There are a few entrepreneur characteristics that you find more often in the self-made wealthy than in other homo sapiens.
Most entrepreneurs have something to prove to the world, for instance, and the few who don’t usually want to change it.1
And they all want to be rich, too, whatever they say – if only in that we all secretly want to be rich (even if we’re aware that there are pros and cons to being wealthy).
What about creativity? Tenacity? A head for numbers? A nose for a deal?
These supposed key traits seem to be as randomly distributed amongst entrepreneurs as Mr Potato Head
Loathe gritty Duncan Bannatyne and would rather make money like Warren Buffett? Pick your hero and go for it.
Prefer Bannatyne’s hands-on approach to ex-Dragon Richard Farleigh’s airy-fairy theory? The world’s your deep fried Mars bar.
Types of entrepreneurs: The Visionary
Examples: Steve Jobs, Anita Roddick
Anita Roddick
Visionaries are entrepreneurs driven by a desire to change the world – and the capacity to imagine how to do so.
Vision on its own is just daydreaming, so such an entrepreneur needs other skills to make the vision a reality. Steve Jobs boasted the attention to detail of a reigning monarch, as well as a genius for design and consumers’ desires.
But it was his vision that made transformative products like the iPhone and the iTunes store, and so turned Apple into the world’s largest company.
- Key strengths: Imagination, egotism, seeing the big picture, attracting brilliant followers.
The Adventurer
Examples: Richard Branson, Donald Trump
Richard Branson
If Richard Branson had been born 600 years ago, he’d have been a tussle-haired knight with a winning smile, eager for his next campaign.
Branson is in it for the means, as much as the ends. Obviously he likes money, but it’s an enabler and a way of keeping score. It’s the excitement of execution that gets his blood going – and when that’s not enough, he puts his life in danger some other way, such as his balloon rides.
Adventurers may boast crossover traits with other entrepreneurial classes, but they’re primarily adrenalin junkies who you couldn’t pay to give up their ‘fix’.
- Key strengths: Bravery, energy, tenacity, ‘work hard / play hard’ culture.
The Opportunist
Examples: Alan Sugar, Duncan Bannatyne
Lord Alan Sugar
One reason the communists never stood a chance is that nothing moves as fast as money. From market traders to multinationals, plenty of business is inspired by seeing an opportunity – a gap in the market, a product that’s a hit in a distant land – and racing to profit from it.
Alan Sugar in the 1980s is a great example of an arch-opportunist. He only got into electronics by accident, and he no more dreamed Steve Jobs’ dreams of a PC revolution than he imagined he’d shave wannabe moguls calling him ‘Sir’ on the BBC. Yet for more than a decade nobody in Britain did a better job at spotting gaps in the market and making a killing.
Opportunism doesn’t mean thinking small. At one point Amstrad commanded 25% of the European PC market!
- Key strengths: Spotting gaps, speed of execution, cost to market.
The Asset Allocator
Examples: Warren Buffett
Warren Buffett
Some people wouldn’t call Warren Buffett an entrepreneur.
But I would.
Ultimately all successful entrepreneurs thrive because they put existing resources to a more productive use for profit, whether they’re selling a job lot of fancy duvets at an East End market or combining great design and a bunch of previously unconnected bits of technology to invent the iPhone.
Asset allocators are the purest example of this – they cut out the messy production lines and marketing campaigns.
When an asset stripper flogs apart a business to create something worth more in pieces – or when Warren Buffett sees a company’s true worth before the market and directs his capital towards it – I’d say they’re adding value.
- Key strengths: Valuation, number crunching, curious, thick-skinned.
The System-iser
Examples: Henry Ford, Akio Morita
Henry Ford
Some people are brilliant at process. Henry Ford is an obvious example, having pretty much invented the modern production line.
I think you could put a lot of creative industry wealth creators into this class, too. Such people often think they’re visionaries, but really they’re great at turning creativity into something that runs to a schedule, and therefore can be bottled and sold.
Process is what turns brilliant prototypes into consistent profits. Every penny you can shave off every stage of the production pipeline – or every feature you can pack in that increases value ahead of your cost – builds value.
- Key strengths: Strategy and logic, attention to detail, employee management.
The Specialist
Examples: Bill Gates, Felix Dennis
Felix Dennis
Some people have a calling – a field they were born to. Luckily for them, capitalism enables the business-savvy ones to make a bucket of loot, too.
Bill Gates is a good example. Whereas it’s relatively easy to imagine Steve Jobs running Pixar, the animation house he acquired in 1986, it’s pretty hard to imagine Bill Gates watching a Pixar movie.
Jobs rose to eminence in computing partly because the number of technology-literate people who wouldn’t wear socks in sandals is vanishingly small. In the 1980s, it was close to zero. Jobs was a designer who could have turned his hand to many other different fields, albeit it less mega-successfully. Gates would have been a patent lawyer or an engineer if born a couple of decades earlier. He needed personal computers to unlock his brilliance.
This sounds a bit mean-spirited, but I don’t mean it that way. The world is full of specialists who turn their love and aptitude for a certain field or product or service into something we all rely on, from scientists to architects to artists.
They are lucky that a few can make a lot of money at it – because they’d be doing it anyway, even if they couldn’t.
- Key strengths: Dedication, motivation, knowing themselves.
The Small Business Person
Example: At a corner shop near you
A Subway store, yesterday.
There’s something belittling about the label ‘small business’ that probably begins life in the boys’ changing room at school.
Happily, in the business world size matters but it’s all relative – and having your own modestly statured company is the number one outlet for those determined to be entrepreneurs.
Many entrepreneurs would rather be top dog at a tiny company they own than to be a ‘Senior Divisional Manager for EMEA and Innovation’ at some giant.
The best franchises offer a great take on this entrepreneurialism. Few are the children who dream of selling foot-long sandwiches, cleaning drains, or supplying offices with photocopying paper. Yet plenty of people who have a yen to make money have made fortunes by implementing other people’s systems with a tenacity to terrify the competition.
The average freelancer or contractor is a small businessman or woman, too. In fact, anybody who is not working for a monthly pay slip would do well to consider themselves Me PLC, rather than as a worker for hire. As well as potentially making you more money in the short-term, it might get your mind ready for when you want to expand.
- Key strengths: Flexibility, personal relationships, stamina.
The spare room / free time entrepreneur
Example: Everywhere!
Step into my office... (I wish!)
Thanks to the Internet, it’s probably never been easier to start a side business while staying in your day job.
Making a decent side income, well that’s another matter.
Even the communists at The Guardian have been running a series on being a website mogul, but in truth it’s much harder to make money blogging than it seems. eBay is also increasingly the domain of the big winners.
But there are plenty of other avenues to explore – and the harder or more specialised the better, as there’s much less competition.
Think hard about what you can bring to market. The cost of starting a side business is usually low, and even a little extra income can be worth a lot.
You probably won’t make a million, but a successful part-time business could get you on your way!
- Key strengths: Desire, time management, and caution.
Don’t forget us when you make it
Before you get carried away, please review some of the reasons NOT to start a business.
I always get nasty comments when I point them out, but survivorship bias looms large when we forget that the few famous entrepreneurs – even the hundreds of relative unknowns in the Sunday Times’ Rich List – stand on the broken backs of uncountable also-rans.
So be sure to consider your own opportunity cost.
And then do it anyway.
If you’re really an entrepreneur, that is.
Have I missed out any particularly interesting types of entrepreneur? This is a very broad church, so let’s have your ideas in the comments below! Otherwise read Felix Dennis’ How to Get Rich
- This and the rest of the article is based on my fairly numerous personal encounters with successful entrepreneurs as well as copious reading. Plus the movie Brewsters Millions. [↩]
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Nice thought-provoking taxonomy of entrepreneurs, and a refreshing take on it. The only area I’m not sure about is the spare room version. This is part of the journey – after all Jobs, Hewlett Packard, Virgin, Gates and Roddick passed through it.
It is here that the winnowing begins, for thousands are called but few make it past that stage. I personally have done three lots of spare room operations, two failed financially at an early stage and the last ran for 10 years before being wound up as the market moved away. Persistence in the face of adversity, single-minded focus as well as vision seems to be a charateristic of those that actually graduate from their bedrooms and garages. OTOH these are characteristics os successful people generally so no surprise there.
Just to second the fact that not every Captain Of Industry is the Life and Soul of the Party… In fact in my experience you wouldnt want to be caught sharing a cab with half of them… True I am thinking more of Company Men at the top mebbe but whatever the TV says excitement doesn’t win the day in the business world… it just makes for good headlines for Fleet Street hacks!
I saw this in my email inbox and I knew I had to comment. I like this post but I don’t think Warren Buffett can be classed in this category, even though he is absolutely phenomenal and an incredible force, just because he built his success by investing.
Good post.
@Kagem — I agree my addition of Warren Buffett is a little controversial, as I admit in the post. However, as I say above, I think actively investing on the scale he does can be considered a form of entrepreneurship, due to the way he is seeking opportunities, bringing money to bear, and generating a profit.
If you look at Warren Buffett’s biography it’s easier to argue he’s an entrepreneur — he literally bought entire businesses, department stores he tried to turn around, newspapers where he broke stikes and the paper got nominated for national prizes etc.
Thanks for your comment!
Very nice post! I think that I fall into the spare room/ free time entrepreneur category. But I think that I could easily find myself in a couple of the other categories. I live in Barbados and there aren’t many bloggers here. I think that I’m the only personal finance blogger on an island of about 300,000 people. So I could be considered a visionary from the sense that I’ve gone where no other Barbadian has gone…. Small business person? Maybe. Opportunist? Not quite. The others? Nope.
Wow, it’s one thing to be a spare room entrepreneur in the UK, but another to be blogging from Barbados. Many of us investors are investing to end up their Danielle! 😉
Thanks for stopping by, and good luck on your road to (a) fortune.
Thank-you so much for your encouragement. I will keep trying my best! And I will defnitely keep readying Monevator 🙂
Glad you include Warren Buffett. His entrepreneur-ism is in the finance and business world, he uses those like an inventor uses screwdrivers and screws (or software & circuits). Something that many people don’t grasp mentally, which is what entrepreneurial edge is about. That and the passion to stick at it until it works.
I don’t think I fall into one of the buckets neatly, but I do see traits from the different classes in me. This post made me reflect — my favorite type of posts! 🙂 Thanks!
@Monevator, I think Buffett is really inspirational and I have looked at his background extensively (anyone remember that brilliant fly on the wall BBC documentary with Evan Davis? Loved that) but I don’t think buying entire businesses makes you an entrepreneur, after all there was someone who started Geico or whatever before he got in there.
Not that it makes a drop of difference because he is uber-successful and that’s all that matters.
Great post about types of entrepreneurs! I really admire successful businessmen like Bill Gates, Yuri Mintskovsky or Warren Buffett! They worked hard and so they succeeded in their business and life! I would like to meet these smart people in person!
@stacie
I think the causal link between working hard and being successful is a very flimsy one – there’s very little in the way of empirical evidence to back it up, even Buffet himself talks of winning the ‘ovarian lottery’.
its (almost) all luck unfortunately… so the question you’ve got to ask yourself is, ‘do ya feel lucky punk? well do ya?’
Interesting topic, one of my favourites.
I think it’s what I recall was called a non-reflexive relationship in mathematics.
To be very successful you need to work hard = generally true.
I personally know several self-made millionaires pretty well, and all worked hard, with significant periods (5-15 years) of six days a week, 10-14 hour days.
But does that mean by working that hard you’ll become a millionaire? That is definitely not true.
Plenty of people work hard and never put themselves in contention, of course. Anyone with a salary outside of financial services or a few elite professions (law, say).
But equally, countless people set up businesses and work hard and still fail entirely, let alone fail to become extremely wealthy. Survivorship bias looms extremely large in the success literature.
Life isn’t all about the destination, though. If you’re happy giving it a shot, and you’re prepared to work hard, then perhaps the journey is almost worth it despite the potential lack of reward, compared to if you’d never tried at all.
@ investor
yes, its easy to confuse the two:
a) successful people have worked hard
b) hard working people have become successful
they sound equivalent at 1st read, but mix them up at your peril…
That said, Tennyson got famous for saying, ‘Tis better to have loved and lost than never to have loved at all’
So I think you’ve got it right, have a crack at it, enjoy the ride but don’t be surprised when it goes tits up
your blog has really helped me in my coursework research,bigup
As far as i am concerned my vote goes to 2 people or type of entrepreneurs warren buffet and Steve jobs because of the way they rose and also did business is amazing and inspiration for many young entrepreneurs
Indeed I congratulate Richard Branson great motivation in the shaping of entrepreneurship -He is my role model .
Thanks
I think there is a perception that people are only successful in running a businesses if they work 18 hours a day, 7 days a week and get divorced three time. Perhaps this is often true.
But there are other scenarios.
Of course many fail.
But other alternatives are some people work ‘quite’ hard and are ‘quite’ successful.
Make sense?
And then there’s the social entrepreneurs. People who started companies like Kickstarter, Kiva.
I’m a first time entrepreneur and talking to my mentor who said acknowledging that I have something to prove to the world or to myself is a big step. Yes, making money is definitely great too but I really want to positively impact the world around me.
A spot on analysis of character and a hilarious reference to Mr Potato Head (not enough references to him in the blogosphere). It’s funny but I’ve never actually admired Sir Richard Branson as a character (although he is a philanthropist) and I think that is the clue to determining key characteristics. I do admire Lord Sugar, for his direct approach and his ability to see straight through a lot of fluff. Warren Buffet also comes across as shrewd but smart with a heart and not a flashy show off, so he wins my vote of admiration too.
Another observation would be that some wanted to make their mark and made millions in the process, while others wanted to make millions and made their mark in the process.
It is interesting to know from you the different types of Entrepreneurs, It is amazing and motivational to fit in any depending on the type of business style that suits your dream. I have the chance now to look through the various types and give it a go. Being the only Blues and soul singer in my country Sierra Leone gives me a greater market and chance to make it.
Thanks for the motivation.