Contrary to popular opinion, Entrepreneurs are easily the worst at building successful businesses.
Entrepreneur – Wikipedia: “willing to accept a high level of personal, professional or financial risk to pursue opportunity. …in possession of an enterprise or venture.”
There are three basic business owner profiles:
- The Market Focused owner (the Entrepreneur falls in this category)
- The Systems Focused owner
- The Product Focused owner
Market Focused owners are just that – focused on what the market wants. They poke around and find holes in the way customers are being served and create companies to fill that need. They’re usually not passionate about any particular product or service, and sometimes know little about the one they’ve just decided to stake their future on. They’re dreamers, visionaries, spontaneous, flexible, willing to take big risks, and understand that speed of execution is vital in starting and growing a business. Entrepreneurs are Market Focused owners.
They’re also more often than not terrible business people. Too often the entrepreneur is lifted up as the holy grail of how to be successful in business, and other business owners are taught to emulate them.
It’s not a good idea.
Market Focused owners need more outside help, are the worst at taking instruction, exhibit the most over-confidence, do the worst due diligence, and fail way more often than either of the other two owner profiles. When they succeed, they succeed big, usually by sheer luck and number of attempts. But just like the gambler, you only hear about that one big win. You never hear of the many losses that, in balance, make the entrepreneur the worst risk to bet your money on. Entrepreneurs are the business world’s big gamblers.
The Wikipedia definition is good – note that it doesn’t mention someone who is a great craftperson or artisan, or highly knowledgeable at making a product or delivering a service. Entrepreneurs are quite often not experts at all at what they’re hawking. They’re great at seeing the hole in the market, but their best bet is to hire someone else to patch the hole.
The carnage they leave behind can be appalling. At their worst, the entrepreneur is a dreamer who causes people to lose their entire life savings on future possibilities and well oiled get rich quick schemes that the entrepreneur is truly convinced is a “sure thing”.
At their best, a heavily Market Focused business owner understands how handicapped they are by their affinity for risk, their unwillingness to really master their craft, their desire to spread their companies too thin and do everything the market wants. The self-aware entrepreneur sees the clutter in their mind and on their desk, and their inability to finish an idea because they already have a newer and better one.
And this awareness leads them to put aside their inherent over-confidence and get help. When they finally get the Systems Focused and Product Focused owner profiles involved and get out of the way (entrepreneurs are classic control freaks), the possibility of success goes up big time.
Michael Gerber (E-Myth) and others correctly identified that most businesses are not started by entrepreneurs. But they then proceed to lift up the entrepreneur as the model for how the other profiles should do it. Good luck with that.
The Market Focused owner may have the most serious issues in building a business, but all three profiles are broken. There’s a fourth profile they all need to become that almost no one starts with – it’s call Business Owner, which is a healthy mix of the best from all three of the other profiles. But more on that at another time.
The purpose of this rant? To free up the overwhelming number of people who own businesses who think the holy grail is to emulate the entrepreneur. Trust me, it’s not something to be pursued. You’ll want to add some of their great strengths, but don’t drink the kool-aid and dive in wholesale in becoming one. It’s just not good for the economy (or for your pocket book, your spouse, your kids, your health…).
FYI – the next two weeks I won’t need to be nearly so hard on the other two profiles (Systems Focused and Product Focused) because they’re rarely so over-confident as the Market Focused owner. Fortunately very few business owners are actually Market Focused entrepreneurs. Be thankful if you’re not one of them, and if you are, get help focusing on Systems and Production so you can become a true Business Owner.