Thursday, February 28, 2013

Which Kind Of Entrepreneur Are You -- And Why?

In my experience, I’ve found three different kinds of entrepreneurs everywhere I’ve went, from investment banking to the vending machine industry, from the technology industry to the nonprofit world, from Hong Kong to Las Vegas, from poker tables to a seminary, from multi-million dollar valuations to bankrupt and back. (I’ve practically been writing an entrepreneurial “Divine Comedy.”)

But the three entrepreneurial types I’ve encountered have endured — and only recently have I realized that it’s a fourth, lesser-known type that’s the most intriguing.

#1: The pragmatic entrepreneur

One kind of entrepreneur discovers a niche in the market – by finding a consumer “pain” or by creating it – and provides a solution for the pain. It isn’t terribly important if that pain is an addiction to tobacco or a starving child’s hunger; what matters the most is the return, the enterprise, the accomplishment. The return is usually financial, but sometimes it’s recognition, respect, prestige, or a warm fuzzy feeling. This is the pragmatic entrepreneur.

#2: The passionate entrepreneur

Another kind of entrepreneur starts with what he is passionate about and builds a business around it. It doesn’t necessarily matter whether or not there is consumer demand or sufficient resources. The venture could be quite selfish or quite noble, quite feasible or quite crazy, for a good passion or a bad passion. One thing is certain – he will tackle it with passion. This is the passionate entrepreneur.

#3: The social entrepreneur

Then there are the entrepreneurs who are out to do good. They’re willing to accept a lower return (or sometimes no return at all) in order to help other people or advance a cause. Today, these entrepreneurs come in many varieties. Some simply donate 10 percent off the top, while others dedicate their entire lives and businesses to helping others. Some of them operate nonprofits, and others operate normal companies while vowing not to prioritize profit. These are social entrepreneurs.

Why we urgently need a fourth kind of entrepreneur