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Three Types of Entrepreneurs

There are three types of entrepreneurs – Misfits, Celebrities and Naivetes.

Misfits cannot work for any company. Fundamentally not hire-able. They’re smart, opinionated, no-BS, adament, sometimes arrogant. They’ll bootstrap. They’ll wash cars to sustain while they build their business. They see building a business as the only way to survive. They’ll resist taking investor money – they’d rather grow slowly the way they want than take money and compromise. Its about proving themselves, freedom from BS, soul search.

Celebrities have a good career in general. They’re smart, have had a good ride, doing well in general, play along well. They usually know something about their industry that others don’t. They’ll raise money early. They have an idea sure, but they start companies because they can raise money. Usually with good terms. Investors bet on them because why not. Success = acquisition or IPO. Failure = acqui-hire most likely. So why not. They’ll want to discover something quick, grow fast, and exit. If things don’t go well, they give up. They’re not going to spend 10 years building a company unless things go well – opportunity cost is high.

Naivetes are everyone else. They’re smart, maybe in college or just out of college, read TechCrunch a lot, watch a lot of Steve Jobs. The day they can hack up an iPhone app, they’ll want to start a company. They think they are passionate about something, usually a cool thing. They’ll build and patiently wait for users. They’ll say growth trumps revenue because they don’t have the faintest clue how to get people to pay for something. They’ll keep writing lots of code. No one knows where they’ll end up. But they may become the next billion $ company.

All of them have the same probabilty of 1% success. Misfits will fight till the last drop of blood. Celebrities will stop at some point and move on. Naivetes will never know when to give up.

Regardless of what type of entrepreneur you are, I salute you — for risking your life to do something, for being stupid and not feeling stupid about it.

  • OP, that is the worst generalization ever. You can not just lump entrepreneurship into three categories. I appreciate that you salute us but seriously. The misfit … could be in that situation because they do not have the connections to find an investor. Or they could be where they are located that the region does not have the funds, or the investors are not interested in risking funds for a new innovative venture that they can not use other market analytics to back since its a new field. Or they are new and are learning.

    The celebrity could know the field really well and has a lucky break thorough a random connection. Or It could be because it is their 6th venture and learned what to do and not to do but never told anyone about the 6 previous venturers that failed.

    As for the Naivetes everyone is one at one point. You are not born an entrepreneur you become a good one through trial and error.

    My biggest issue with all of this stuff is that entrepreneurship is doing something new that has not existed before. The idea that their are formulas, generalizations, or types of personalities you should be, or that you need to x to do y to then get z is just a load of BS.

    Trying to classify an entrepreneur is setting restrictions that prevent an entrepreneur from success. There is only one classification you are either an entrepreneur or you are not. What you are referring to are management styles.

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  • Watch long enough, and patterns emerge. From a 20+ year participant-observer’s perspective, these three categories are pretty accurate in terms of what the author’s attempting to communicate. There may be a few more basic buckets, but I don’t think the point is that you have to be a certain way or fit into some mold; the point seems to be that we’re all shooting for the moon, regardless of how we define the mission or frame the odds to ourselves.

    Also, there seems to be some kind of “don’t generalize me, dude” trend percolating in the interwebnets of late; but good generalizations, forged through experience and observation, are both valid and useful, because they’re patterns that can act as scaffolding to solve problems and meet human needs, especially at global scale. Just a thought.

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  • Terrific job nailing 3 basic categories. Nothing wrong with identifying trends and generalizing — you’re not stereotyping people, just their efforts. Personally, I’m a Misfit (esp when I started), but think I crossed over into Celebrity when I raised $25m. Now I’m probably edging toward Naivete as I start a new business and see all the fast money being thrown around (again). Point is that Entrepreneurs “Improvise, Adapt and Overcome” (Eastwood) in the the pursuit of the American Dream.

    Your story helps people define and articulate what we are innately trying to achieve. Thank you.

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