There Are 2 Types of Entrepreneurs — And This Is the One You Want to Be. Here's Why. By honing a few strategic leadership abilities, you'll be able to reach new levels — ensuring that your business is running smoothly and ready for whatever comes next.
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Given recent layoffs from big tech and the looming potential of a recession, it might seem strange to hear me say that now is the perfect time to be an entrepreneur…for leaders to step up with something new. According to an April 2023 Yahoo Finance interview with Luke Pardue, an economist at Gusto, the unpredictability of the current market represents an ideal opportunity for entrepreneurs to find new solutions to old problems.
Before rushing out to start work on the next big idea, though, ask yourself one thing: What kind of entrepreneur are you?
That might not seem important now, especially if you're in the early stages of a startup. However, as someone whose job is to help entrepreneurs turn visions into realities, I've seen the answer provide leaders with pivotal insight into their strengths and limits, and ways to nurture and overcome them, respectively. If you're looking to capitalize on this moment of disruption and create an enterprise that it's in for the long haul, this is not a question you should ignore.
The two types
Every business leader brings unique experiences, styles and skills, but in my experience, most tend to fall into one of two categories at the macro level. "Status" entrepreneurs are primarily driven by external or revenue-focused goals, which can be great motivations early in a company's lifecycle. If you're in this category, you likely know exactly what you want, and that can propel early success, but even the best of them struggle with stagnation as time goes on. To avoid this, you'll need to break out of a status mindset and evolve.
If you're a "freedom" entrepreneur, however, you're not driven by external forces or some great vision to be fulfilled, but by the desire to push your abilities to the next level — to learn quickly and master skills that are relevant now, and which will direct you toward a bright future. As a freedom entrepreneur, the goal is to continue accomplishing new things — to be ever iterating and creating something bigger, better, faster and cheaper.
Related: What Your Personality Type Says About Your Career Destiny (Infographic)
Finding your freedom
You may be thinking that there's a clear winner when it comes to these two types, and you'd be half right. Each has its benefits during the early stages of a project or startup, but it's harder to balance status-driven goals later. The point of this article isn't to scold anyone for being one type or another but to help leaders recognize where their drive resides and identify ways to evolve.
Here are the five leadership skills of effective freedom entrepreneurs:
1. Simplify and streamline
Simplifying an organization is a crucial skill for leaders, as Steve Jobs famously recognized. As any enterprise grows, so does its complexity, and the number of people who rely on its management. To avoid feeling overwhelmed and overburdened, it's critical to confront that complexity head-on and simplify initiatives as soon as possible. The result will be making more informed decisions and leading teams with greater confidence and clarity.
Related: 4 Steps New Entrepreneurs Can Take to Simplify Their Work Days
2. Always look ahead
Forecasting is a vital skill for anyone who wants to stay on the cutting edge (or who just wants to keep up), and a lack of it can be an existential crisis. After all, a failure to predict where the smartphone market was headed led Blackberry and Microsoft to cede huge swaths of market share to Apple and Google.
To lead your company well, you must be able to predict what will happen in the short and long term. The good news is that you don't need to be clairvoyant to make savvy forecasts. One way to hone gut instinct is to read a wide variety of news and analysis within your industry. A diverse selection will provide a spectrum of opinions that will help you better form your own. Be restless in your hunger for information.
3. Delegate
Being an effective leader doesn't mean doing everything yourself. It means knowing and focusing on what you're good at, then delegating the rest. A Gallup study in 2014 highlighted this clearly: CEOs with high delegation abilities reported three-year growth rates 112% higher than those with lower abilities.
My advice is to seek out employees who love to do what you don't. When focusing on the things you enjoy, you will be your most productive self. Perhaps even more importantly, you will not be relying on external factors to drive success. Instead, you'll be having fun while capitalizing on your skills.
Related: 5 Reasons Why Delegation is a Must for Entrepreneurs
4. Systemizatize
Creating repeatable processes and structures can eliminate tedious, time-consuming work, reduce employee workload and give you more opportunities to focus on innovation and growth. Through automating, you can free up hours for tasks you truly enjoy, while still providing exceptional customer service.
A 2020 study by O.C. Tanner revealed that a shocking 79% of workers report suffering from burnout at any given moment. By implementing repeatable systems and automating processes, you can create a more sustainable work environment for yourself and your team, and so reduce stress. This leads to higher levels of employee engagement and productivity.
5. Be hungry for structure
The ability to rigorously blueprint an organization (and a willingness to revamp it, if necessary) is critical. Without the right people in the right seats, you won't be able to achieve goals or work with teams effectively. Look carefully at the kind of business you want to create and the impact you want it to have, then determine what structure fits that vision. What kind of people will it need? Which skills will be the most valuable?
It's helpful to look at enterprises similar to yours to determine how they are built and take inspiration where it's of value. Being a good leader is about understanding what works for your unique needs so that everyone can achieve together.
Here's the secret: The real question isn't which type of entrepreneur you are, but what kind you could be. By fine-tuning leadership abilities, you can hone both the skillset and mindset to reach new levels, and so ensure that your business is running smoothly and ready for what comes next — with clear-cut goals and good people supporting it all.
