility goes through the roof, and there is a risk that your creativity leaves the building.
Dreamers are the entrepreneurs who want to save the world. Dreamers are “mostly harmless,” to quote Douglas Adams. There are people who have a good ethos and great intentions, and they dream of being an entrepreneur.
But a dream will only get you so far; you need money to make a difference in the world. A real dreamer entrepreneur will take the next step and figure out a business model that will begin to create value from their idea. Once they have proven that they can create value for one person, they will have much more credibility when raising investment on the promise that they can change the world.
All three types of entrepreneurs can be successful, and in most cases, those that are successful have realized one important fact about entrepreneurship — you don’t have to invent something new to be an entrepreneur and start a business.
The successful entrepreneur
McDonald’s didn’t invent the hamburger. EasyJet didn’t invent air travel. Virgin didn’t invent anything. All they did was take something that somebody else was doing, differentiated it and developed a faster, smarter or cheaper version. Yet on Dragon’s Den every entrepreneur that comes on has invented something, which perpetuates the myth that entrepreneurs need to be inventors.
Whatever type of entrepreneur you are, to be a good entrepreneur you need to look at where people are spending their money at the moment and try to channel that existing market, those existing cents, to your bank account instead of another bank account. Much easier to get people to spend a dollar they’d already spend, than trying to get them to spend a new dollar they never thought about spending.
Callum Laing is a New Zealander who has started, built, bought and sold half a dozen businesses in a range of industries across two continents. His new book Agglomerate: From Idea To IPO In 12 Months shows how small businesses are using a collaborative approach to level the playing field with big companies and getting ahead while maintaining their independence.