Many times we talk about entrepreneurs as if all entrepreneurs are the same. No they are not. As far as I can tell there are at least three kinds of entrepreneurs. I want to discuss these in today’s blog. I hope the distinctions will be useful to you on your journey.
Technical entrepreneurs are skilled people within their professions who are concerned with personal satisfaction based on their excellent professional skills. They think- “If I am great at my profession then I should be great at running it as a business.” These view their business as a source of income. They focus on maximising their income even at the expense of the underlying asset – the business. The intent is not growing the business but growing one’s income. In effect they replace the former corporate employer with another employer called SELF. They work for themselves. The technician builds a business that depends on him, his skills, talents and interests. In actual fact, he is self-employed as he creates a business that offers him a job. His main focus is to maximise his income from the business and not necessarily increase the value of the business. This person’s business is fully dependent on himself. If he does not show up to work, there is no revenue.
Bona fide entrepreneurs are those who want to achieve personal wealth and financial reward simultaneously. These generally seek the growth of both revenue and asset value. They view their business as an investment. They seek to balance their regular revenue stream from the business with the capital appreciation in the long term. They therefore seek business growth and sustainability.
This entrepreneur builds an enterprise that liberates him while creating significant equity returns on his investment. He grows the business to a point that it can run itself under the hands of professional managers. He invests in growing the business and building its systems so that it sustains him. This one can afford to go on vacation while still earning an income. He heavily invests effort, time and money to ensure that a day comes when the business can spin without him continuously spinning the plates.
Professional managers are principally concerned with constructing a successful business which they can manage for both financial gain and personal satisfaction. They pride themselves in operational excellence and management skills. They work for the business. Their focus is demonstrating what can be done with the business. They tend to be perfectionists. They do not mind growing the business as long as the business is text book perfect. They view the business itself as a work of art – something impressive that gives them bragging rights.
Michael E. Gerber contends that businesses established by technicians fail because they assume that since they are good technically and understand the technical nature of their business, they therefore understand how to build a business that does the work. Not all astute bankers are good banking entrepreneurs. Not all skilled healthcare practitioners make good healthcare business entrepreneurs.
Entrepreneurship is not about excellent technical skills, but about the ability to create businesses that will do the technical work. The art and craft of building businesses is critical to entrepreneurship.
Gerber characteristically states that while a technician goes to work in his business, the entrepreneur goes to work on his business. Entrepreneurship is about building a business that will work for you.
I recommend that in your entrepreneurial journey you move towards building the business. Work on the business and not work in and/or for the business.
As you start on the entrepreneurial journey identify yourself on this scale of entrepreneurial types.