Entrepreneurs turn bold ideas into reality. They create jobs and contribute to the economy but there are different types of entrepreneurs and each type tends to choose their own path based on their personality, abilities and surroundings.
The types of entrepreneurs vary depending on background, country and even sector but the 5 most common types are:
Each of these different types of entrepreneurs has their own rules for success in business but most entrepreneurs go through very similar struggles in terms of finance, marketing, people and even managing themselves. Because of this, we have created the Lonely Entrepreneur community to guide you with the coaching, knowledge, community, support, and tools you need to thrive.
If you ever wondered which qualities an entrepreneur needs in order to be successful we break down all the types and explain potentially which category you may fall into.
What Type of Entrepreneur Are You?
When we talked about entrepreneur characteristics in our previous post, we highlighted how entrepreneurs need passion, grit and a lot of self-confidence to be successful in business.
To be a successful entrepreneur you also have to think differently and make the right decisions like knowing when and how to find business mentors, sell their products online, train your staff and communicate effectively.
Understanding which type of entrepreneur you are – and are not – can often lend insight into the things you will be good at, not good at and how to bring your idea to life.
The 5 Types of Entrepreneurs
Let’s take a look at some different types of entrepreneurs, their roles, and how each type affects the success of the business:
Innovators are the types of entrepreneurs who come up with completely new ideas and turn them into viable businesses.
In most cases, these entrepreneurs change the way people think about and do things. Such entrepreneurs tend to be extremely passionate and obsessive, deriving their motivation from the unique nature of their business idea.
Innovative entrepreneurs also find new ways to market their products by choosing product differentiation strategies that make their company stand out from the crowd. And sometimes it is not just standing out from the crowd but actually creating a new crowd.
To say that innovators like Steve Jobs, Larry Page of Google and Microsoft founder Bill Gates were obsessed with their business would be an understatement.
Advantages of Being An Innovate Entrepreneur:
- Get all the glory for the success of the business (and take all the arrows)
- Create the rules
- Face minimal competition during the initial days
Disadvantages of Being An Innovate Entrepreneur:
- You will need a lot of capital to bring a new idea to life
- Often face resistance from shareholders
- The timeframe for success is longer
The ability of an innovative entrepreneur to envision a new way of thinking makes them stand out from the crowd and wildly successful in many cases however it takes significant capital, patience and commitment to bring true innovation to life.
2. The Hustler Entrepreneur
Unlike innovators whose vision is the gas in their engine, hustlers just work harder and are willing to get their hands dirty. Hustlers often start small and think about effort – as opposed to raising capital to grow their businesses. These types of entrepreneurs focus on starting small with the goal of becoming bigger in the future.
Hustlers are motivated by their dreams and will work extremely hard to achieve them. They tend to be very focused and will get rid of all forms of distractions, favoring risks over short-term comfort.
A perfect example of a hustler is Mark Cuban. He started in business very young selling trash bags, newspapers and even postage stamps and this hustle later created a goldmine which was acquired by internet giant Yahoo!
Advantages of Being A Hustler
- They will outwork most
- Tend to have thick skin – they don’t give up easily
- See disappointment and rejection as just a step in the process
Disadvantages of Being A Hustler
- Usually prone to burn out
- Wear out their team members who don’t have the same work ethic
- Often don’t see the value of raising capital as opposed to just working harder
Even though many hustlers never give up, a lot of them are willing to try anything to succeed which unfortunately means that they have a lot of hits and misses. Achieving their dreams takes a lot longer than most other types of entrepreneurs.
Imitators are the types of entrepreneurs who copy certain business ideas and improve upon them. They are always looking for ways to make a particular product better so as to gain an upper hand in the market.
Imitators are part innovators and part hustlers who don’t stick to the terms set by other people and have a lot of self-confidence.
Advantages of Imitators
- Refining a business idea is easier and less stressful
- You can easily benchmark your performance with the original idea
- Can learn and avoid mistakes that were made by the originator
Disadvantages of Imitators
- Their ideas are always compared to the original idea
- Always have to play catch-up
Taking an existing idea and refining and improving it can be a great way to develop a business. It certainly does not have as much risk as the innovator but it might just not be as sexy.
Even after having an idea, researchers will take their time to gather all the relevant information about it. To them, failure is not an option because they have analyzed the idea from all angles.
Researcher entrepreneurs usually believe in starting a business that has high chances of succeeding because they have put in detailed work to understand all aspects.
As a result, these types of entrepreneurs usually take a lot of time to launch products to make decisions because they need the foundation of deep understanding. These entrepreneurs rely much more on data and facts than instincts and intuition.
For a researcher, there should be no room for making mistakes.
Advantages of Being a Researcher Entrepreneur
- Plan for as many contingencies as possible
- Write detailed, well-thought-out business and financial plans
- Focus on data and information rather than gut feeling
- Won’t start unless they feel like they know the market
- Will minimize the chances of failing in the business
Disadvantages of Being a Researcher Entrepreneur
- Typically moves slow
- Doesn’t like risk and that can hamper progress in a new venture
Even though these types of entrepreneurs spend a lot of time researching and digging into the data to ensure the success of their business, they can fall into the habit of obsessing over the numbers and focusing less on the running of the business.
Jeff Bezos has spoken against this in a recent letter to shareholders where he asserted that “Most decisions should probably be made with somewhere around 70% of the information you wish you had”.
One thing that defines buyers is their wealth. These types of entrepreneurs have the money and specialize in buying promising businesses.
Buyer entrepreneurs will identify a business and assess its viability, proceed to acquire it and find the most suitable person to run and grow it.
Advantages of being a Buyer
- Buying an already established venture is less risky
- Doesn’t have to worry so much about innovation
- Can focus on building on something that has already gone through building a foundation
- Already has a market for your products
Disadvantages of being a Buyer
- Usually pays a high price for good businesses
- Will face the risk of buying businesses that have problems that you think you can turn around