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Types of entrepreneurship – 4 categories of entrepreneur

types of entrepreneur

Just like there is no standard process for becoming an entrepreneur, there is no set or standard way to distinguish different styles of entrepreneurship. In this blog post, we will look at how best-selling author Ryan Levesque breaks down the types of entrepreneurship in his book – Choose: The Single Most Important Decision Before Starting Your Business. There are many different ways to segment entrepreneurs, but Ryan Levesque’s method looks at the motivation and the mindset of business owners.

1. The mission-based entrepreneur

The mission-based entrepreneur is inspired by a specific cause. An example that is used in the book is Christy Kennedy. She had a child in school who was autistic and endured bullying from other children nearly every day. She set about doing what she could and developing a program to eliminate bullying from her son’s school. It was so successful that she was invited to help the school district and then the entire state to help stop bullying from their schools.

Typically, a mission-based entrepreneur may be trying to eliminate a negative behavior or promote a positive one. They could also be looking to develop technology that might help with a noble cause too. For example, a developer or inventor who creates a specialized boat to clean the ocean might be seen as a mission-based entrepreneur. His or her mission is to clean the oceans and save animal life.

A drawback to a mission-based business is that it can struggle to make money. They are so drawn to the mission that they might never consider how profitable a business can be or what they can do to make more money. The problem is that without an income stream, many mission-based entrepreneurs might have to give up on their mission. Nikola Tesla could perhaps have been described as a mission-based entrepreneur, but he did not have a mind for business and run out of money when trying to build his Wardenclyffe Tower in the early 1900s. Tesla had torn up a royalty contract that would have given him millions just a few years before (more information here).

2. The passion-based entrepreneur 

This type of entrepreneur will often start a business related to something they love, like a hobby or a past-time that they would do for free. They ultimately want to transform that past-time that they are passionate about into a full-time job. 

An example might be a yoga teacher who took up yoga to deal with stress or a nutritionist who loves to cook. An example used in the book is a man called Charlie Wallace who is in a rock band. He started teaching people how to play guitar online to make a bit of extra money. He ended up making over a million dollars in a year from teaching people how to play guitar.

Whereas it’s more typical for a mission-based entrepreneur to stop something negative or move people away from harmful behavior, passion-based entrepreneurs move people towards something they love.

The risk with passion-based entrepreneurship is that you do it so often that you lose your passion. You may also have to change the way you approach your passion for it to become profitable. For example, you may love writing, but then work as a freelancer for a newspaper that wants you to write specific stories that you feel are unethical.

3. The opportunity-based entrepreneur

Opportunity-based entrepreneurs will see a gap in the market. They will have a problem or see a problem that others have and come up with solutions that nobody has created yet.

The opportunity-based entrepreneur can often be highly successful but can sometimes look back and feel like they’ve made money but not found their “calling” in life. Unlike the mission-based and passion-based entrepreneurs, there is less chance of feeling good, proud, or emotionally satisfied with the work you’ve done.

4. The undecided entrepreneur

This is somebody that loves the idea of working for him or herself. They know that they want to start a business, but they don’t know what that would be. 

The author suggests that these people should start what he calls a “practice business.” The analogy used to make this idea relatable is to think of the car that you first drove. It probably wasn’t your dream car or even a good car in terms of its reliability and performance, but you took the skill and ability to drive from that car to higher-performing ones in the future. The practice business, which will cost little or nothing to set up, will hopefully provide you with the skills you can take into future business, with more time, effort, and perhaps money invested.

The danger of being an undecided entrepreneur can be indecisiveness. The undecided entrepreneur should make sure that they make a logical, data-driven decision but then commit fully to one idea at a time. In fact, the undecided entrepreneur may never become an entrepreneur at all, as they will never commit to one idea.

 

Conclusion

There is no best way to set about becoming an entrepreneur and starting your own business. However, if we go by Ryan Levesque’s book, it can certainly help to determine your motives and be aware of any drawbacks that may relate to your motives and category of entrepreneurship.

 

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