Types of Entrepreneurs Explained: What Category You Belong To?
In this article, I have covered all types of entrepreneurs starting from part-time entrepreneurs to full-time entrepreneurs, along with reasons why people pick full-time entrepreneurship ….Reasons or the triggers that force them to start their journey.
Entrepreneurs are that species of ManKind because of whom the whole world economy is moving. For any economic activity to take place, someone has to innovate, someone has to make a business out of innovation, someone has to distribute & finally someone has to sell that innovation.
All of these business activities are done by this business species called Entrepreneur who for doing every activity is ready to take risks...risks that sometimes are small but sometimes can be big enough to even make them bankrupt overnight….but then if there are risks in this journey then so are rewards too….and it is this risk and reward that keeps an entrepreneur going….In fact, you must know that being an entrepreneur is the only job in this world where your earning is unlimited and the only person who can limit your growth is YOU…..YOU as an entrepreneur and nobody else.
Now I assume that you must have read motivational blogs or stories of successful entrepreneurs and their respective journeys on the internet or somewhere. I am also sure that these stories would have motivated you to become an entrepreneur at some point of time or the other but before even thinking of starting up, you must have been seeking answers to a lot of questions regarding this roller coaster journey called entrepreneurship.
And one of the questions that must have definitely bothered you at least once in life is on what are the different types of entrepreneurs in this world and what is that type you might belong to?
Voila…… The good news is that I will answer that question for you in this blog and in the end, I will make you think the type you might fall into.
In this article, I have covered all types of entrepreneurs starting from part-time entrepreneurs to full-time entrepreneurs, along with reasons why people pick full-time entrepreneurship ….Reasons or the triggers that force them to start their journey.
In fact, these triggers are the most important point that you as a reader must know because it is these triggers that finally lead an entrepreneur to start his or her journey and unless you know the starting point your research about them will always remain incomplete.
I also go on to cover entrepreneurs by the types of business segments they like to start along with the kind of businesses they like to start..
Now as you read this blog, I first want you to grab a glass of beer or something that soothes your mind (A cup of tea or cold coffee would also do, but something for sure). The reason being, this blog is full of real-life stories of my clients, stories that I want you to relate to, and enjoy more than just reading for academic purposes.
How was the RESEARCH done?
Before I start, I must share with you that I have written this article after researching the behavior and background of hundreds of entrepreneurs who started their respective entrepreneurship journeys under various circumstances and it is these journeys and circumstances that I have shared below in the blog. While some of the entrepreneurs managed to succeed, there are a lot many who failed but what is commendable among all is the effort they made towards making this journey possible.
WHO am I to even write this?
As I am writing this blog on 6th May 2020, I must tell you that I am a 37-year-old man, an Entrepreneur, Business Coach, Business Consultant, Digital Marketing Specialist, and Sales Expert holding over 16 years of full-time experience. An experience that includes 10+ years of working in large MNC corporates like Samsung, HP, and TCS in roles of Sales, Strategy, and Tech building. And 6+ years of working full-time as an entrepreneur building my own ventures and a business coach and consultant helping other entrepreneurs of start-ups, Small & Medium Enterprises(SME).
My daily routine involves spending time only around solving the business problem of either my own venture FABELLUS Home Salon or any of my student’s/client’s ventures. Ahh… just to avoid confusion, by mentioning students in the current paragraph, I actually mean my clients, entrepreneurs/founders/business owners.
My clients prefer me to call them students and not clients as they consider me their business mentor & coach first and then anything else like a business consultant or marketing consultant etc.
The Beginning | Major types | 2 types of Entrepreneurs
Let’s start now and to begin, first you must know that there are majorly 2 types of entrepreneurs.
Those who are into Part-time entrepreneurship while currently occupied in a Full-Time job at some company.
Those like me who are into Full Time into Entrepreneurship, completely occupied in their companies.
Let's first discuss Part-Time Entrepreneurs. They work in their day job as an accountant, sales manager, software engineer, marketing manager, project manager, teacher, administrator, analyst, and at many such similar job roles. I like to call them Full-Time Job and Part-time Business (FTJ-PTB) entrepreneurs. These FTJ-PTB entrepreneurs along with their jobs, keep trying their hands on multiple business opportunities in their entire life span with a good belief that one fine day, yes one fine day, they will be able to become a Full-Time Entrepreneur leading to financial freedom.
Do you know that there are at least 100 times more part-time entrepreneurs than full-time entrepreneurs in this world? The good part about this category is that they are extremely hard working.. because they belong to the category of sloggers (Hard Workers)….they first work for 8-9 hours on a weekday at their company/corporate jobs and then again for hours at night and 10 - 12 hours over weekends engaged in their business opportunities.
Unfortunately, a lot of them have few common problems like financial burdens of home loan, car loan, or education loan, and these financial problems which sometimes restrain them from going full time into entrepreneurship.
Though these folks have big dreams in their eyes, unfortunately, a lot of them start and end their entrepreneurship dreams with MLM companies only, yes those network marketing companies that only end up fooling a lot of these people by showing them false dreams and fake stories of people becoming rich overnight. Fake stories like someone from a poor background buying an Audi or BMW because of their success in those MLM companies.
I feel terrible that a lot of people especially the ones in their youth easily believe that shit and join such MLM companies. I will be talking about such Network marketing companies in a different article, some other time but for now, let’s bring our focus back to this article only.
Now as we proceed, you will be reading some harsh realities and I request that weak-hearted folks can stop reading here…. continue only if you are ready to read the bitter truths of this journey.
HARSH BITTER Truth
I feel sorry, extremely bad for this category of entrepreneurs because despite being such hard-working people, this category has less than 1% chance of becoming a Full-Time Entrepreneur ever in life.
And I am not saying this on my own but it's the statistics that speak it out loud. Not just statistics, you can also try observing people around you. Do you know that everybody around you has been wanting to become an entrepreneur at some point of time in life for sure but unfortunately could not? The reason is only because of the fears that they develop while trying to build this journey for themselves.
3 Major FEARS & 1 Major Excuse Why 99% never become Full-Time Entrepreneurs?
3 Major Fears:
Fear of losing the current predictable source of income, the job, for an uncertain future
Fear of losing time invested in the venture.
Fear of losing money invested in the venture.
1 Major Excuse:
Not been able to raise money to start…. Waiting for that million-dollar funding using which they believe they will build another Google or Facebook or Jio....(Lil fun intended.. No offence plz).... I have been through this journey, have built a couple of ventures in the past and hence these thoughts have passed through my mind as well… so it’s ok :)
Only Real REASON Why 99% never become Full-Time Entrepreneurs?
The only real reason is that 99% do not know “How to BUILD a business”. Yes, they do not know how to build a predictable business that can scale.
This means that though they have an idea they do not really know how to build a business out of that idea. They don’t really know how to validate that idea on which they want to work, how to validate if that is the best business for them?
Even after validation, they do know how to convert the idea into a real business opportunity.
Though they are every day over engaged in social media doing some free course or the other but they still do not really know How to build a business? They have no idea on how to build customer awareness, acquisition and retention strategy, How to market the product, How to sell, How to find co-founders, How to Hire the “first team”... “when to hire”.. “who to hire”, “how to retain”, “who to retain”, how to raise funding and many many more.
A lot of them do not themselves have answers to any of these questions but want investors to put money on the table and believe that they will be able to use investors' money for good use. I call such people living in fool’s paradise and I wish you as a reader are not living in such a dream world.
According to my experience, a lot of these (FTJ-PTB) entrepreneurs are either stuck in wrong opportunities or are just in their dream phase that one day they will convert their idea into a reality.
A lot of them are also living in that fake statement that says you need to gain solid corporate experience before starting your own venture. Unfortunately, they don’t even know that the corporate experience is totally waste when it comes to starting a business from SCRATCH.
I have a lot of these aspiring entrepreneurs who come to my business program “Business Incubate” with such doubts around starting their business journey and after attending my business program they get equipped with my “29 Business & Skill” frameworks, “12 Business Start” Theories, that they use to kick start their business journey.
Now that we have covered a type called (FTJ-PTB) entrepreneurs, let’s move on to another major type/category called Full Time Job as Full Time Entrepreneur (FTJFTE) or better to call the REAL Entrepreneurs.
While explaining this type, I will also explain the reasons or triggers because of which they choose this journey.
Now using their triggering points or reasons to start, we can further categorize these Full-Time entrepreneurs into 2 major buckets:
Entrepreneurs by Chance
Entrepreneurs by Choice
Entrepreneurs By Chance
The first bucket consists of those who become “Entrepreneurs by CHANCE” or even better to call “Entrepreneurs by Force of Nature” and their triggers to start are all by nature of force and not by their own personal choice. Which means “they did not choose this journey” but “the journey chose them”.
Despite themselves not choosing to be part of this journey, a lot of them have evolved as one of the finest entrepreneurs of their times. Classic example Jef Bezos of AMAZON who says, he would have preferred to be a computer engineer had AMAZON not happened by chance. Keep reading to know the reasons to start “Entrepreneurship by CHANCE”:
1.No Good Job Opportunity @ Completion of Education
They did not have a choice of doing anything else in life at the point of time when they started their employment journey or when they ended their formal educational journey. Now, this could be either because of a lack of fruitful job opportunities at a time when they ended their education or maybe because the jobs offered to them were very less in salary and not falling in line with their career expectations.
**Please Note Going from here in the article, I will be changing the names of my actual students to protect their privacy.**
A classic live example of the above-mentioned cases is my personal coaching student Rajesh, who runs a jewelry shop in Bangalore. He finished his engineering in Electrical Stream from Bangalore university. The kind of jobs he was getting after engineering were not falling in his salary expectations, so Rajesh was really not keen to pick up those jobs and hence started the entrepreneurship journey to earn a decent income.
2.Victims of Layoffs
Then there are these who unfortunately got laid off in recession or due to company restructuring and they were left with no source of income. A classic live example is my student Sagar who was working for a large MNC as a committed resource but even after working for 15 years, he was suddenly left without a job because of organizational restructuring. Poor guy now was left with no other option but to earn on his own and hence entrepreneurship was more out of compulsion and less out of a choice.
3.Victims of Unavoidable Personal Circumstances
Then there are few who lost their jobs because of any uncontrollable circumstances like marriage, health issues like pregnancy in case of women, or even a break for education. These folks find it difficult to get back to corporate and hence take up something that keeps them occupied and help them earn money as well.
Here sharing an example of one of my students Abdul, who’s wife had to leave the job because of pregnancy and then later did not get any suitable job after the break. Because of financial hardships, she had to get self-employed and hence started a tiffin business from home.
4.Could not even Complete Education
There are few who couldn't even complete their education due to some kind of crisis, financial, or personal and had to start their entrepreneurship journey midway of their education to support their family. I have met a lot of them in my business program called “Business Accelerator” which I run only for existing business owners. These guys have a lot of zeal and are grounded in nature but unfortunately lack the skill to scale. They work in that “James Bond” style of operations. They know how to build a business to a unit model but fail to scale.
Then there are a few others who join their family business. Here I will quote the example of one of the doctors in my business program. He because of certain circumstances had to join his father’s nursing home. Now though it looks from the external world that these kinds of entrepreneurs have the advantage of receiving an already “Set business” on a platter but the reality is that most of the time the next generation is not possessing even basic business skills required to manage the business, leave aside growing it to the next level.
In most of the times, when the business fails, the onus is put on the younger generation but according to me, it is not always just the fault of the younger generation in not being able to manage the business but also the older generation who did not take the right steps at the right time to create the next generation business leaders in the organization. They make this century-old mistake of coaching skills of building business to the younger generation by themselves and try pushing their ideology to the younger generation.
Like I always say, its a different thing to be a successful business owner and its a different thing to create one more like you. By doing this classic mistake of creating another business leader on their own, they do not realize the communication and generation gaps between them and this gradually leads to friction and failure of businesses. I will be discussing more on this in coming case studies...
This is a very interesting category of entrepreneurs where the Husband is usually working full time at a job and his wife is an entrepreneur. I have a classic example of one of my personal consulting students: Wife Dentist and Husband Software Engineer.
All these above categories have one common thing in them, that they are grounded by nature and are eager to grow but barring few, most lack business skills in them. They are mostly self-employed and are involved only in transactions and not in real business-building activities. Hence they are not able to scale their business beyond a point. I have many such students/clients who after my coaching and consulting have scaled their business by 4 to 7 times the number they come to me.
Entrepreneurs by CHOICE
Now that we covered the first category among full-time entrepreneurs and understood their starting reasons or triggers, let’s move towards knowing the triggers for the second category of Full-Time Entrepreneurs who are called “Entrepreneurs by Choice”.
1.Right After Education--(Extreme Guts):
Let’s first look at ones who immediately after finishing education despite having offered to work for MNC companies, don’t opt for placement, and start their own ventures full time.
What TRIGGERS them to start so early?
Some of them have seen money so early in life that they do not believe in working for corporates for small money, monthly pay packages.
I know a group of folks from Kerala who in their engineering days in early 2000 were selling SIM cards and making money. Now they had seen so much money in doing this part-time business during education that the thought of working for a Software MNC for 30-40K per month looked highly unattractive to them.
Some of them I am personally aware of even ended up making companies that are valued in hundreds of millions. But the sad part is not everyone has the same story. If there are few successful ones then there are many others who started well but after reaching a certain scale, did not grow at all. Then there are also many others who went back to corporate jobs because of not growing as per expectations.
2.After Successful Corporate Stint
Now comes the most interesting class of entrepreneurs that comes after working in some company for a couple of years. These are those people who have been doing very well for themselves in their corporate careers. They have been earning decently high salaries compared to other peers of similar age and have grown really fast in their careers. But still, they quit their jobs to start entrepreneurship.
Now the question is WHAT TRIGGERED such successful corporate folks to quit and try starting something of their own?
Intellectual Level not Matching with Peers
They find their current team member’s and superior’s (bosses) intellectual level not matching up to their standards anymore. Their bosses are not able to apprehend their ideas, leave aside appreciating and executing them.
Their creativity is often challenged and they are made to work in systems and defined roles which they do not enjoy. They see their skills being underutilized in corporate sectors.
Victims of Office Politics
They are young, ultra-successful compared to other peers who are much older to them. They deliver better results than others but whenever it comes to promotion, they are all given the decade-old excuse of not having sufficient experience to reach the next level.
Live life only Once
They feel life is once to live and dreams can not be achieved by working for someone else. They are go-getters and have been reading about success stories of Sachin and Binny Bansal from Flipkart, Bhavesh Aggarwal from OLA. They want to achieve similar heights and at a young age like Sachin, Binny and Bhavesh. The advantage of this category of entrepreneurs is that they have corporate experience behind them, so they are subtle and experienced in decision making and handling people.
Now that we covered the starting or triggering point of why Entrepreneurs start their journey, I shall explain the types of Entrepreneurs by the kinds of Businesses they ever like to START. This is a very interesting type of categorization as it covers the business interests and skills of entrepreneurs.
High Innovation led Entrepreneurs
These are Entrepreneurs who like to Innovate and create things that people would have not seen before. International examples like Steve Jobs of APPLE, Elon Musk of TESLA, Bill Gates of MICROSOFT, Thomas Edison of General Electric.
Just like international ones, there are also many Asian and Indian Examples to this type of entrepreneurs like Vijay Sekhar Sharma of PAYTM or Bhavesh Aggarwal of OLA.
The characteristics of these entrepreneurs are that they only like to work on businesses that do not exist before they create it and bring it to the world. Now there have been allegations that a lot of Asian entrepreneurs have built a copy of American companies but I would not totally agree to it as a lot of the Indian/Asian startups despite being similar are far advanced to their American CounterParts. These entrepreneurs build highly capital intensive fast-growth businesses.
If these guys succeed, they end up BUILDING huge businesses but you must also know that the Failure rate of these businesses is very high.
Start Small and Dream Big
These types of Entrepreneurs are also called JUGAAD entrepreneurs who are always ready to make their way up by doing whatever it takes to reach the top. They are always hustling and are never tired. They usually start small but gradually build up to create large opportunities sometime in the future. These entrepreneurs do not end up raising a lot of capital for their businesses ever. A lot of Asian, especially Indian entrepreneurs belong to this category as they do not believe in building businesses by burning cash.
These entrepreneurs strongly believe in starting small, struggle, learn every aspect of the business and they grow it large one day…. Their Dreams are big but they do not like to grow just on the basis of CASH investment. The failure rate of these entrepreneurs is very low but their growth is very slow in the initial phase of the journey till they reach the point of Acceleration.
Me Too Gang
These entrepreneurs build businesses that are usually a copy of other businesses. They have the potential to copy-paste literally everything in the business model, price to promotion campaign, literally everything, and sometimes also have the guts to launch it in the same territory of the original brand.
They are not the first mover types but very often are seen as a fast mover.
Even while creating “Me Too”, they try adding innovation to produce better products at a better price than the original creator.
We have covered types of entrepreneurs by their “starting triggering points” and “business type” they like to enter and now I will share with you the types of entrepreneurs on the basis of business segments they choose to enter.
Entrepreneurs categorization by Business Segment
There are many kinds of entrepreneurs when it comes to categorization by business segments like Manufacturing, eCommerce, retail, distributorship, technology, consulting.
Manufacturing entrepreneurs are those who set up factories or shop floors manufacturing some product or the other. For example one of my students/clients AGASO technologies is the owner of a Kitchen Cookware product.
E-commerce entrepreneurs are the ones who trade in e-commerce platforms. They usually start as traders but sometimes go on to build brands on e-commerce platforms as well. One of my students/clients is doing a designer jewellery e-commerce business.
RETAIL Entrepreneurs are owners of retail shops focussed on selling an individual product or bouquet of products. They start as self-employed business owners but sometimes also succeed in building chains. Example, an Indian brand called Poorvika Mobiles in the South of India. Most popular business segments they enter include Grocery, Garments & Mobiles. I am personally very passionate about this kind of business and my own Salon and Spa business which till recently was only providing services at home will now be expanded to retail Outlets too.
Distributorship Entrepreneurs are ones who are only interested in taking distributorship rights for a brand in a region. Example every country, state and the city will have many distributors of Fast Moving Consumer Goods (FMCG) products. Taking an Indian Example again, Samsung or HUL or P&G will have its distributors in every state who will have statewide distribution rights for the brands. This is highly capital intensive business.
Technology Entrepreneurs are those who have interests in technology-based ventures. They could be self-employed entrepreneurs providing website or digital marketing kind of services to large companies that are providing IT services like Infosys, IBM of the world.
Consulting Entrepreneurs are ones who work on solving problems for other businesses. They operate in all kinds of problem-solving like financial, IT, process, Marketing, operation, and even Strategy building. These entrepreneurs start small but have in the past built businesses worth billions of Dollars. Ex. PWC, KPMG, Boston Consulting.
Trading Entrepreneurs like to explore any kind of trading opportunities. Trading opportunities can be found in import/export, wholesale trading, or even stock market and commodity-based trading. These entrepreneurs like transactional large volume trades and are not big fans of building brands in general.
Now that I have covered all types of entrepreneurs in this article and even shared their triggers to start this journey, I am sure you are wise enough to find what category you belong to.
Do share in the comment section below on what category you belong to and also share this article with your friends on social media so that they can also figure out their category.