There Are Four Types of Entrepreneurs

Written by on Apr 28 2016

In the history of the world there have only ever been four types of entrepreneurs (if you can think of any I’ve missed please leave a comment):

The Builder/Craftsperson/Specialized Skills

This is someone who can make something (often something beautiful) AND can get someone else to pay for it. Historically these people have been tradesmen who, after an apprenticeship, strike out on their own. They might have been blacksmiths, bakers, or even a farmer who can buy her own land. This might be a someone who does lawn care, pool maintenance, or repairs cars. This is probably who you are if you are a developer or designer who convinces someone to pay for your own software, content, or talents.

The Renter

This is someone who has bought something useful and rents it to people for short term use. They might rent out a taxi or ferry ride, a pavilion to host a wedding reception, or just a lawn mower.

The Manager

This is a person who’s biggest skill is in finding something people want to buy and hiring people to do the work to make that thing or provide that service. A Manager might have started out as a builder, but they made their fortune in an area where they don’t have particular expertise. Oliver Winchester is a great example of a Manager. He could not sit down at lathe and craft a rifle, but he could buy a failing Volcanic Repeating Arms Company, and turn it into one of the world’s leading arms manufacturers. A Manager understands business, markets, how to make money, and discipline in business (when was the last time you looked at your budget, your per-project budgets, which subscription plan is the most profitable when support costs are taken into consideration, what your profit margin is, what are the main factors that influence LTV in your business, how much does it cost you to acquire a customer, what are the top three reasons you lose customers, etc).

The Wanna Be

This is a person who is either

  • (A) a Builder or Renter who can’t convince enough people to pay him, or..
  • (B) someone who thinks they are a Manager, but has never made any money.

A Builder or Renter who barely covers their own expenses year after year doesn’t count as a Wanna Be, these are what most small business are, and they are noble businesses. But if spend most of your time trying to get people to give you money because they should believe in you, you are a Wanna Be. If you spend most of your time not knowing why you can’t get your ideas implemented and released on time and on budget (and you’re losing money), you’re a Wanna Be. If you’re too concerned about what people will think of you to ask for help (and you’re losing money), you’re a Wanna Be. If you’re scared shitless reading this paragraph, you might just be a Wanna Be.

Looking at it from this perspective it becomes clear why so many of us Builders are not becoming hugely successful: We simply lack the skills of a Manager and it’s these skills that make businesses grow. If your solution to acquiring new customers or reducing churn is almost always “let’s build another feature,” “It’s time for a redesign,” or “I can make the UI better,” then you fall into this category.

But now that you know the problem, the solution is clear: You need a Manager. Either you must learn those skills, that’s what Mark Cuban did, or you can hire someone to run your company. But every very successful, growing company has a Manager.

If you are a small or one person shop (Builder or Renter) and you’re paying your bills and have a happy life, you don’t need a Manager, you are living the dream.

If you’re a Wanna Be, there’s hope. First of all quit. Stop pretending to be a Manager and either learn how to build something and build it, or go get some experience (school, apprenticeship, job) where you can learn how to be a great Manager. You have to decide if it’s more important to you that (A) you believe people are thinking good things about you (you don’t know what we say about you behind your back), or (B) to actually become great.


For all you Wanna Be’s who I love and care about, this one goes out to you:


Hi I'm Steven,

I wrote the article you're reading... I lead the developers, write music, used to race motorcycles, and help clients find the right features to build on their product.

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