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MY ENTREPRENEURIAL ROLE

Being an entrepreneur is about creating something new, moving into the unknown and maybe starting on projects where you can really foresee neither the outcome nor the financing. Many ‘self-employed’ people are ‘entrepreneurs’, but you may be one without being the other. For instance, a self-employed dentist is probably not an entrepreneur, and someone running a wild new project within Google might work as an entrepreneur but not be self-employed.

We believe it is important for anyone who has a dream of becoming an entrepreneur to understand which entrepreneurial roles exist and what they entail. In this chapter, we study various entrepreneurial roles and personal traits that increase the likelihood of success with start-up projects. We also consider the risks and benefits that are likely to occur when selecting the entrepreneurial life.

‘I want to become an entrepreneur.’ That's what both of us would say often when we were young students.

But what does that mean? When we were 15 or 18, we thought it meant only one thing: getting a brilliant idea and starting a company to pursue it. However, life has since taught us that there are many other ways to be an entrepreneur. And while there are many ‘hows’, there are also many ‘whys’, so let's start with those.

Why do people become entrepreneurs?

Statistics show that most entrepreneurs are highly motivated by:

• money: hoping to achieve financial freedom
• freedom: hoping to gain control over their lives and work.1

But there may be many other motives. For instance, quite a few people start their business as a result of frustration in their former job. Perhaps they were irritated by stupid bosses or unambitious co-workers. Possibly they felt that they didn't fit into the ‘system’ and were fired for exactly that reason.

For some entrepreneurs, the decision to start their company was a matter of self-image. Where their parents perhaps dreamed of owning a house, the next generation can dream of getting their feet underneath their own table.

Others may be primarily driven by a passion for motivating co-workers, or for delivering excellent products to the clients, working with cutting-edge technologies or trendy new styles.

There may also be more professional motives. Entrepreneurial work is very all-round and therefore offers a high degree of responsibility and a palette of different challenges that is almost impossible to find in normal jobs. An entrepreneur in the early stages can thus be sales, marketing, product and HR manager at once. Some will find this extremely stressful, but others – great entrepreneurs – will find it extremely fun. Some would also like to sit at the top of the pyramid and feel that the way to the top seat is shorter if they create the company themselves.

Some are attracted to the challenge and hardship – they almost regard entrepreneurship as a sport, if not a test of manhood (this includes women). These are the people who love to test themselves and find out where their limit is. ‘How far can I go?’ they might think. Let's face it: there are probably some adrenaline junkies among entrepreneurs, though others might rather end up as hobbits on their reluctant way to Mordor.

What kind of entrepreneur?

If you recognize yourself in any of these roles, the next question is: what kind of entrepreneur do you want to be?

In many people's imagination – and in our own, too, when we were younger – it is probably quite simple. You get a brilliant idea in the shower one morning. ‘Bingo!’ There it was! Then you persuade a bank to lend you a few million. A few years and a lot of work later you sell the company. And then … off south to the beaches!

Now we have become older, but none of us has seen such a course of events. Why not? First, brilliant ideas rarely arise out of the blue and in an instant. They evolve over time, in fits and starts. Second, a bank will not lend you money to implement your idea unless you pledge full collateral for it. Because why should they? To potentially earn 5% interest but risking a 100% loss if the company goes down, as it very well might? And third, we have never known entrepreneurs that settled themselves on a beach after they sold their first company. Maybe it happens every now and then, but as far as we can see, the typical successful entrepreneur loves work and immediately starts the next project as soon as there is time available.

What if I want to become an entrepreneur but lack the great idea?

Start-ups with great ideas need all kinds of profiles early on. Perhaps you are not the idea man but still have the passion to pursue the entrepreneur life. All start-ups are looking for help and resources and appreciate any approaches they receive. And lots of people have become entrepreneurs by joining others’ start-up projects early on.

It has become easier!

For sure, being an entrepreneur is typically very hard, but in our opinion, conditions for entrepreneurs have improved in important ways in recent decades. It has become a lot cheaper and technically easier to start new companies. Certainly, the amount of red tape may have increased, but overall costs of setting up a basic operation have dropped massively. For instance, software and hardware have become significantly cheaper, as have flights, and you can now use video conferencing free of cost. Furthermore, there is access to plug-and-play tools, cloud computing, crowdsourcing, focused and thus inexpensive advertising opportunities, global payment systems, effective logistics services, smartphones, tablets, etc., all of which are easy and inexpensive to use. Therefore, a lot that was previously expensive and cumbersome can now be dealt with cheap or for free. Overall, we believe that with the exception of salaries, running costs for many types of start-up have declined by as much as 90% over the past two decades.

Moreover, network effects sometimes can help start-ups to create huge value very quickly. In the entrepreneurial environment, the word ‘unicorn’ is used to describe companies which achieve a market value of more than $1 billion. In the 1990s and earlier, it took typically at least 20 years for the greatest winners to get there, but since then it has gone ever faster – Airbnb, for example, did it in less than five years, Snapchat within a year and a half and Slack within just nine months.

It has thus become a lot cheaper and technically easier to start companies.

Another advantage for modern-day entrepreneurs: today there exist several great online networks for entrepreneurs in all developed nations, such as Young Upstarts, Sandbox, Fast Company and YourStory. Here you can regularly seek advice and inspiration as well as find useful contacts. Appendix D contains a list of 76 of the best in the English language.

In addition, many new businesses manage to create large companies without having to invest much in equipment or production. As often pointed out, the world's largest property landlord, Airbnb, owns no hotels. Facebook, which is the world's largest media company by far, has no production of media content, and Uber, the world's largest taxi company, owns no cars. Therefore, they have been able to expand incredibly quickly.

So yes, in many ways it has become cheaper and easier to be an entrepreneur, even if taxation and legal tangle might have pulled the other way.

All of this, plus a new set of management tools called ‘lean start-up’, has contributed to a significant change in the entrepreneurial landscape. We see ever more ‘micro-multinationals’, which are global companies with limited staff and investment needs. And the fact that you can now start a company for less money means that investors such as venture capitalists (s) can spread their investments across multiple projects – some of them leaning towards the ‘spray and pray’ principle in which they invest small amounts in many start-ups. Finally, even on the funding and exit side, there is significant innovation, where the recent development of s (initial coin offerings) is a prominent, if at times problematic, example.

Lifestyle or growth entrepreneur?

You can divide entrepreneurs into two main types. The first are lifestyle entrepreneurs. They are the ones who found and run, for example, a restaurant, a paint shop or a dental clinic. For sure, being a lifestyle entrepreneur requires some risk taking and typically a lot of work and determination, but it does not necessarily require great creativity (nor does it exclude it either, of course). But it is characterized by a limited growth ambition.

VCs typically don't invest in lifestyle entrepreneurships, since the profit potential is often quite limited and the founders are rarely interested in selling the company and therefore are not able to provide a reasonable return to foreign investors either. Also, lifestyle entrepreneurships are often related to some single person's unique skill or talent, which adds to the risk for an investor.

The second category are growth entrepreneurs. They are the ones who get their project to multiply or ‘scale’, as people in the industry often call it. If your restaurant is the first...