The initial focus of my mentoring engagements centers around the words that an individual use to describe themselves. I generally start with a detailed self-assessment. The process tells me a great deal about how a person sees themselves and the labels that they choose.
Labels Can Be Dangerous Things
One of the most frequently used labels is entrepreneur. It is used so frequently that I got to wondering if it had any stable meaning or if it had become one of those overused tags that was now almost completely meaningless. So I set about asking each person what they meant by the term.
I found that, when I drilled down to what a person actually meant by that label, the word itself had virtually no stable meaning. I’ll show you what I mean by describing several recent interactions with individuals who used the tag to describe themselves.
The Sole Proprietor: I was recently approached by a person who had spent almost two decades as an independent contractor. She provided advice on marketing and branding. When I asked her to describe herself, the first word she used was ‘entrepreneur’. When I asked her what that tag meant, she replied, “an entrepreneur is someone who is their own boss.” Drilling down a bit she had a few defining characteristics:
- Heads an company
- Is their own boss
- Does not work for a large company
- Is in control of their decisions
The Consultant: Another person who recently asked me for help had spent more than a decade working for a large, local company. He was laid off and had started a consulting practice and also called himself an entrepreneur. In a similar exercise, here was his list:
- Works outside hierarchical structures
- Provides knowledge and expertise
- Sells his time on an hourly or retainer basis
- Chooses who he works for and with
- Chooses what he works on
The Perennial Founder: Several years back I worked with an individual who bragged that he had started a dozen companies. Although none of his companies grew beyond the start-up stage and only two of them ever generated significant revenue, he also saw himself as an entrepreneur.
- An idea man
- The one who thinks things up
- The spark that gets things going
- The person who sets it in motion
The Student: I am asked, on occasion, to give lectures to classes – mostly in business schools around Washington, DC and mostly before classes that are focused on one or another part of the process of founding and growing companies. During the meet-and-greet after one recent lecture, a student introduced himself, stated that he was a budding entrepreneur and could I give him some advice on the best way to arrange an exit that would maximize his wealth. When I asked him about his company, the replied, “I haven’t started it yet but you can’t start planning too early.”
- A way to become wealthy
- It doesn’t matter what the company does, it’s the exit that counts
- Being an entrepreneur is the way to wealth
- There is not particular skill required, you just have to be determined to succeed
So now, let’s turn to two definitions of the word entrepreneur. First from the dictionary:
“… a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.”
The two key words in this definition are organizes and operates. In all four cases described above both were absent. There was a mostly random walk in search of sources of income int eh first three and none at all with the student. But the vision, planning and implementation that makes for effective entrepreneurial activity was missing. Operations were limited to managing each person’s time and resources. Absent was any concept of operations beyond the individual’s focus.