Successful entrepreneurs can be put into categories and many subcategories, but they can be broken down into maybe four or five different types with unique characteristics. Some people start a business or multiple businesses just for the money. Others do it because it’s their passion, they do it for a good cause, or because they see a social need or do it because they’re natural innovators.
It’s important to remember that entrepreneurs each have a track record of previous failures, but they use them to their advantage. Failure is a wonderful teacher and to not learn from it is a terrible waste of experience. In order to figure out how to proceed, it’s important to know the different types of entrepreneurship and figure out which suits you best.
The Traditional Entrepreneur
You’ve heard the classic stories of someone coming up with a brilliant new idea and making a business out of it. Traditional entrepreneurs are the kinds of businessmen and women that you probably think of when you’re thinking of company starters.
Within this category, you might also consider certain types of small business entrepreneurship—like if a hairdresser started their own salon or a plumber started running a new business venture. On this small scale, they might be hiring mostly local employees and family members, but it can still grow and expand from there. These small business owners are absolutely entrepreneurs in their own right.
This may also be referred to as opportunistic entrepreneurship. They identify gaps in the market and create a new product or service that fills that gap.
How Success is Achieved
There are millions of people who have started their own successful small and large companies in America. You’ve probably come across a few just by walking around town. They are everywhere. Many of them don’t even think of themselves as entrepreneurs.
The word comes from the French term “entreprendre,” which means “undertake.” And depending on what they’re willing to undertake, anyone can truly be an entrepreneur these days. Going into most industries is easier and more accessible than ever, thanks to the internet. You can apply for jobs, do research, and conduct business deals on your phone today—so the role of traditional entrepreneur is one that’s increasingly easy to take on.
Before the proliferation of the internet, it was much more difficult to conduct business meetings and transactions with supply chains and manufacturers. You had to actually have connections and know certain people.
Having the right connections today certainly helps, but it’s no longer the requirement that it once was. Learning the particular business you’d like to enter is also easier than ever. There are countless free learning programs and online courses that are just sitting there waiting to be accessed.
When it comes to the product or service you want to introduce to the market, it’s important to conduct market research and understand what kind of gap you’ll be filling.
Apple: An Example of the Traditional Entrepreneur
Apple is now a two-trillion-dollar company, and its products and services are used around the world. Today, nearly everyone owns a computer or smartphone, and Apple is largely responsible for that shift in society.
Steve Jobs, Steve Wozniak, and Ronald Wayne started Apple in Steve Job’s garage. Jobs had a simple idea; build a tool that can allow ordinary people to far exceed what they would normally be capable of. He thought of it as a “bicycle for the mind.”
Computers before the 1980s were complex, and usually, only experts could effectively operate them. You actually had to learn the computer’s code language for the most basic tasks.
These machines were almost exclusively used by scientists, international corporations, and certain parts of the government. The general public didn’t really know much about computers in the 60s and 70s beyond rudimentary things like calculations and information storage.
Steve Jobs recognized the gap in the computer market. Computers needed to become friendly and easy to use. Computers could be something in an average person’s room and not just in a lab or office building.
Apple also revolutionized cellphones with the first iPhone in 2007. Steve Jobs recognized how difficult cellphones were to use. Simple things like voicemail were hard to navigate, and the internet on these devices was overly simplified.
The iPhone solved these problems with random access voicemail and an unrestricted web browser that loaded websites in their entirety. These areas were not previously addressed by the competition.
The Passionate Entrepreneur
Sometimes people start businesses simply because they enjoy a passion or because they believe in a cause. This type of work is a bit of a double-edged sword. People are a lot more inclined to work hard on something if they feel intensely about the work.
The possible downside is these people’s feelings getting in the way of profitable business objectives. Sometimes profitability isn’t even the goal for these types of entrepreneurs.
Brandon Stanton: An Example of the Passionate Entrepreneur
You may remember the “Humans of New York” project from years ago by Brandon Stanton. Brandon took 10,000 pictures of individuals in New York and asked a few questions about their lives. These photos were published on a website with a little bit of info on the subject.
Brandon originally worked in finance but lost his job. Afterwards, he decided to dive deep into his passion for photography and created the Humans of New York website that is still up to this day. It’s filled with interesting stories and amazing photos.
His photography landed him awards and helped launch his career for photography and even publishing books. He is a perfect example of a “passionate entrepreneur.” Brandon has done public speaking tours and still works on photography projects today.
For a Cause
There is a subcategory under passionate entrepreneurs for people who invest and pursue a cause. A French father and robotics engineer named Jean-Louis Constanza built a robotic exoskeleton for his wheelchair-bound son.
The machine allows the user to stand and walk using voice commands. What started out as a personal project has transformed into a profitable undertaking. The exoskeleton is not available for personal use at home.
However, many hospitals in several countries have bought and used them and have a price tag of roughly $177,000 each. This entirely new business cropped up because of a father’s desire for his 16-year-old son to walk.
The Buying Entrepreneur
People buying already established businesses is probably one of the most common types of entrepreneurship. Why go through all of the financial hardships and technical difficulties of starting a business when you can just jump right into one that is already working?
There are two major hurdles to overcome when buying a business: choosing the right business and having the capital to buy it to begin with. This is where a business loan from your bank may be able to help.
Bill Gates: An Example of the Buying Entrepreneur
Bill Gates, the co-founder of Microsoft, started as a traditional entrepreneur and graduated to a buying entrepreneur by mergers and acquisitions. His portfolio consists of multiple organizations, shares of companies, and charitable foundations.
Before Bill Gates stepped down as CEO of Microsoft in 2000, the company had acquired numerous software businesses. Instead of competing, Microsoft largely bought their competition’s talent and assets before they could become major threats.
While most buying entrepreneurs simply buy a company to run themselves, buying other small businesses has been a way for many large companies to avoid competition. This is a strategy that opportunistic entrepreneurs like Facebook have been utilizing for a long time.
The Serial Entrepreneur
Serial entrepreneurs are people who start multiple businesses at once or throughout their lives with varying degrees of success. People like these have one thing in common; they simply never give up.
Some of the biggest serial entrepreneurs in the world, like Sir Richard Branson, are more than happy to tell people about their past failed companies. That’s usually why they are so successful; they learn from many mistakes.
A Dangerous Game
It’s a lot easier to be a serial entrepreneur once you’ve already established multiple successful companies. You have a foundation and experience to go from, but people just starting their first businesses are in for a rough ride.
Even starting the simplest and smallest of companies is a huge undertaking that requires a lot of time and resources. Want to start a chain of coffee shops? There is a litany of things that need to be done before you can even open the doors.
Online businesses are becoming more popular than ever thanks to the low cost and low risk. If your online company fails to gain traction, it wouldn’t be as much of a hit on the balance sheet if you had a brick-and-mortar location.
Physical locations have so many pitfalls that it’s no wonder eCommerce has been more popular than ever with younger entrepreneurs. And the best thing is that you can run multiple businesses online from pretty much anywhere.
There are some costs like domains, marketing, and programming, but those costs pale in comparison to physical locations. Being online will expand your reach with potential customers. With the right marketing strategy, your companies can be international overnight.
Trial by Fire
If you think you have what it takes to start a company or multiple companies, go for it. However, it’s imperative that you ask yourself why you are pursuing what you’re pursuing. You need to understand what type of entrepreneur you want to be.
As long as you don’t give up and have a clear vision in your mind, you will succeed in one way or the other. Creating a business is like natural selection, though. Watch out for the pitfalls others have gotten themselves into and learn from both the successful and unsuccessful.