What Type Of Entrepreneur Do You Want To Be?

The other day, I came across a heated forum discussion that went back and forth debating over the definition of a “true” entrepreneur versus just a regular small business owner. The thread was over 5 pages long and participating in this discussion were a wide variety of different business owners. Some of them ran brick and mortar retail stores. Some of them ran small-medium sized internet consulting or software companies. And some of them were freelancers looking to eventually start their own firms.

Photo By maubrowncow

The main crux of the debate was whether a person opening a brick and mortar business like an ice cream store or a freelancer with no employees could be considered a true entrepreneur. Where do you draw the line between true entrepreneurship and just running a small business?

As the two sides argued back and forth, I couldn’t help but think…who the heck cares? Why are you guys wasting your time on such a stupid topic and who are you to define what a “true” entrepreneur is? As the discussion progressed, the small brick and mortar business owners as well as the freelancers were clearly getting miffed because they were being excluded from the entrepreneurship category. Since when did entrepreneurship become a club?

My Definition Of An Entrepreneur

As far as I’m concerned, everyone who participated in that forum discussion is an entrepreneur. To me, an entrepreneur is anyone willing to take a risk to be their own boss. Someone who is willing to take control of their lives, call the shots and dictate the outcome whether it’s good or bad.

It doesn’t matter whether you open an ice cream shop, an online wedding linens store, a software company or a hardware company. As long as you are adding value to this world doing whatever you are doing, you’re an entrepreneur plain and simple. Don’t let any stuck up, pompous business owner tell you otherwise. So what if your business will never make a billion dollars. Entrepreneurship doesn’t have to be about the next big thing

Choosing The Right Lifestyle

Part of becoming an entrepreneur is understanding what you want to get out of it. If you want to go for the home run and someday create a billion dollar company, then that’s your prerogative. But just keep in mind that working on such an ambitious business venture will likely consume all of your time and sacrifice your social life as well. Not to mention that your chances of success will be very slim.

As with anything, there are many different flavors of entrepreneurship. On one end of the spectrum are the people who want to create something that will completely change the world. They are willing to sacrifice all of their time because their business is their top priority. They push the envelope and want to develop the next big thing and are willing to play the odds.

On the other end of the spectrum are people I call “lifestyle entrepreneurs”. The lifestyle entrepreneur category is certainly the category that I fall into. I don’t want to devote my entire life to my business. I don’t want to sacrifice my family, my friends or my social life. I want a business that complements my life.

What Is A Lifestyle Entrepreneur?

Simply put, a lifestyle entrepreneur is an entrepreneur that creates a business to enhance their lifestyle. Instead of working 8 hours a day at a job or spending 20 hours a day trying to grow a business into a billion dollar company, the lifestyle entrepreneur finds creative ways to free up their time to do what they truly want to do. The lifestyle entrepreneur actually seeks to work less and finds ways to automate the non-critical aspects of their lives.

In my case, my wife and I set out with a goal to spend more time with the kids and be there at every stage of their lives. It didn’t really matter what business we created. We just wanted something that would allow my wife to avoid having to work a day job without sacrificing our lifestyle. For us, this meant earning at least 100K but this number could be different depending on the person or the situation.

An Entrepreneur Is An Entrepreneur

Because our business has well exceeded our goals, my wife and I have a much greater freedom to do whatever we want. I don’t have to worry about losing my job because our business can cover all of our expenses. My wife can spend all of her time during the day playing with the kids while only devoting a small portion of her time at night managing the business. Meanwhile, money flows into our bank accounts while we sleep.

That is why I chuckle every time someone looks down upon certain categories of small business owners. Most people are obsessed with creating a sexy business or making lots of money. Don’t get me wrong, I greatly admire those entrepreneurs who put in the killer hours to truly push the envelope with their businesses but it’s not for me. At the end of the day, we all have to decide what our priorities are. Is your main goal in life to run a company? Or is your main goal in life to enjoy it? If these two things happen to coincide, then power to you.

But you need to decide up front what you want to get out of becoming an entrepreneur. Don’t let anyone classify what you are or what you want to be. Ultimately, you need to create your own definition of entrepreneurship and do what is best for you. Skip the silly debates!

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24 thoughts on “What Type Of Entrepreneur Do You Want To Be?”

  1. The lemonade stand guy in the photo is crushing it! I like your definition of an entrepreneur and I would argue that you don’t even have to be self-employed. Some jobs allow people to be very innovative and encourage activities that are economically beneficial to both the company and the employee.

  2. I stopped using the term “entrepreneur” years ago, after reading an article in Inc magazine in which a well-known “serial entrepreneur” claimed that being an overworking obsessive is part and parcel of being an entrepreneur.

    I prefer “owner-managed business” to “entrepreneurship”, because the truth is, a rational business-starter seeks to _reduce_ risk, not increase it. And, having worked for some people who were obsessed about the business and wanted everyone else to be also, I don’t think most people above thirty years old would (or should) want to work for such a person.

    Finally, experience with my present employer has shown me that ten to twelve hours a day, five or six days per week is the most that people can sustain and still be productive. After about three weeks of working past that, most people are on autopilot and make dumb mistakes that cost the employer both time and money. A lot of times, overworking is caused by someone’s refusal to let someone else make some decisions. Or the refusal to add needed staff members to the team. And if the boss works sixty-plus hours per week, you know the employees have to do likewise, even if neither he nor they are productive.

  3. Lifestyle entrepreneurship for me!

  4. In my opinion, none of those participating in the conversation is currently an entrepreneur. An entrepreneur wouldn’t have the time or the patience to partake in such a silly discussion, they’re too busy growing their business and getting things done!

  5. @Elie:

    The whole point of Steve’s article is that a real “entrepreneur” is anyone that takes the risk of operating his / her own business enterprise on any scale. Entrepreneur means “risk taker”, so by definition, if those people own their own businesses (or are actively in the process of forming them), they *are* entrepreneurs.

    There are more kinds of entrepreneur or business owner-operator than just the self-absorbed jerks you read about in magazines. Steve’s “lifestyle entrepreneur”, for example, is someone who is in business because it enables him / her to live life the way they want–which could mean having time to engage in pointless Internet disputes–rather than living by someone else’s definitions.

    If an entrepreneur doesn’t have the time to build and maintain relationships with his / her spouse and children, for example, that isn’t someone to look up to. It is someone to pity, because his / her selfishness will eventually bring hurt back to his / her feet.

  6. @W^L+:

    I didn’t mean to imply that to be an entrepreneur you need to be a self-absorbed jerk, and, in fact, believe that many successful entrepreneurs only achieved their success because of their abilities to build and maintain relationships. That being said, there’s a difference between building and maintaining relationships and partaking in meaningless arguments about a definition that is irrelevant.

  7. I agree with you Steven, entrepreneur is anyone who has the courage to say – I can be my own boss.
    I also wanted to do something big for a long time in my life, but after I got truly clear, I realized that creative freedom is my core feeling when it comes to having a business and spending time with my son is my top priority. I will never feel creatively free and be able to spend as much time with my son as I want if I have to work 100 hours a week. So I narrowed down my focus, simplified my goals and am happier than ever.

  8. I agree on the surface the debate seems silly. And to debate if someone is an entrepreneur or not is really moot because the term effectively means anyone who isn’t an employee of someone else.

    But there *is* a difference and it does matter, at least in the macro (economics) sense. But rather than spout opinion I’ll start with a discussion of research on the topic as I think this explains why some people view different entrepreneurs differently.

    Many entrepreneurs do fit into your “lifestyle” category. They are actually a subset of an even broader category of entrepreneurs that an Arizona State University study calls “Replicative” entrepreneurs:

    http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1275

    Replicative entrepreneurs make up a large segment of the economy and they serve population growth. Unfortunately they themselves do not grow the economy. Instead it is “Innovative” entrepreneurs that actually contribute significantly to economic growth:

    http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1299

    The Kaufman Foundation is the world’s largest foundation devoted to entrepreneurship and a recent study of theirs…:

    http://bit.ly/bKW9GJ

    …found that:

    “High-Growth Firms Account for Disproportionate Share of Job Creation.”:

    According to senior analyst Dane Stangler in any given year the top-performing 1 percent of firms generate roughly 40 percent of all new jobs. Further so-called “gazelle” firms (ages three to five) comprise less than 1 percent of all companies, yet generate roughly 10 percent of new jobs in any given year. The “average” firm in the top 1 percent contributes 88 jobs per year, and most end up with between 20 and 249 employees. The average firm in the economy as a whole, on the other hand, adds two or three net new jobs each year.

    So it really *does* matter what type of entrepreneur someone is, if you are someone who cares about economic growth of a region. Having lots of lifestyle entrepreneurs doesn’t grow the tax base significantly nor does it add a lot of net new jobs in a region. Having lots of successful innovative entrepreneurs in a region, OTOH, does grow the economy significantly.

    A bit of personal commentary on “replicative” vs. “innovative” entrepreneurs: because of the nature of replicative startups I believe replicative entrepreneurs tend to focus less on growing the pie and more on getting a bigger slice of the pie. This puts them in direct competition with other replicative entrepreneurs in their market and lends them to a less collaborative nature than you often find among innovative entrepreneurs.

    Let’s take two examples of which we find many where I live: interactive agencies and real estate brokerages. Both are run by entrepreneurs and both are in general cut-throat when it comes to their competition. They of course need to be driven; if their competitor gets enough projects and/or houses sold they may not be able to get that new house, take that vacation, or send their kids to college, etc. This can come across to many as selfishness on the part of the replicative entrepreneur and may be why some people “look down” on “certain types” of entrepreneurs.

    But I don’t think it’s selfishness in most cases, it’s just the nature of being a replicative entrepreneur. And that doesn’t mean there is anything wrong with replicative entrepreneurs; indeed they are the backbone of the economy. It does mean, however, that many people (myself included) gravitate towards spending time with innovative entrepreneurs and away from spending time with replicative entrepreneurs.

    Which brings me to a final point. I think the term “replicative”, “lifestyle” and “innovative” and often misapplied as an adjective to the word “entrepreneur.” Instead I think those terms should more correctly be applied to “startup”, “business” and “company.” Indeed, people are more complex and versatile than being just one thing. In past periods I have run “an innovative startup,” in other periods I have run a “replicative company.” And who knows, later in life I might run a “lifestyle business.”

    So I’ll posit that we’ll all generally agree that economic growth is a good thing. And because of that I’ll also posit that most of us would agree that having more companies significantly grow the economy is better than having fewer. Thus I’ll finally posit that it’s better to encourage more people to launch innovative startups compared to having them launch replicative/lifestyle businesses.

    If we can agree on that I’ll simply say that maybe what we need to do is educate people on the difference between an innovative startup and a replicative/lifestyle businesses because without knowing the difference I believe most entrepreneurs would never realize the ramifications and pursue replicative business models because they are more obvious.

    I sure as heck didn’t realize any of this until after 20 years of “entrepreneuring”, 3 years of running the web entrepreneur group and then finally being able to read the research papers I just referenced. I really wish someone had told me the distinction way back in 1988 when I first graduate college and was 1.5 years into my first entrepreneurial venture.

    So in summary I’ll leave you with this: *everyone* who works for themselves in some way is an entrepreneur. But clearly different type of ventures have different ability to affect economic growth and thus we should be encouraging entrepreneurs to be more innovative whenever possible. OTOH, if a lifestyle business is what is really right for someone then more power to them for taking charge of their own life’s direction!

    Hope this helps.

    1. Thanks for all of the comments on this post! I love hearing about your personal stories and your opinions.

      Mike, I just wanted to comment on your response. If I sensed that the forum discussion was a scholarly one. Ie, if they were debating about the macro economic aspects of various definitions of entrepreneurship, then I wouldn’t have had the same reaction. As it stands, the discussion pretty much turned into a pissing match where certain business owners were trying to make themselves appear bigger and better than the mom and pop shops.

  9. Looks like I’m one of those who won’t bother spending time debating on the definition of a “true” entrepreneur. Lol.

    Let’s say that I have my hands in (started or co-owned):

    Brick and mortar (my parents’ mannequins, hangers, and hair wig shops—home based)
    A very small web marketing solutions business — that hosts and co-owns any new brands that works with it
    Lifestyle businesses — a wholesale BBQ business, with a vegetarian BBQ (sister site, expanded with a dedicated menu for people who are on a strict vegetarian diet)

    And not forgetting my own blog.

    Let’s say that entrepreneurs can be more fruitful and make a living by focusing their time and attention on actually running their businesses. :)

  10. When I first started Green and Chic, my goal was to “give it all I had”. Health issues crept up and I had to pull back on that goal (as well as stop working my 9-5). At this point, I really don’t know what I need to do, but I know what I CANT do and working myself in the ground does not do me any good.

    I think sometime this year I will have to go back to a regular full-time job, but haven’t quite worked out how that will work for my health and business yet. Everything is up in the air right now.

    In my industry, it seems like if you’re not going to give it everything, it just wont work.

  11. I share your sentiments on that silly arguement:

    “To me, an entrepreneur is anyone willing to take a risk to be their own boss. Someone who is willing to take control of their lives, call the shots and dictate the outcome whether it’s good or bad.”

    Interestingly enough they were trying so hard to define what an entrepreneur is I didn’t understand the point they were trying to make, other than who had the right definition.

    The real important question I think, revolves around what you create, the value it brings and the ability to generate passive or semi-passive income from building up processes that allow you to operate your business as an owner rather than as an employee.

  12. I enjoyed your post very much. When my kids were born, I also made the choice to quit my banking job and stay home. It made sense that I be the one to resign since my husband was earning more than me. Eventually, he too decided to set up his own consultancy business. Family comes first for both of us. Then again, we simply love the lifestyle we are having today!!

  13. This is something I debate internally occasionally, thanks for bringing it up. We were out with some friends the other night and my friend asked me how business was then she followed it up with, “exactly what do you call your type of business.”

    Sometimes I find myself feeling “inferior” to brick and mortar businesses some of my friends own but then I look at the types of things that come along with their businesses and realize that I far more enjoy operating a web biz.

    So, I think the simple answer is to be the kind of entrepreneur that you enjoy being most. If you enjoy it then you’ll be willing to put in the sweat equity that will make it successful.

  14. @Steve “If I sensed that the forum discussion was a scholarly one. Ie, if they were debating about the macro economic aspects of various definitions of entrepreneurship, then I wouldn’t have had the same reaction. As it stands, the discussion pretty much turned into a pissing match where certain business owners were trying to make themselves appear bigger and better than the mom and pop shops.”

    That’s a fair point.

    But you didn’t link to that discussion so I didn’t have the benefit of reviewing said pissing match before commenting. I only had your take on it which I addressed in an (evidently) “scholarly” way. And that brings me to ask, “How is your post and the subsequent comments of agreement here substantively any different from those forum posts other than simply being from the counter-perspective?” Isn’t a scholarly perspective a more genuine way to dissect the issue than pissing in the other direction?

    Of course if you were just writing link-bait then never mind. ;-)

  15. Steve, i agree with you, being an entrepreneur doesn’t require the criteria of been the ceo of a multi million dollar company. anybody who has possession of a new enterprise, venture or idea and assumes significant accountability for the inherent risks and outcome is an entrepreneur

  16. I am pretty sure entreprenuers not only had to work smart, but also must have a good amount of subject matter knowledge in the relevant business field. You have to know what you’re doing and aim to provide the best quality and good experience for your customers.

    Lastly, I believe by putting in passion and effort into your business, you’ll have a fair chance to succeed!

    Best wishes to all entreprenuers,

    John Muren @
    Feng shui singapore

  17. Nice post. I think a true entreprenuer has the ability to leverage time and effort, no matter which field of expertise he is in.

  18. My definition is always having more time and also helping people be successful by teaching and inspiring them with action and words.

    Life is great if you share ;)

  19. Everyone has the rights to choose who they want to be and what they want to be.
    If only someone will be there to touch their heart and show them the way.

    Entrepreneur certainly has that qualities that might just be lacking in some people.

  20. Chelsea Dunn says:

    I just want to say that “lifestyle entrepreneur” is exactly what I am. This is a very new term to me, I discovered it while on a personal search in a “which way?” context. I have been running my own business for almost two years and love my “mediocre” lifestyle. I went on this search because of the question I CONSTANTLY get. “How’s business?”. Even though I make enough money to be happy and control my own hours and destiny, I thnk people ask me this question because my business isn’t the big, all-over-the-web norm. I don’t even have a cell phone. I am so reluctant to grow in fear of giving up my freedom, yet I feel as though I am not seen as “successful”. My reason for commenting is because I KNOW I can achieve much more to the outside world but choose not to. I think this is a hard choice sometimes, because of the constant explaining, many people don’t understand. I hope more entrepreneurs will take the time to really evaluate what they want in life. I wish more people in general would be honest with themselves. Life is more than money, even though money seems to be the forefront of societies’ mind. If this would be, people who think as I do wouldn’t have to second guess themselves! LOL

    1. Becoming an entrepreneur, perhaps for most people, is to meld passion with career and to embark on the challenge of running their own show. Though in some instances, critical personal situations force people to take massive action.

      And to quote a famous line “Two little mice fell into a bucket of cream. The first mouse quickly gave up and drowned, but the second mouse, he struggled so hard that he eventually churned that cream into butter and he walked out. Amen.”

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