Types of Entrepreneurs
Many Types of Entrepreneurs – Explained!
There are so many different types of entrepreneurs, it would literally be impossible to explain all of them on a single page. However, I'll go over the various types that I've had experience with over the years. These are the most common types of entrepreneurs and entrepreneurships.
Based on the Type of Business:
1. Trading Entrepreneur:
As the name itself suggests, the trading entrepreneur undertake the trading activities. They procure the finished products from the manufacturers and sell these to the customers directly or through a retailer. These serve as the middlemen as wholesalers, dealers, and retailers between the manufacturers and customers.
2. Manufacturing Entrepreneur:
The manufacturing entrepreneurs manufacture products. They identify the needs of the customers and, then, explore the resources and technology to be used to manufacture the products to satisfy the customers’ needs. In other words, the manufacturing entrepreneurs convert raw materials into finished products.
3. Agricultural Entrepreneur:
The entrepreneurs who undertake agricultural pursuits are called agricultural entrepreneurs. They cover a wide spectrum of agricultural activities like cultivation, marketing of agricultural produce, irrigation, mechanization, and technology.
Based on the Use of Technology:
1. Technical Entrepreneur:
The entrepreneurs who establish and run science and technology-based industries are called ‘technical entrepreneurs.’ Speaking alternatively, these are the entrepreneurs who make use of science and technology in their enterprises. Expectedly, they use new and innovative methods of production in their enterprises.
2. Non-Technical Entrepreneur:
Based on the use of technology, the entrepreneurs who are not technical entrepreneurs are non-technical entrepreneurs. The forte of their enterprises is not science and technology. They are concerned with the use of alternative and imitative methods of marketing and distribution strategies to make their business survive and thrive in the competitive market.
Based on Ownership:
1. Private Entrepreneur:
A private entrepreneur is one who as an individual sets up a business enterprise. He/she it’s the sole owner of the enterprise and bears the entire risk involved in it.
2. State Entrepreneur:
When the trading or industrial venture is undertaken by the State or the Government, it is called ‘state entrepreneur.’
3. Joint Entrepreneurs
When a private entrepreneur and the Government jointly run a business enterprise, it is called ‘joint entrepreneurs.’
Based on Gender:
1. Male Entrepreneurs:
When business enterprises are owned, managed, and controlled by men, these are called ‘men entrepreneurs.’
2. Female Entrepreneurs:
Women entrepreneurs are defined as the enterprises owned and controlled by a woman or women having a minimum financial interest of 51 per cent of the capital and giving at least 51 per cent of employment generated in the enterprises to women.
Based on the Size of Enterprise:
1. Small-Scale Entrepreneur:
An entrepreneur who has made investment in plant and machinery up to $150,000 is called ‘small-scale entrepreneur.’
2. Medium-Scale Entrepreneur:
The entrepreneur who has made investment in plant and machinery above $150,000 but below $650,000 is called ‘medium-scale entrepreneur.’
3. Large-Scale entrepreneur:
The entrepreneur who has made investment in plant and machinery more than $650,000 is called ‘large-scale entrepreneur.’
Based on Clarence Danhof Classification:
Clarence Danhof (1949), on the basis of his study of the American Agriculture, classified entrepreneurs in the manner that at the initial stage of economic development, entrepreneurs have less initiative and drive and as economic development proceeds, they become more innovating and enthusiastic.
Based on this, he classified entrepreneurs into four types:
These are discussed in seriatim:
1. Innovating Entrepreneurs:
Innovating entrepreneurs are those who introduce new goods, inaugurate new methods of production, discover new markets and reorganize the enterprise. It is important to note that such entrepreneurs can work only when a certain level of development is already achieved, and people look forward to change and improvement.
2. Imitative Entrepreneurs:
These are characterized by readiness to adopt successful innovations inaugurated by innovating entrepreneurs. Imitative entrepreneurs do not innovate the changes themselves, they only imitate techniques and technology innovated by others. Such types of entrepreneurs are particularly suitable for the underdeveloped regions for bringing a mushroom drive of imitation of new combinations of factors of production already available in developed regions.
3. Fabian Entrepreneurs:
Fabian entrepreneurs are characterized by very great caution and skepticism in experimenting any change in their enterprises. They imitate only when it becomes perfectly clear that failure to do so would result in a loss of the relative position in the enterprise.
4. Drone Entrepreneurs:
These are characterized by a refusal to adopt opportunities to make changes in production formula even at the cost of severely reduced returns relative to other like producers. Such entrepreneurs may even suffer from losses but they are not ready to make changes in their existing production methods.
Following are some more types of entrepreneurs listed by some other behavioral scientists:
1. Solo Operators:
These are the entrepreneurs who essentially work alone and, if needed at all, employ a few employees. In the beginning, most of the entrepreneurs start their enterprises like them.
2. Active Partners:
Active partners are those entrepreneurs who start/ carry on an enterprise as a joint venture. It is important that all of them actively participate in the operations of the business. Entrepreneurs who only contribute funds to the enterprise but do not actively participate in business activity are called simply ‘partners’.
3. Inventors:
Such entrepreneurs with their competence and inventiveness invent new products. Their basic interest lies in research and innovative activities.
4. Challengers:
These are the entrepreneurs who plunge into industry because of the challenges it presents. When one challenge seems to be met, they begin to look for new challenges.
5. Buyers:
These are those entrepreneurs who do not like to bear much risk. Hence, in order to reduce risk involved in setting up a new enterprise, they like to buy the ongoing one.
6. Life-Timers:
These entrepreneurs take business as an integral part to their life. Usually, the family enterprise and businesses which mainly depend on exercise of personal skill fall in this type/category of entrepreneurs.
7. The Hustler Entrepreneur
Unlike innovators whose vision is the gas in their engine, hustlers just work harder and are willing to get their hands dirty. Hustlers often start small and think about effort – as opposed to raising capital to grow their businesses. These types of entrepreneurs focus on starting small with the goal of becoming bigger in the future.
Hustlers are motivated by their dreams and will work extremely hard to achieve them. They tend to be very focused and will get rid of all forms of distractions, favoring risks over short-term comfort.
A perfect example of a hustler is Mark Cuban. He started in business very young selling trash bags, newspapers and even postage stamps and this hustle later created a goldmine which was acquired by internet giant Yahoo!
Advantages of Being A Hustler
- They will outwork most
- Tend to have thick skin and they don’t give up easily
- See disappointment and rejection as just a step in the process
Disadvantages of Being A Hustler
- Usually prone to burn out
- Wear out their team members who don’t have the same work ethic
- Often don’t see the value of raising capital as opposed to just working harder
Even though many hustlers never give up, a lot of them are willing to try anything to succeed which unfortunately means that they have a lot of hits and misses. Achieving their dreams takes a lot longer than most other types of entrepreneurs.
Also Mark Cuban says 'Shark Tank' showed him there are 3 types of entrepreneurs
Mark Cuban on the set of "Shark Tank"
After seeing hundreds of entrepreneurs pitch their businesses over six full seasons of "Shark Tank," Mark Cuban said there are only three primary categories they can fall into: honest entrepreneurs, arrogant ones, or scam artists.
At a "Shark Tank" a roundtable discussion hosted by Sony Pictures Television and ABC in late September to celebrate the premiere of the show's eighth season, Cuban explained that each of these types will dictate how he behaves during the pitch.
1. The Honest Entrepreneur
"There are two elements," Cuban said. "It's not just, 'Is it a good business?,' but 'Is it a good investment for us?'
That means the Sharks will see plenty of entrepreneurs they admire, but in whom they have no interest in investing. Cuban said he will be respectful to these entrepreneurs, regardless of whether he thinks they can make him money.
"And so if they're an honest entrepreneur, I know we all — except for maybe Kevin [O'Leary] — try to be very supportive. Because we know this is going to air and we're trying to send a message to everybody."
O'Leary, who is known for bullying entrepreneurs and calling them "cockroaches," explained that the reason he's so harsh is because he thinks he's doing them a service by telling them to stop wasting their time on a struggling business. If they can prove him wrong, then he's happy to hear them out. "I'm trying to test the mettle of those entrepreneurs, because if they think it's tough in the Shark Tank, wait until they get out in the real world," O'Leary once told Business Insider. "If they can't take a guy like me, then they're not ready."
At the Season 8 roundtable, fellow Shark Lori Greiner defended Cuban's position, saying that she and Cuban are aware of the children and aspiring entrepreneurs watching the show, and don't want them to see the investors picking on someone following their dream.
2. The Arrogant Entrepreneur
Sometimes an entrepreneur will speak down to the Sharks. They're typically from Silicon Valley, where everyone competes for millions of dollars in capital, or Utah, which is has a rapidly growing startup scene.
"The arrogant ones are sometimes the most interesting," Cuban said. "And so if they're arrogant, then it becomes a battle of wits for us. You see us perk up, because we want to come right back at them. Like hey you're coming one against five. And we each have our own skill set, and it's hard to match up against that many, even if there's two or three of them. And so that's interesting and that's a different dynamic."
For example, Cuban has said the worst pitch he's seen on "Shark Tank" was in Season 5, when the cofounders of Rolodoc asked for $50,000 for 20% equity of their confusing mockup of an app — a mockup that didn't even come with a business plan.
After Cuban dismissed the Rolodoc team by telling them "Worst pitch ever," he told CNBC that "typically I don't like to be mean to entrepreneurs ... but these were two doctors who I think thought they could just snow us and mislead us into thinking that because they're doctors they're smarter than all of us."
3. The 'Scam Artist'
Cuban said some of the entrepreneurs out there are just out to steal people's money. When they find their way into the Tank, they make for some pretty entertaining segments.
In Season 6, for example, Cuban called out Tycoon Real Estate founder Aaron McDaniel for being "scammy," because he considered McDaniel's real-estate crowdfunding business to be preying on unsophisticated people. Barbara Corcoran, who made her fortune building one of New York's premiere real estate agencies, said McDaniel and his idea were "spooky." The business no longer exists.
In the same way "Shark Tank" can make a company, it can break one, too.
© 2017, Investors Archive, "Mark Cuban on Entrepreneurship and Investing"
© 2018, Amazon, "Mark Cuban: 3 Essential Rules for Entrepreneurs"