Comments on: You’re Not a Real Entrepreneur

By: Organization of Entrepreneurialism at Josh Maher's Blog

Organization of Entrepreneurialism at Josh Maher's Blog — Sat, 10 Dec 2011 17:02:58 +0000

[...] have not really be changed – they have just been extended to the new world application. Steve Blank explains this concept nicely in a recent [...]

By: What’s An Entrepreneur: Four Types | GrowAZ

What’s An Entrepreneur: Four Types | GrowAZ — Fri, 29 Oct 2010 16:57:55 +0000

[...] For the rest of the story and details on each type of entrepreneur, plus Steve’s resources for startup organizations, check out Steve’s blog here. [...]

By: Mark @ Ghillie Suit Warehouse

Mark @ Ghillie Suit Warehouse — Mon, 14 Jun 2010 23:55:44 +0000

Another great article Steve!

By: GaryG

GaryG — Mon, 14 Jun 2010 20:16:43 +0000

I like this article, Steve! Entrepreneurs started this nation and continue to thrive today. They should be recognized, and at Grasshopper we are actually doing a petition for a National Entrepreneur’s Day in order to recognize these great people. http://entrepreneursday.org/

By: Hans

Hans — Mon, 14 Jun 2010 17:08:28 +0000

Hi Steve,

great post. I was always very fast to judge other peoples enterprises. You made a very good observation and I had to learn this lesson the hard way. It’s of course essential to know what outcome you want for yourself.

Thanx for the post. Hans

By: Yuri Ammosov

Yuri Ammosov — Mon, 14 Jun 2010 00:38:20 +0000

In international development studies, there is a popular fifth type – “subsistence entrepreneur”, the one who runs a minuscule business (like a fruit cart) that barely allows him to go to bed not hungry, and that does not have any other earning choices. I think this is pretty similar to your parents at start and makes a good addition as Type 5.

By: william brah

william brah — Sun, 13 Jun 2010 21:37:26 +0000

High wire acts always receive the attention, and for good reason. As Daniel Burnham said: “Make no little plans; they have no magic to stir men’s blood.”

By: Christian Hudon

Christian Hudon — Sun, 13 Jun 2010 18:09:22 +0000

One thing I think is missing from the goals columns for the small business is “be your own boss”. With scalable startups, you’ll have to answer to other people (VCs, investors, etc.) sooner or later, unless you self-finance entirely and never go through an IPO. With a small business, you usually have to answer to nobody but yourself.

Also, I think the grocery store example is closer to the extreme end in terms of work required for a small business. (A greengrocer is even worse.) I can think of a couple of people around me that run small businesses and seem to earn a reasonable living with a not too unreasonable amount of work. Including less than full-time for some, where the business mostly runs itself now and they don’t need to be there all the time.

Not that the other three kinds of entrepreneurs aren’t appealing too, but I felt there was a little something missing on the positive side of the “small business entrepreneur” scale, with only your parents’ grocery store as an example. Thanks for an enlightening post!

By: Nick Rivadeneira

Nick Rivadeneira — Fri, 11 Jun 2010 22:02:46 +0000

Dallas,
I don’t think he is making these classifications based on minimum external investment or whom that investment comes from. Instead, the underlying difference between all the various types of startups is the measure of success. In the case of ‘scalable startups’, the measure of success is a significant ROI for investors (ie. 3x or more). This could be from sub-VC investors as you’ve mentioned for small internet startups, or from multiple large VC firms in the case of physical-tech startups. Heck, you could extend the definition to include the founders themselves as the investors, as long as they are seeking significant ROI due to scaling.

By: Friederike

Friederike — Fri, 11 Jun 2010 16:39:42 +0000

I think you are right, this categorization seems to be more one about business types.

And I agree that running a business and being an entrepreneur is not the same thing.

Steve gives a characterization of an entrepreneur at the end of the post:

“If you put the four entrepreneurs in the room you would understand what they had in common- they were resilient, agile, tenacious and passionate – the four most common traits of any class of entrepreneur.”

I like the distinction between “entrepreneur” and “manager”. Both of them can run businesses but the innovation comes from the entrepreneur.

By: Friederike

Friederike — Fri, 11 Jun 2010 16:30:42 +0000

Hi Steve,

that was was an interesting read! As with most of the things there are many possibilities to categorize entrepreneurs and I like this one although it´s not really consistent.

I love the aim of the social entrepreneur “save the world”. I actually never thought of humanitarians as entrepreneurs, but if you think about it, they are. People like Mother Teresa and Henry Dunant built huge “businesses”. It is so humbling. Entrepreneurial skills PLUS altruism.

By: Rocky Agrawal

Rocky Agrawal — Fri, 11 Jun 2010 15:47:14 +0000

Thanks, Steve. Just discovered what my friend from freshman year in college went on to do… Fred lived two doors down from me and we’d often go for late night Indian food runs down on Devon.

By: ErikB

ErikB — Fri, 11 Jun 2010 14:07:34 +0000

Is that post about entrpreneurship or about businesstypes? You don’t really seem to come to the point here. For what do you need to be an entrepreneur to have a business? For what do you need a business to be an entrepreneur? I see that there is some content in this post, but there is so much consultant like business talk around it that I can’t find it.

By: Dallas

Dallas — Fri, 11 Jun 2010 14:04:06 +0000

Categorizing entrepreneurship with the memes “social”, “small business”, “scalable” is interesting. However, I question the threshold of $X million that differentiates scalable from small business in the context of being Internet-based. Just because VCs like to see a potential for the business to grow (to $100M) and get back an ROI of 3x doesn’t mean a smaller business on the Internet is non-scalable. Hence, Steve Blank’s definitions are biased (shaped by a Silicon Valley VC view). What’s to say you can’t have a privately held company with zero VC investment grow to $50M (from sub-VC investors in the pyramid) that end up churning out fantastic dividends to the shareholders? Besides, with cloud computing platforms rapidly evolving and becoming a reality for a lot of developers, a small business can be instantly scalable and Amazon would argue “elastically” so. The cloud is the new Silicon Valley, and don’t discount the attractiveness of dividends especially with the tides having turned in the larger picture (i.e., Ben Bernanke warning U.S. Congress time and again of unsustainable debt, Nassim Taleb warning of the same thing and of forthcoming austerity in many parts of the developing world)! note: take “Internet” out of the picture and scalability takes on a different meaning for example the green tech / energy stuff that Bill Joy, John Doerr are interested in, scaling those types of businesses takes massive amounts of capital that not even a single VC like Kleiner can handle on their own in most cases.

By: artvankilmer

artvankilmer — Fri, 11 Jun 2010 08:26:36 +0000

Great title but an even better post. I’d love to learn more about what we in Silicon Valley have in common with the other types of entrepreneurs, outside of the high tech echo chamber.

By: Top Posts — WordPress.com

Top Posts — WordPress.com — Fri, 11 Jun 2010 00:19:19 +0000

[...] You’re Not a Real Entrepreneur Who is an entrepreneur really? It turns out that there are four distinct types of entrepreneurial organizations; small [...] [...]

By: Jonathan Jaeger

Jonathan Jaeger — Thu, 10 Jun 2010 20:36:32 +0000

Nice post. People seem to have different notions about what true entrepreneurship is. I guess that’s why Jason Fried and DHH prefer the term “starter” to entrepreneur. Of course, saying you’re an entrepreneur is a lot more fun and feels better than calling yourself a starter.

By: Joe Agliozzo

Joe Agliozzo — Thu, 10 Jun 2010 19:08:24 +0000

Mathew – I think many small businesses can grow into a “get rich” business (as opposed to just pay the bills) without VC – it just takes the right business model and patience (also depends on your definition of rich – $10M vs $100M).

1. Try to design the biz so it’s capital efficient – example, Dell Computers – when started (and even today) most customers paid before the components were purchased and assembled, so you did not need more working capital to grow the business, in fact increasing customer orders financed the growth of the business;

2. Use Steve’s customer development principles – find a business model before you invest significant money – again part of being capital efficient;

3. If you are successful at 1. and 2. above and have a replicable, profitable business model, it’s likely you then have all sorts of financing options available to you (including organic growth) – bank debt, lines of credit, private placement of minority stake in the company, strategic investor, etc. and can avoid many of the negatives (real and or perceived) of VC.

4. I hope Steve will talk more about this, because I see a definite “gap” between traditional small businesses (lifestyle) and standard venture backed “scalable” businesses. I think technology (the ‘net) and it’s inherent capital efficiencies make this new type of business more achievable to more entrepreneurs.

By: Salman

Salman — Thu, 10 Jun 2010 18:30:37 +0000

Steve, great post as always. I loved the matrix at the end!

By: Haim

Haim — Thu, 10 Jun 2010 18:28:11 +0000

I think it helps to think of entrepreneurship not as a binary quality but rather a quality determined by multiple variables, primary among which is the amount of personal risk taken and the level of initiative. Surely someone like Steve’s parents, putting their life’s savings and the future of their family on the line risked a lot more than Don Estridge who ran the PC group for IBM. His and his family’s future was practically guaranteed by IBM’s full employment policy at the time. We don’t even know if IBM getting into the PC business was his idea or whether he was tapped for the job.

Between the two, who scores higher on the entrepreneurial scale?