There Are 5 Basic Types of Entrepreneurs. Which 1 Are You?
It took me almost 20 years to understand what type of entrepreneur I was and how to make that work for me.
I’m not talking about mysticism and philosophy here. This isn’t Myers-Briggs personality tests and trust falls. This is about properly applying your skills to your craft.
Why It’s Important to Understand How You Operate
I spent most of the beginning of my career thinking I wasn’t going to be good at entrepreneurism because I wasn’t like the entrepreneurs I read about or worked with. Then I spent a few years after that trying to be someone I wasn’t. All that did was make entrepreneurism, my work and my job, a lot harder than it needed to be.
Once you know how you identify with entrepreneurship, you’ll approach every problem, every decision and every initiative in a way you’re good at. In fact, you’ll approach the growth of your company in a new light.
It’s crucial for the founders and leaders of a startup to know how they operate, but it’s also just as important to identify every kind of entrepreneur you have at your company. Then you’ll understand what their motivation is and, more importantly, how they work.
Then you can get everybody working together toward the same goals.
Here are the basic five entrepreneurial types I’ve found over and over again. It’s not all of them, and of course each person is a little different, but it’s a good start.
1. Solution-First Entrepreneurs
I’m a problem/solution entrepreneur. But more specifically, I’m a solution-first entrepreneur.
Yes, in some sense, every entrepreneur identifies a problem and invents a solution, but that doesn’t make every entrepreneur a solution-first entrepreneur.
I can identify, right now, about a hundred big problems with huge total addressable markets (TAMs) attached to them. I know. We all can. And I think I can pick out a dozen of those problems, and sketch out what I believe are viable, affordable, and attainable solutions for each problem. I can probably scrape together the funds to bring at least one of those solutions to market.
I’m not going to do any of that, because it’s not how I work. I used to think I was just lazy or apathetic. Then I realized that kind of entrepreneurial strategy is for a different kind of entrepreneur, and it’s not me.
The difference is a solution-first entrepreneur is not interested in coming up with a solution — they’re interested in coming up with the solution. Solution first means the solution solves a problem in a way that completely changes the scope of the process that’s causing the problem. Thus, the solution can be applied to other problems, in other processes, for other people, in other scenarios.
The solution-first entrepreneur is the type that has to be careful they’re not inventing a solution in search of a problem. They also have to know and understand and love the problem enough to be able to extrapolate that problem anywhere and everywhere.
This is why I’m so into product and innovation and customer-driven development and experimentation. I’m constantly creating and testing new hypotheses.
This approach can drive other types of entrepreneurs nuts. Remember what I said about hundreds of problems with huge TAMs?
2. Opportunity Entrepreneurs
The type of entrepreneur who identifies a number of problems, picks one, and chases a new solution for it, is what I call an opportunity entrepreneur.
This type of entrepreneur follows technical and business trends, and they do this either actively or passively — meaning they might be in a field that requires this kind of focus, or they just might be hyperaware of what’s around them.
They usually pick the problem to solve not by their affinity for it, but whether or not they think the solution is worth the effort. In other words, there’s a little bit of money chasing here, or maybe a lot.
A good number of opportunity entrepreneurs are MBAs — people who are more infatuated with business than most of us. And these entrepreneurs, more often than not, have a better chance at finding funding and indeed solving the problem they’ve chosen to solve.
The one thing that can trip them up is when the solution gets more complicated or painful or requires more sacrifice than they’re willing to commit. This happens when the problem turns out to be much bigger than they first assumed. If they have a certain lack of passion for the process, their motivation to find the solution diminishes as the potential reward diminishes.
Opportunity entrepreneurs need to remain motivated. They need to keep their eyes on the prize.
3. Technical Innovators
These are what we think of as technical founders, but you don’t have to be a low-level coder to be a technical innovator. I actually started my career as a technical innovator, got increasingly more technical, and then realized that I was better off leaving the low-level technology to the coders.
Technical innovators are indeed obsessed with technology, and are immersed in it enough to realize when there is a low-level opportunity to do things faster, better, or bring the benefits of technology to a wider audience. They invent new ways to do those low-level technical tasks that have huge implications at a higher level.
The question is usually this: What are those huge implications? And at what level?
Technical innovators are usually paired with someone who can answer that question by productizing the low-level technology and scaling it. The technical innovators who don’t need to be paired become the technical founders. I was a technical founder for a long time, and I started a lot of projects that didn’t last because I didn’t think I needed help on either the technical or the business side.
Technical innovators need that help at some point, just like the non-technical entrepreneur needs technical help.
4. Sales Entrepreneurs
This type of entrepreneur may stumble as they’re bringing a new product to market, but once they do, they are off to the races. Entrepreneurism isn’t just about making. That’s R&D. Entrepreneurism is ultimately about selling the thing you make.
Enter the sales entrepreneur.
This type of entrepreneur usually gets started with an existing product or service and finds a new use case or a new market for it. They land and expand, then they build an Amazon-like machine around it.
Much like the technical innovator doesn’t have to be a coder, the sales entrepreneur may never have had a role in sales. They might just be good at it.
Back to doing what you’re good at — can you imagine a sales entrepreneur trying to build a company by being a coder, or the low-level coder doing sales call after sales call? Even taking the stereotypical nonsense out of it, it’s just a huge waste of time on either side.
On the other hand , can you imagine the sheer force of putting an opportunity entrepreneur, a technical innovator, and a sales entrepreneur on the same founding team? Or even replace the opportunity entrepreneur with a solution-first entrepreneur.
This is how knowing what you are leads to success.
5. Industry Innovator
There’s one more type to talk about. The industry innovator is hard to find because they’re usually sequestered off in some comfortable job at some large corporation, doing thankless work keeping an entire area of that company from collapsing.
When you do find them, they’re super valuable, because when they emerge, it’s usually because they have an idea to make a run at something that’s already been proven viable, valuable, and scalable. They just need to remove all the corporate layers.
Now, that’s easier said than done. But here’s why it’s so necessary.
The industry innovator knows a lot about a lot within their industry. They know how the products are made and sold, they know where the talent is, they know who the customers are, and they know how to navigate the politics.
What they usually don’t know is how to replace all the infrastructure stuff that their coworkers waste a ton of time and money doing poorly.
If that’s the case, then this type of entrepreneur needs to be paired with another entrepreneur who has solid startup experience. The counterpart needs to know when to push the accelerator, how to navigate when moving at faster-than-corporate speeds, and also probably do a lot of level-setting on caution, worry, and concern as the startup starts to go fast.
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Learn what type of entrepreneur you are and how you operate. Because when you understand how an entrepreneur operates — especially when that entrepreneur is you — you get more done, you waste less time, you take more risks, and you make better decisions.