Entrepreneurship: To be King, or to be Rich?

In my last post, I talked about two styles of entrepreneurship, "Lifestyle" and "Impact". There is another way to look at entrepreneurship and what you want from it. This is not so different from the last discussion, but has a different view point of the same thing.

When engaging an entrepreneur, I ask them the question, "Do you want to be King, or do you want to be Rich?" Most reply that they want to be Rich, without hesitation, but when I look at their business, I see that they are King, which prevents them from being Rich.

Undoubtedly, every entrepreneur has a bit of each. It takes ego to be an entrepreneur, and ego likes to be King. However, it is only through the discipline of suppressing the King ego can we become Rich.

Kings, at least in the old days, had absolute control of their kingdom. They were the end-all of decision making and had absolutely power. Most small business today is run in such a way. This is not to say it is inefficient or unprofitable, but that profit's growth is limited by the organizational structure. Without delegation of power, an organization's growth is limited to only what the King can handle. Different Kings has different limitations, but the limitation exists none-the-less.

Kings often hold all the expertise and believe that they alone know the best way to rule their kingdom. Again, this has growth limitations that are obvious. Kings are often married to one goal as well. That their kingdom will be most successful doing X and Y in the Z market. And they know this better than anyone.

To become truly Rich, one must let go of all these limitations. Responsibility and expertise must be delegated. Control must be relinquished. Others must be allowed to participate in the growth and the rewards. Bill Gates did not become the wealthiest man in the world alone. Microsoft created dozens of billionaires, each with ownership of one piece of that success.

Here is the key distinction: Is it more important to you that you be successful or that your company is successful? Do you want to be King, or do you want your company to be King? Are you willing to give up some Kingship to be Rich?

Two Styles Create Two Outcomes of Entrepreneurship

There are many different ways to become an entrepreneur and many different styles of entrepreneurship. However, entrepreneurship can be very roughly categorized into two styles. These can best be defined by their desired outcomes.

The first is a "Lifestyle Entrepreneur". This entrepreneur wants to create a good income for themselves, wants to be in complete control of that income, and wants the flexibility to make lifestyle decisions- such as take the day off to go fishing, or take three weeks off to take a family vacation. In this path, lifestyle may take precedence over overall return on investment. As long as a substantial income continues, the entrepreneur is happy. Most "mom and pop" businesses fall under this category. Most small businesses also fall here, as well as independent professionals such as doctors, dentists, accountants, and attorneys. The risk is often relatively short lived and minimal. One can make a very good living as a Lifestyle entrepreneur,and if they manage their finances smartly, can become independently wealthy. However, at times, lifestyle may trump finances. The business then runs into problems.

The second style of entrepreneurship is what I call a "Impact Entrepreneurship". The desired outcome is high-growth. This type of entrepreneur typically wants to grow from a small business to a large business. They want to either make an impact on the world or create great wealth- often a combination of both. These people are willing to undertake larger risk over an extended period of time with the vision of large returns. The organization is designed (or should be) for constant and radical growth (2-4x revenue each year). Margins are thin in the first 3-5 years. However, once high-growth has been achieved, some very attractive exit strategies materialize. A first or second round of funding can occur to take growth to the next level. Or the company for a significant profit to the owner. Both can create great wealth, the first allows the entrepreneur to continue to create an impact or "change the world".

Sometimes a lifestyle business will accidentally convert to a high-growth business. This may be driven by changing goals of the the entrepreneur. However, sometimes it just happens because the business is at the right location, in the right industry, with a rapidly growing demand. In these cases, the entrepreneur must make a choice to change personal goals and lifestyle, or to suppress the business. This decision is often be delayed because the entrepreneur is uncomfortable with the related decisions. Delay serves to suppress the business. Organizational, financial, and quality control decisions that support high growth are not made. The business can begin to crumble. Perhaps not immediately, but surely over time.

Lifestyle entrepreneurship is most often engaged to create a sense of independence, that the entrepreneur is not reliant upon anyone for income, expertise, and lifestyle decisions. It takes time to achieve this goal. Lifestyle entrepreneurs are often frustrated with slower results. Further, if presented with a high-growth opportunity, Lifestyle entrepreneurs are often reluctant to give up independence and decision-making power. Impact entrepreneurship is dependent upon many factors. Financial obligation exist to investors, banks, or both. Expertise is generally held by an employee or partner. Decisions must be delegated. The market is often more volatile. Business travel is required. Time obligations are intense. This is a much different lifestyle.

The rewards are different. Successful Lifestyle entrepreneurship creates financial freedom and a fluid lifestyle relatively quickly. It creates a "family" business that can be passed on. It creates the satisfaction of being a business owner. Successful Impact entrepreneurship creates significant personal wealth, but is delayed 5-15 years. This personal wealth creates greater freedom and can be passed on to family or charity. It creates the satisfaction of having made an impact on the world around you.

Neither is the right way. But both have distinctive requirements and a conscious decision should be made at all times to engage in one or the other. You may have to make this decision every year. Your personal goals may change. Life is like that. But we must make the decision and take responsibility for the obligations and rewards associated.

Leaping is fun with a parachute!

A leap faith is often noted as a blind jump into the unknown. I take issue with this. When the topic comes up, I respond that, "Leaping is fun with a parachute!" I currently and frequently have taken huge leaps of faith. I have, as often as not, plunged to the ground. As time passes however, I find myself soaring more often. I have learned two important lessons that help me create a parachute.

First, your single biggest responsibility is absolute commitment, with no doubts. It is critical to hold the vision. Never look back from the leap. The minute you let the vision go, your commitment falters, and with it your performance, creativity, and motivation. You become part of the problem. You then MUST accept full responsibility for any failures that follow, even those not directly related to you. Because doubt is contagious.

Second, because leaps require such commitment, it is essential to remove risks as early and quickly as possible. You should never leap into thin air. Learn critical assumption planning. Identify where assumptions are being made by yourself and other principals. Remove those assumptions by testing. Do so very early, before taking the leap, if at all possible.

It took some hard falls to learn these lessons, and they are reinforced daily. But those lessons create growing success and I have learned to relish the results.

Intrapreneurship: Anyday, Everywhere Entrepreneurship

I recently learned a new term that delights me: Intrapreneruship. Wikipedia defines an intrapreneur as "the person who focuses on innovation and creativity and who transform a dream or an idea into a profitable venture, by operating within the organizational environment." This delights me for two reasons. First, it steps outside the box that entrepreneurialism is typical placed in. Second, it describes much of my career in a word.

In my bio or my personal elevator pitch, you will frequently find the words "worked within an entrepreneurial environment for much of his career". Now I can just say "career intrapreneur" and be done with it. How great is that? I have not yet started my own high-growth entreprise. I will, later in life. But I have helped many people bring their dreams to fruition. Is that not entrepreneurship just as much as the founding father/mother? The fact of the matter is that entrepreneurial behavior is everywhere. It drives growth in every aspect of life. It is the foundation of evolution. We would not have the wheel or fire without entrepreneurial activity.

For us to package entrepreneurs in a box that says "Sole Proprietor", or "Start-Up", or "Small Business", or "Venture Capital" is completely missing the point. The fact of the matter is that our the word entrepreneur is like the word "snow", one word used to describe an entire variety of actions. The Inuit have more than four dozen words for "snow", each to describe a different type of snowing, or a different type of snow flake. Entrepreneurialism is the same. Here are just a few other words for entrepreneurs: Project Manager, Preacher, Farmer, Broker, Mother, Architect. Entrepreneurs are creators and innovators. They are people that drive change, create growth, and embrace progress. They are everywhere. They are our future.

Post-Script: Anytime that I discuss entrepreneurship in this blog, I am also directly referencing intrapreneurship. The founding principles are one in the same.

Entrepreneurship: Focusing on the RIGHT Results

Last week, our article discussed manifestation. We talked about focusing our on results to get results. What are the right results for an entrepreneur? Aren't they self apparent? Isn't to run a successful business, to make lots of money, and to create something unique? Of course. Then why is it that so few entrepreneurs are focused on these things? Maybe you are, but is it the foremost objective in your mind?

As the business gains traction, so often we are focused on the daily grind of business. The foremost thing in our mind tends to be those packages need to be shipped before lunch, or that client that wants more shirts before Tuesday, or that circuit that won't work before the prototype rolls, or.... You get the point. We are focused on small issues that are decidedly NOT as important the big picture (though we sometimes fool ourselves that they are). But more pointed, a great majority of our time is focused on obstacles. If 90% of our energy (time, money, action, and commitment) is focused on obstacles, what kind of results should we expect? That's right. Obstacles.

At worst, our obstacles grow in size and context. At best, we manifest solutions and we become a solution factory. Is that why we started the business? Perhaps. Solutions are certainly helpful, but they are not the end product. Remember success, money, and uniqueness? What happened to them?

We often leave those key things to be a two minute motivating speech at the end of staff meetings, or something to talk about at the annual planning retreat, or they are only inspirational words on your wall poster. I hear all your complaints and excuses about energy and resources, and that "its just not practical." You just get swept way in things. Hogwash. If that's what you think, quit acting like an entrepreneur and go get a job. You are short changing yourself and everyone that is counting on your achievements.

Want to really manifest entrepreneurship? First, you have to decide what success is and what idea of success you WILL go after. There are a dozen methods out there that will help you discover this- your brand, your purpose, your Hedgehog concept. The last one, presented in Good to Great by Jim Collins, is the foundation upon which every since has been based. The best selling book discusses it in terms of organizations and businesses, but it works equally well with individuals. It is particularly important for entrepreneurs, building businesses upon themselves. Find the method that works best for you.

The basic idea is this: Identify what you do best, what you are passionate about, and what economic model works best for you. At the intersection of those three things is where you should find yourself. You will have the best chance of success, have them the most fun, and will find the work most rewarding. Now doesn't that sound like a place you want to be?

Once you have figured this out and aligned your business objectives with that concept, you must make sure that those things, not the obstacles, are what stay foremost in your mind. We must remind ourselves on a constant basis why we got into the business, and what the big objectives are. Each of us will develop a unique way to do this. The method is not so important as long as it is done. You might develop a purpose statement that you frame and hang in your home or office, where you see it many times a day. You might spend 10 minutes every day reviewing those big objectives, and an hour every week reviewing your progress. You might enlist someone to hold you accountable to them.

These things may seem hokey, or too warm and fuzzy, but again the question comes into play: How committed are you to your success? How far are you willing to go? How much energy are you will to give? If you want to go all the way, it is critical to put activities in place that will not allow you to get caught up in the daily obstacles. To manifest growth, you must set aside time to focus on growth. You will be surprised how a little energy diverted in this direction will quickly create dividends of success.