What is an Entrepreneur?
Do an online search of the word ‘entrepreneur’ and you get over 40 million hits.
Many of these search results concentrate on the stereotypical entrepreneur; the person who, five years ago, could have appeared on Dragons’ Den (also known as Lions’ Arena and Shark Tank) as an aspiring “contestant” and who now qualifies to be the next multi-millionaire in the row of big leather chairs saying “I’m in!”
Reid Hoffman, one of the founders of LinkedIn, is quoted as saying:
"Entrepreneurship is jumping off a cliff and assembling a plane on the way down."
Which is an interesting way of looking at it, but...
What does an entrepreneur do once he or she has assembled the plane and is flying, not falling?
- Sell/rent that plane to someone else, find another cliff and start again?
- Fly the plane?
- Or sell/rent the plane to someone else and become a passenger on a cruise ship to the nearest Caribbean island/tax haven?
Work-a-Holic Risk Takers
One of the great problems of being an entrepreneur is that you have to move fast; if you don’t, you reach the ground before you have the wings on the aeroplane. You also reach the ground at terminal velocity.
Coupled with this, you can rarely find anyone who will hold your hand as you jump because entrepreneurs nearly always have to start on a shoestring. They can’t usually employ experts, nor can they afford to indulge in a lot of R&D or market research. These two things make for two common hurdles that entrepreneurs must overcome; personal workloads and personal risk.
Most entrepreneurs will happily tell you that success didn't come overnight; what did come overnight was lonely burning of the midnight oil, then getting up before dawn and only fitful sleep in the in-between period as they worried about tomorrow.
It doesn't matter whether you are moving into uncharted waters like the early dot.com entrepreneurs or relatively new areas of an existing industry as Richard Branson did when he launched Virgin; if you want the rewards, you have to put in the effort.
Unlike employees, entrepreneurs take on this workload and shoulder high personal risks; Branson’s parents had to re-mortgage their home to bail him out with the taxman on one early occasion.
Duncan Bannatyne is a millionaire entrepreneur in the British Dragons’ Den TV programme (non-UK readers may know the format as Shark Tank or Lions’ Arena): he started with nothing (not even a bank account) and almost immediately became caught in the crossfire of a turf war between competitors in which several people ended up in hospital, both in casualty and in the morgue. (In case you are wondering, Bannatyne was working in the normally genteel world of children’s’ ice cream sales!)
These guys are multi-millionaires but being an entrepreneur isn’t solely about making lots of money.
A tale of two entrepreneurs
David had an idea for a revolutionary new business. He chatted to his brother-in-law Richard. They decided to go into partnership and set up their own company.
They began small, worked hard and were successful. A couple of years later they had a debt-free, nationwide business with outlets across country. They started to disagree and so, in order to keep family ties unbroken, David bought Richard out. Richard took a goodly fortune from the business and left David to run what was now his firm. A couple of years later David sold the business for another fortune.
David went on to form another new venture, grew it to be a multi-million pound empire and sold it on. He repeated the process several more times in his life and was often referred to as a “serial entrepreneur”.
Richard also set up a new business venture. Sadly, through no fault of his own, it failed. He became a self-employed driving instructor. He was successful, but he enjoyed teaching people to drive as a self employed person, rather than wanting to manage a whole driving school. Then, due to a change in family circumstances, he moved home, retrained and set up a small therapist practice. He is still self-employed and still successful in so far as he wants to be. He does something he enjoys doing. He is his own boss.
He works hard, but reports that he doesn’t have the work-life balance problems that many “successful entrepreneurs” complain/comment about.
David and Richard are both successful entrepreneurs, but their individual histories are quite different, as different as they were as personalities.
Here is another case worthy of consideration and reflection:
Dong Nguyen from Vietnam created a game called "Flappy Birds" for smart phones and tablets. A very simple but addictive game - not the sort of thing that would be considered a hit on Dragon's Den.
Dong published flappy birds online for free - solely earning revenue from the advertising associated with the game on the distribution site.
He took it off the web after a short while. He did this, not because the game was a failure but because it was generating up to US$50,000 a day in advertising revenue!
Dong found that the intrusion generated by that amount of money was wrecking his life!
Does that make him a “failed entrepreneur”?
Being an entrepreneur simply means starting your own business, rather than being an employee of someone else. Being a successful entrepreneur might lead you to stop being one and become a captain of industry; if you build the business and then manage it for the rest of your working life you aren’t an entrepreneur anymore!
Like Richard and Dong, many entrepreneurs don't want to earn lots of money; they prefer the quieter life of running their own business but not running an empire.
One of the major differences between an entrepreneur and a business executive is the breadth of choice; Dong chose to pull the game because the decision was solely his.
Richard was able to choose to downshift because he had no boss, no staff and no shareholders to consider.
Being an entrepreneur takes courage and effort, a bit of luck and a lot of persistence. Yes, rising up a corporate ladder takes similar characteristics, but the risks?
It is the ability and willingness “to make one heap of all your winnings, and risk it in one turn of pitch and toss” that sets the entrepreneurs aside from the rest of us.
We may envy their private jets and their tax havens, or we may envy their simple avoidance of office politics and their position as their own boss, but without entrepreneurs nations fail. With them they thrive.
Further Reading from Skills You Need
If you are thinking about running your own business, or already do so, but feel that you need some guidance, then this eBook is for you. It takes you through self-employment in easy steps, helping you to ensure that your business has more chance of success.
The Skills You Need Guide to Self-Employment and Running Your Own Business is the guide no new or aspiring entrepreneur can afford to be without!
Based on our popular self-employment and entrepreneurship content.