A fun aspect of entrepreneurship is the diversity of people that you meet and the variety of ways that people have gotten to where they are. There isn’t one single formula on how it is done, which makes the journey that more exciting. Some start as salespeople, some investors, some from other failed or successful ventures. Since nearly everyone has become an entrepreneur, similar to how nearly everyone in Los Angeles is an actor, I’ve noticed, through the “coffee-having,” “brain-picking,” “introduce-me-to-investors-please,” meetings that as diverse as they are, entrepreneurs fall into the same few buckets.
The Sales Person: This type of business-minded entrepreneur could sell ice to Eskimos. In prior years they had a top tier MBA and / or did two years in a banking or consulting analyst program. Usually the businesses that this person starts arise from the need to solve a problem, which they themselves experienced. They have the right Rolodex for early customers and given their finance background could probably raise a small seed round. They have the skills to create a great PowerPoint deck and a sturdy dynamic Excel financial model. On the marketing front, they also understand the customer acquisition funnel from digital search mechanisms like Google to Facebook to Cooperatize to broader branding mechanics like content marketing and PR. Steve Jobs and Mike Bloomberg come to mind as “sales” entrepreneurs.
PROS:
— Business focused; investors feel somewhat comfortable that they’ll know how to get their money out
— Domain knowledge; they are solving a problem that they themselves encountered and are now coming up with solutions using technology
— Financial connections to raise seed capital
Despite these great characteristics, I’ve sometimes noticed that technology is sometimes a foreign concept. As a worst case, they treat their developers like “code monkeys.” This lack of understanding sometimes causes tensions between this entrepreneur and their technical counterparts. If they are waving around their deck and model and describe themselves as the “idea” person, developers and investors are less likely to believe in their ability to execute. Selling their skills to “technical co-founders” also is difficult when they try and make the argument that once the product is made they can raise the capital. (The developer takes the bulk of the risk by building the product for equity and then realizing that some of the original business assumptions were flawed.) Understanding this chicken or egg problem, some sales types get around this by getting a prototype built on a site like Elance or even taking a class on Code Academy.
CONS:
— Difficult to pivot into another business
— Must depend on a technical resource
— Technology is sometimes a foreign concept; can they receive the needed respect from developers?
The Hacker: This type of entrepreneur is usually a self taught engineer, but immersed in “hacker culture” and “Minimum Viable Products.” They are up to speed on the latest releases of Rails and the new Javascript frameworks, like Angular, Ember and Backbone. They are more likely to want to build neat interesting things that people would use rather than build something to make money, since freelance opportunities are not scarce for folks with their skill set. Some like Wikipedia and Craigslist have decimated industries while retaining little of that for themselves. While many tools out there get minimal usage some are game changers and thus Silicon Valley investors swoon at these young, sometimes naïve, hackers. The Wozniaks and Zuckerbergs came from this class of entrepreneur; although “Zuck” may have moved into the next category.
PROS:
— Can build product from day one
— Pivot easily without need to re-scope a project
— Clout in tech community and ability to build a technology team
While every company needs engineers early in the process, sometimes these engineers / hackers miss business opportunities; i.e. Friendster was the early pre-cursor to Facebook. Further, outside of technology tools like Github, Heroku, and MongoDB, initial customers in other industries might be a challenge to find and to know what their initial pain is. As some have found, like Wikipedia and Craigslist (until recently), some of these sites don’t make or want to make any money. Advertising is not the answer to every site’s cash flow problems and sometimes it comes as a hard lesson to the entrepreneurs. Can the entrepreneur see the big picture? Some, like Steve Wozniak, want to stay a “tinkerer.” Can the founder build a team around his / her vision and more importantly can the founder communicate his or her vision?
CONS:
— Business savvy or lack of? (This could be a pro too.)
— Can you get the initial customers? Do you have domain expertise? (Outside of the technology domain)
— Can you make it into a real business? (Advertising cannot support every app or site on the Internet.)
— Can you see beyond the weeds and into the trees? (Big picture thinking?)
The Jack-of-All-Trades: With the world’s collective knowledge at our fingertips, a new breed of entrepreneur is arising: The “Whatever it Takes” entrepreneur. This entrepreneur utilizes Lean Startup Methodology, Google, Social Media, Amazon, Stack Overflow and Wikipedia to their advantage, along with inexpensive services like Pitchpigeon, Validat.io and HelpaReporterOut.com (HARO). “No technical co-founder?” No problem, everything you need to know is online. Code might not be compliant, marketing might not follow frameworks, and financial models may be missing IRR calculations, but these entrepreneurs can get things done and if the business shows traction, determine which resources they need to build the business. By understanding each aspect of the business and understanding themselves and what they can and cannot do, they can subsist long without capital. Jeff Bezos, a Princeton computer science grad, might be a “Jack.”
PROS:
— Can build product from day one
— Can sell product from day one
— Save money on resources
“Sometimes just because you can do something doesn’t mean that you should do it.” The entrepreneur’s dilemma is the ability to say no. With the ability to do everything, it’s hard to let go of some aspects of the business that they once had complete control over and relinquish that to someone else; even if they believe that they can do it better. After all, no one can be a master at everything. Software hackers that double up as CEO’s also have difficulty with scope shifting. As mentioned about the Hacker, scope shifting takes its toll on one’s brain and on one’s time. There are some Jacks that write code for a week, take the weekend off, and then come back as CEO the following week. And finally, through working sometimes four different jobs, the Jack suffers from basically burning out. And that’s a tough place to come back from.
CONS:
— Difficulty of scope shifting — takes time to go from 30,000 ft to the ground and back again
— Risk of burn out; being responsible for too much
— Hard to delegate to others
— Mediocre product / Mediocre sales effort
Now what kind of entrepreneur are you? The best teams have an all around combination of all of these folks: sales people, CEO’s, rainmakers; hackers, geniuses, engineers; product developers, sales engineers, and creative types. Each company needs all of these pieces; it’s all just a matter of where you start.