An entrepreneur can be the one who opened his coffee shop. It may be a scientist who made new technology and started his own business. It could be a high school boy starting a lawn mowing service. It may be that someone finds students to guide or earn money through a website or a page.
So, what does it mean when I say “I’m an entrepreneur?” Which am I? How do people know?
Yes, I understand that the key feature is the Entrepreneurial Spirit, which flows commonly among persistent entrepreneurs, large and small.
Many well-known entrepreneurs started their careers by offering a simple service, hence the common reference of the lemonade stand.
But I would like to create a different classification of entrepreneurs. Just as Eskimos have more than a dozen words for different types of snow, entrepreneurs must have clearer terms for what they do.
I believe that types of entrepreneurs should be classified by these characteristics:
• Scale: how many employees, customers, revenue, etc.
• Difficulty in Initiation: requires permissions and regulations, fundraising, new technologies, patents.
• Opportunity cost: what he needs to give up to become an entrepreneur. Could they earn $ 200,000 a year anyway if they didn’t start the business?
• Creativity / Originality: did you truly create something new in society, or just following the trend?
• Associated Risk: What do you lose if you fail?
Previous experiences / experiences: whether or not this enterprise is the first.
Furthermore, the one who failed once is often greater than the one who succeeded once. Because anyone can fail, but it is more entrepreneurial that one of them fails and does not give up.
With these means of measurement, I made some classifications. Some entrepreneurs fall into two or more of these categories, but I don’t see this as a problem. In addition, many people start with one, gain experience and move slowly to a different group.
Classification 1: Solo Entrepreneur
Usually an individual company (just him / her) with friends as customers. It is most often a service that requires time, but little or no investment.
There are few opportunity costs like Entrepreneur Solo, especially students who are selling gum or mowing someone’s lawn.
Tasks are generally not original. Needless to say, they have limited experience in entrepreneurship.
Classification 2: Commodity Entrepreneur
They are entrepreneurs who make healthy investments to start something that is a little saturated in the market. This means that you can find many similar companies that do the same thing.
Most restaurants and cafeterias, as well as common commodity companies, fall into this category. They generally follow what the Opportunity Entrepreneur does after becoming common and adapted.
When asked why they started this business, it is usually not because they see special demand or a better way of doing things in the market, but simply because they think it would be interesting (“I always wanted to open a flower shop”) or they are good at the technical work of that business and want to open a business with that skill.
The Real Estate Market would be categorized as Commodity Entrepreneurship.
Classification 3: Network Marketing & Franchise Entrepreneur
For those who don’t know, network marketing is the pyramidal way of doing business, where you do business and recruit others to manage divisions with you. They do the same, and you get some commission from those below.
It is a legitimate business, as they really create some value, as long as they are actually selling a valuable product or service.
I feel that the startup process for these types of entrepreneurs is very easy, and the opportunity often comes in search of you with full force, and not the other way around (entrepreneurs create opportunities).
I feel that this is more of a salesperson / manager than one of the types of entrepreneur, because even though it is necessary to make entrepreneurial tactical decisions, nothing truly new is created.
Just follow someone’s model, use someone’s equipment, and have relatively small investments and risks.
80% of the business is worked for you. Most people can start with no past experience (as a start-up entrepreneur). However, it is true that the same problems with stress and creativity are seen in Network Marketing, so it is still considered one of the types of entrepreneur.
Classification 4: Entrepreneur opportunities
Entrepreneurs look at the latest trends, find out what works and do it. Usually, they identify some competitive advantage and start something that exists, except better.
The scale is generally decent and the initial investment is usually very large. Getting started is difficult because you have to go through all regulations and records, as well as get enough capital.
The risk is relatively high because it is difficult to correctly assess which market trends can be followed and have the technical skills and time to do it well.
Creativity and originality is based on how the entrepreneur chooses the business and creative processes to obtain a solid advantage, but it is not completely innovative.
On a supply and demand economy graph, these are the people who “shift the supply curve forward” when there appears to be profit in an industry.
Finally, Opportunity Entrepreneurs generally have some previous experience as a Solo Entrepreneur.
Classification 5: Innovation Entrepreneur
These people create something new, something that no one else has done in an industry. They identify something that is not yet missing, and they do what is necessary to make it happen.
The scale would normally be quite large to bring something completely new to the market. The difficulty in initiation is extremely high, especially in some sectors.
However, the strongest characteristic of an Innovation Entrepreneur is that they think outside the box and are willing to take great risks, as nothing indicates that this business would work at all!
Classification 6: High-tech entrepreneur
The High Technology Entrepreneur can be one of the most respectable in terms of entrepreneurship. Instead of creating improvements or introducing something good to an industry, they create industries.
These guys invented computers and started the entire computer industry. They invented automobiles and started the auto industry with all its parts and accessories.
As you can see, starting a business like this is incredibly difficult. Investments, level of creativity and risk are extremely high.
You are investing in something that may not even be created! (Probably tested and proven) These companies or organization often need to be supported by venture capitalists, and they also have a high chance of failing due to technology competition (someone may already be almost ready with what you are trying to do when you are still involuntarily inventing ).
It takes a true Entrepreneur to spend so much time, capital, money lost elsewhere, and energy for this huge risk. However, there should not be a mix between inventors and entrepreneurs.
There are cases where the Inventor is also an Entrepreneur (or Entrepreneur), but often simply knowing the technological work of making a new product does not make him one of our types of Entrepreneur.
Inventors create great new products, but entrepreneurs create great new businesses.
Classification 7: Escape Entrepreneur
Some people go into their ventures because they simply want to earn a lot of money and / or want to be their own boss. In essence, they are entrepreneurs because they want to “escape” from something else.
These are wrong reasons and usually result in failed businesses (unfortunately, thiese types of entrepreneurs are the majority of people who start businesses and are part of the reason why so many companies fail.)
Often, these entrepreneurs fail because they realize that being any types of entrepreneurs means working twice as much as having a job and being paid 1/3 of it, especially in the early years.
The effort will often cause them to lose motivation and “escape” back to their previous career.