One of the most detrimental things that has happened to entrepreneurship, has been the less educated government official/academic/consultant/whatever, who has used these interchangeably.
They are not the same thing, and consequently whereas in the past large companies wanted to become more entrepreneurial and dubbed it intrapreneurial, today they want to be more innovative. Entrepreneur has lot its allure, and no pun is intended.
An academic author named Burch created a model for the entrepreurial continuum. I have since modified it and am still refining it, but it is still worth looking at, in an attempt to try get people to understand that entrepreneur and SME are not the one and the same. Readers can request and receive both Burch and my version my emailing me on email@example.com
The key however, is that there are different types of “entrepreneur”, many of which are not entrepreneurial. According to my modified Burch, I believe that only once they reach franchisor level do they begin to become opportunity aware. I have listed the different ones below with some key characteristics.
1. Survivalist – uneducated, unskilled – resorts to selling sweets cooldrinks vegetables, bread ie. Basics and often found in poor developing countries. Do not perceive themselves as entrepreneurs.
2. Salary replacement entrepreneur – either retrenched, fired or similar, so therefore often semi skilled or skilled or educated. Starts or buys a business based purely on its ability to replace the salary he lost. Do not perceive themselves as entrepreneurs.
3. Lifestyle entrepreneur – starts as a salary replacement entrepreneur. However, “by accident and with little effort” finds that very little additional effort generates an increase in income. Then uses this income to buy toys - boats, vacation homes, motorbikes, sports cars. Never wants to earn more than to be able to afford the toys. Seldom move beyond this point. Do perceive themselves as entrepreneurs, but they are not. Large egos.
4. Small business manager/franchisee – to be really entrepreneurial, strategy and marketing are key skills for the entrepreneur. This level of entrepreneurship, as do the previously described ones, lack these skills. They have the skills and/or education to manage but do not look for opportunities beyond the initial franchise. Some of these do end up very wealthy and do become entrepreneurial to the extent of becoming portfolio entrepreneurs, but they are few and far between. Do perceive themselves as entrepreneurs.
5. Copycat entrepreneur – entrepreneurial to a degree but looks for others to lead and then follows closely behind. Not good at been innovative and creating opportunities or identifying real opportunities. Do perceive themselves as entrepreneurs.
6. Franchisor – Once again entrepreneurial to a fairly large degree but seldom looks for other opportunities beyond the initial franchise created. If they do they tend to stay within a similar area of expertise eg fast food Do perceive themselves as entrepreneurs..
7. Inventrepreneur – these people are your inventors and innovators. Always looking at everything trying to make it better. They create their own opportunities despite a fairly high failure rate, particularly in the early days; Often lack business skills but understand things at a user level and what the user wants. See themselves as inventors rather than entrepreneurs.
8. Serial entrepreneur – always looking for opportunities. Start and sell or buy and sell businesses regularly, but never own more than one at a time. Very hands on.
9. Portfolio entrepreneur - always looking for opportunities. Start and sell or buy and sell businesses regularly. Own more than one at a time. Very hands off. Employs managers or partners. Have more time available and become a lot more opportunity aware and this opportunity awareness increases as they spend more time strategising.
10. Angel funder – very entrepreneurial but not very opportunity aware. Often focus on certain key industry sectors. Similar to portfolio entrepreneur but they often are funding other businesses as part of a group of funders to reduce risk. They do not look for opportunities but rather become more adept at evaluating opportunities presented by entrepreneurs seeking funding.
11. Venture capitalist – very entrepreneurial but not very opportunity aware. Often focus on certain key industry sectors. Similar to portfolio entrepreneur except they are looking to create large enterprises. They do not look for opportunities but rather become more adept at evaluating opportunities presented by entrepreneurs seeking funding.
Regards Rob Smorfitt