- Being an entrepreneur comes with social status. Entrepreneurs make stuff. They’re talented. They think differently.
- Serial entrepreneur and startup guru Steve Blank says entrepreneurs are resilient, agile, tenacious, and passionate.
- Business Insider spoke with Blank about his five basic categories, and how to know which one (or more) applies to you.
- Visit BI Prime for more stories.
Entrepreneurs are everywhere.
They come from all walks of life, and sometimes it can seem as though everyone is calling themselves an entrepreneur.
Serial entrepreneur and startup guru Steve Blank says all entrepreneurs have four things in common: they’re resilient, agile, tenacious, and passionate.
Blank is a Silicon Valley legend who has over 40 years’ experience on the subject. He has launched eight companies (most notably E.piphany, which developed customer-relationship-management software) and written four books, including “The Four Steps to the Epiphany” and “The Startup Owner’s Manual.”
Ten years ago, Blank revolutionized how the business world thought about startups when he created the Lean Startup methodology with Eric Ries and Alex Osterwalder, and he has since mentored numerous founders as an investor and advisor.
“The big insight [of Lean] was that startups aren’t just small versions of large companies,” he told Business Insider in an interview. “Large companies execute a known business model.”
“The Lean Startup was the first tool to search for business models,” he added.
Today, Blank teaches those tools to undergraduate and graduate students at Stanford, UC Berkeley, Columbia, and NYU, and he says his approach is useful to any founder, whether they’re starting a local business or the next tech unicorn.
Business Insider spoke with Blank about what it takes to be an entrepreneur, and he said that while they have a lot in common, they tend to fall into five basic categories: lifestyle, Main Street, venture startup, corporate, and social.
Here’s how to know which one (or more) of the categories applies to you, based on your personal risks and financial goals.
Lifestyle or solo-preneur
Risk: Low to moderate
Goal: Flexible work-life balance
If you started monetizing a hobby or side hustle to support a personal passion, then this is you.
Lifestyle entrepreneurs weren’t included in Blank’s original framework, but the changing relationship to work has given new shape to this group of business owners who work for themselves.
Blank used the example of someone who loves to surf, and offers surfing lessons in order to fund that lifestyle. The business here is low to moderate risk, and serves to meet flexible financial goals.
Lifestyle entrepreneurs are using online tools and platforms like Poshmark, Instagram, Etsy, Amazon, Venmo, and Square to start businesses to generate additional income at much smaller scale and at lower risk than previously possible. Some even go on to grow their operation into a more formal business.
Goal: Earn a living
If you are an employer operating a business like a restaurant, shop, or other services we rely on every day, then this is you.
Main Street entrepreneurship is where most small business owners find themselves. Blank says his parents were just this type of entrepreneur, and that these businesses undertake a high level of personal risk in order to feed their families and support their communities.
The range of business types represented in this category is extremely broad, and their growth targets generally mean the owner has to personally assume most of the risk.
At Business Insider, we commonly refer to them as “bootstrappers,” as they must rely on their own savings or credit to finance and grow their businesses.
This traditionally brick-and-mortar set of businesses are increasingly using digital channels to meet their needs, from online marketplaces to social media.
Goal: Get big, get rich
If you are a founder who is looking to get big — and do it fast — then this is you.
Rapid growth is the name of the game for these entrepreneurs, and the emphasis here is on a business model that can grow quickly.
The central challenge is to find untapped areas of high demand, and develop the products or services to capitalize on it, rather than a particular attachment to a specific product or service. Here’s where Blank’s Lean Startup methodology of concepts like pivoting and minimum viable products pack the most punch.
These entrepreneurs have grand visions that involve high risk and require a lot of money to achieve — more than can be obtained on their own — so they turn to venture capital investors.
The ultimate goal for most of these startups is to reach the public market or get acquired by a larger company. For some founders, that is their cue to exit the company with a big payday and move on to start the process all over again with a new idea.
Goal: Develop new division, get promoted
Even if you work at a large company, you may still be an entrepreneur — or as some call it “intrapreneur.”
Big businesses need new ideas to keep growing, and it’s up to their forward-thinking employees to find those opportunities.
Corporate entrepreneurs face many of the same challenges as their independent counterparts do: finding a market, getting financial support, and building a team.
Developing those skills in a lower risk environment has helped some of the individuals behind these corporate initiatives go on to start their own companies.
From the days of IBM’s Skunk Works to KPMG’s new Innovation Labs, companies from a wide range of industries are taking a cue from startup the startup world.
In fact, large organizations have become some of Blank’s most fervent Lean Startup supporters, and even the US government is using his curriculum to train teams on how to bring an entrepreneurial mindset into the development of new products and services into existing organizations.
Goal: Change society, change the world
Maximizing profits is just one of several potential business objectives. If having a social impact is more important to you than financial rewards, then this category is for you.
Blank often says that there are roughly five to 10 numbers that really matter for any business, and most companies would put profit close to the top of the list.
But for those who are looking beyond the bottom line, the skills and approaches that are often used to generate revenues can be readily applied to tackling other challenges.
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That doesn’t mean you completely eschew money — that’s still extremely important to sustaining the operation — it just means that something else matters more.
The concept of social entrepreneurship has traveled a long way over the past several years, and now has growing academic and institutional support.
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