There are many different types of entrepreneurs. Every person that has ever decided to go it alone has different reasons for becoming an entrepreneur, different desired outcomes, and a different approach. And just like a “Choose Your Own Adventure” book, the type of entrepreneur you start out as at the beginning of your journey may not be the same one you end up as at the end. Ideas, markets and plans change. Sometimes they evolve into something bigger and better than you ever dreamed. Sometimes they crash and burn.
Just like there are many different types of entrepreneurs, being an entrepreneur can mean many different things as well. To one person, it might mean the freedom to work from wherever they want, when they want, in a business that requires only their own talent, a laptop and an internet connection. To someone else, it might mean becoming a billionaire or changing the way we live with a product or service. Some are trying to make the world a better place. Whatever your reason, there is no right or wrong type of entrepreneur to be. But there are some characteristics like your personal traits, skills, interests and goals, that if carefully considered can help you better navigate the entrepreneurial life.
Let’s start with the basics. What exactly is an entrepreneur? According to The Cambridge Dictionary, an entrepreneur is “someone who starts their own business, especially when this involves seeing a new opportunity”. It even goes so far as to give this example: He was one of the entrepreneurs of the 80s who made their money in property. This is different to other sources that identify an entrepreneur as an employer or someone who manages a business, and it’s an important distinction. While technically any person who starts their own business is an entrepreneur, the true spirit of entrepreneurship lies in “seeing a new opportunity”.
So an entrepreneur is someone who sees a new opportunity and starts up a business to serve that need. But the type of business they choose to set up will differ greatly based on the type of entrepreneur they want to be and whether they choose a traditional, startup or lifestyle business model. Of course, the opportunities themselves often determine the business model. If your idea is a revolutionary new software application, you’re not going to have a traditional or lifestyle business model. On the other hand, if your opportunity is say a niche in the marketing industry, you’ll have your choice of traditional (brick and mortar advertising agency), startup (scalable online-based platform) or lifestyle (solo-operator).
A lot of it comes down to your motivation. Knowing what drives you as an entrepreneur can help determine what type of entrepreneur you want to be. Here is an overview of some common types.
- The Empire Builder
This is an entrepreneur that doesn’t want to just start a business: he or she wants to create a multi-million dollar empire. Whether it’s via mass production or a number of businesses and revenue streams, this is the entrepreneur who is out to take over the world.
- The World Saver
The primary motivation of this entrepreneur is to make the world a better place. They are philanthropists at heart who are motivated by how their product or service will benefit others. From non-profits to help underprivileged people, animals or the environment, to technology that can improve quality of life, this entrepreneur is trying to make a positive impact.
- The Inventor
This entrepreneur wants to create. Inventors are the thinkers and creatives who see new possibilities and dedicate their lives to innovation, applying their skills and knowledge to conceive new products, technology and solutions to modern day problems.
- The Moneygrubber
This type of entrepreneur is motivated by money. The type of business, product or service matters only in relation to how much wealth it can create. Moneygrubbers will focus on highly scalable businesses or opportunities that yield high profits, and they will often build the business quickly, sell, and then move on to start the next one. These are not to be confused serial entrepreneurs who are often motivated by their constantly evolving new ideas and projects rather than money.
- The Freedom Seeker
Many entrepreneurs are born from their desire to be the masters of their own life. They simply don’t want a traditional job, and many of them don’t want a traditional lifestyle either. For this entrepreneur, being able to design his or her own work life is the most important factor for starting a business, which is why many pursue startup or lifestyle businesses. While it is possible for a Freedom Seeker to achieve work freedom with a traditional business, it usually comes with more time constraints than the other two.
But how does any of this help the newbie entrepreneur? If you understand your motivation for wanting to start a business, you will be in a better position to build one that serves your needs. Sure, you should also consider your skills, expertise and your interests (after all, you aren’t going to be successful if you have no skill-base in your chosen industry or you have absolutely no interest in it), but at the very core, the question should be “why do I want to be an entrepreneur?”
If you’re not sure which entrepreneur life is right for you, check out this 6 minute quiz to find out what type of entrepreneurial endeavor best suits your personality. It also includes some good information about the types of entrepreneurial business models and what it takes to succeed in them. Or if you’re not even convinced you have what it takes to be an entrepreneur, check out this one from Entrepreneur.