Startup founders vs entrepreneurs

http://swombat.com/2013/6/4/startup-founders-vs-entrepreneurs

by glitch273 • 13 years ago

71 22 13 years ago

kn0thing2• 13 years ago

The author's point about "entrepreneurs" not being exclusive to the world of startups is exactly what I hope to show with my book this fall. It's a dangerous mindset because in this internet age, we need more people to be thinking about themselves as entrepreneurs.

bornhuetter• 13 years ago

I am reading a good book by Daniel Pink called "To Sell Is Human" at the moment, which makes the point that many people who do not think they are working in "sales" actually are. It sounds trite, but he does go into a lot of useful detail and advice from there - and this ties into your point. I look forward to your book.

kn0thing2• 13 years ago

Thanks! Kindle'd!

mindcrime3• 13 years ago

I am reading a good book by Daniel Pink called "To Sell Is Human" at the moment,

Hey, I'm reading that same book! It is very fascinating so far, and I recommend it to, um, pretty much everybody.

makes the point that many people who do not think they are working in "sales" actually are. It sounds trite, but he does go into a lot of useful detail and advice from there

Yes, exactly. The premise might not exactly be an earth-shattering revelation, but the book is fascinating nonetheless.

simonbarker87• 13 years ago

Excellent point that I try to make to people who come to me with ideas. They all believe that they can raise money for an app and then sell it before they ever need to test their business model. There is nothing wrong with starting small, taking it slowly and growing a business on profit reinvestment.

Having said that, we've taken VC as we had no choice. So, when you want to start a capital intensive business then taking money is often the only option - just make sure your business model is solid.

bmac27• 13 years ago

"My personal opinion is that if you're starting off from a position of weakness (i.e. you're poor and not famous), and especially if you're not in a startup hub like Silicon Valley, it makes a lot more sense to go down the entrepreneurial route than to go via the startup route."

I think this is particularly good advice if you're not a developer or aren't able to make the time available to really dig into learning how to code. Odds are you aren't Steve Jobs and won't be able to recruit the technical partner you want to work with to build your uber brilliant idea for reasons articulated here many times before.

There's nothing defeatist about building a viable, cash-generating business in lieu of standing around waiting for the magical technical co-founder of your dreams to fall into your lap. Plus, if you create something of value (be it content or otherwise) in the field you're looking to get involved in, you're much more likely to put yourself in a position to be able to recruit the kind of person you want to work with anyway.

nickpinkston• 13 years ago

Totally with you on ::just get something going instead of waiting for a technical co-founder::, but honestly if you're passionate w/o all the skills to make your business, it's not hard to find someone who can be passionate about it too.

I remember some quote about a guy who asked a VC, "How do I find engineers to help build my product?", and they said, "I don't know, but the best entrepreneurs always do".

There are technical people everywhere - plenty of them are bad at raising money, making money, etc., but would jump at the chance to work on an idea they love. Help liberate a great technical person.

At my company, I focus on the mech. eng./ business side, while my co-founder does all the software. It's been great so far, and we both get to work on something we love.

If you have an idea you love, don't sacrifice it because you don't have all the skills - you rarely will. Try to do some small version of it as fast as possible. This will show your co-founders-in-waiting that you've got the chops to run this business so they feel confident in having your back technically while you have theirs on the business end.

bennyg• 13 years ago

I actually hate that quote. What's to stop a poor developer who's not in SV from making an awesome, scalable tech startup?

  Startup founders are, quite simply, people who found startups. They register a business (maybe) and create something that might turn into a business at some point, or even do turn it into a business successfully.

What's stopping me from trying to change the world from Alabama? What's stopping me from making some really cool stuff that I want to see across the whole world, or at least this country, from the deep south? I can spin up a Heroku instance in 5 minutes, and get an app going in under a day. Another day to make a MVP iOS app (then a week to the App Store), and effectively I have infinite reach. There's a very serious, debilitating mindset a lot of people have on this board about necessary VC funding, and a necessary Silicon Valley geographic base. None of those things are true anymore. And likely, weren't necessarily true in the past. It's grotesque that people think funding is what you should strive for. It's horrifying that people are motivated by a TechCrunch article and an exit. Maybe I'm in the minority here, but that's not WHY I'm an entrepreneur. An exit isn't even a motivation of mine. I want a lot of people to use my creations, and to love them. If I can get paid well to achieve that goal - that would be great. If I can get other people paid well for helping me achieve that goal (ie hiring a team), then that's even better.

Sorry for the rant, but I think that quote is entirely off-base and absolutely repulsive.

swombat6• 13 years ago

I think you may want to re-read the article and the quote, and the comment you're responding to, and get a bit of context. You sound like a knee-jerk reaction that's actually agreeing with half the article, but in a really needlessly aggressive way.

Nothing's stopping you. But you'll find certain paths easier than others, depending on what you want. That's what the article is about.

Reading my article, you might notice that I'm arguing, precisely, that you don't need VC funding or SV or any of those things to start a successful business.

That said, if you approach it with the "build it up and worry about the money later" that is often present in typical startups, you will probably (not certainly) fail hard.

As for the comment you're replying to, he's also stating the point that in some parts of the world (most parts), you're better off getting on with starting a business that works anywhere, rather than waiting for the "magical tech cofounder" who's going to start a tech startup with you and take it to infinity and beyond. You might notice he's addressing that specifically to people who can't "spin up a Heroku instance in 5 minutes".

beatpanda• 13 years ago

swombat6• 13 years ago

Excellent talk, definitely worth watching, and related to this article's topic.

marcosscriven• 13 years ago

Wow - he's a great speaker. Thanks for the link

mindcrime3• 13 years ago

You can be an entrepreneur today and a startup founder tomorrow, or both at the same time, or just a startup founder.

I don't exactly agree with this distinction between "startup founder" and "entrepreneur". What I mean is, I think "startup founders" are a subset of "entrepreneurs". So while you can clearly be an entrepreneur without being a startup founder, I don't see how you can be a startup founder and not be an entrepreneur.

That said, I think I agree with the overall point that I think swombat was making, regarding the different "paths" a business can take: take VC money, plan on being scalable, go for the moonshot, etc., versus looking for profitability early on, and choosing organic growth, and a slow, steady progression.

That bit is definitely an important distinction, and founders (of all ilks) should think about it. But I don't quite think it maps to "entrepreneur" versus "startup founder" from a terminology point of view. But that's just me and my biases.

It also strikes me that you aren't committed to one "path" forever. A company could, theoretically, start with the "slow and steady" approach, self-fund / bootstrap, grow slowly while seeking product /market fit, business model validation, etc. and then, once the foundation is laid, go out and look to raise VC money or private equity money to accelerate growth to the "big time".

swombat6• 13 years ago

Having observed quite a lot of startup founders at incubators, networking events, and of course online, I think there definitely are "startup founders" who are not entrepreneurs. They are looking for a job that happens to be CEO of their own startup, rather than to create a business that meets a need and makes some money.

Totally agree with your other points though - you can shift from one path to the other, and back, both as a person and as a business. As a person, I myself was certainly a "startup founder" on my first two startups, as I considered myself a startup founder and entrepreneurial but I actually had zero clue about how to create a business.

It's only when I started GrantTree, and I took on the role of creating all the pieces of the business around my cofounder's sales abilities, that I learned to be an entrepreneur. Before that, I had a job whose title was "cofounder". My thesis is that's the case for many "startup founders".

PS: We can of course disagree on this, and that doesn't make your or my opinion any less, but just thought I'd restate in case I was unclear.

mindcrime3• 13 years ago

PS: We can of course disagree on this, and that doesn't make your or my opinion any less, but just thought I'd restate in case I was unclear.

Sure, I don't even think we disagree about much. I'm really just quibbling about terminology, and - as you mentioned - people are constantly arguing about the exact definition of terms like "entrepreneur" and "startup" etc.

I will just add that I haven't met a lot of the kind of people you talk about here:

I think there definitely are "startup founders" who are not entrepreneurs. They are looking for a job that happens to be CEO of their own startup, rather than to create a business that meets a need and makes some money.

which may come down to geography, or maybe I do meet those people but they don't register because I mentally filter them out very quickly, or whatever. But now that you word it that way, I can see how you could reasonably talk about a "startup founder" who isn't really an entrepreneur.

As a person, I myself was certainly a "startup founder" on my first two startups, as I considered myself a startup founder and entrepreneurial but I actually had zero clue about how to create a business.

I know the feeling. Before I read The Art of the Start and The Four Steps to the Epiphany I had only the very, very vaguest of notions of exactly how to go from "I have an idea" to "I have a business". Luckily, between those books, and a lot of great articles linked here at HN (and very pointedly, a lot of yours, swombat!) I think I now have a reasonable idea of what it takes to turn the idea into a business. Now, we might still fail for any number of reasons, but at least we're not just stumbling around in the dark.

And, for what it's worth, we are currently going with the bootstrapped, "try to be profitable as as early as possible" model. These days, I try to frame most of my decision making in terms of "What is the most important thing I can do right now, in terms of getting to revenue"? (And no, posting here isn't contributing much to that goal, but everybody needs an outlet of some sort now and then, besides work!)

forgingahead• 13 years ago

Great article which really needs to be "stickied" at the top of places like HN and Techcrunch and the like. Semantics aside, the general point about there being business success and life outside the Silicon-Valley-raise-VC bubble is so important, and one that so many new and promising potential business-people completely miss.

onion2k• 13 years ago

Daniel defines "entrepreneur" as something that doesn't include startup founders, and then argues why startup founders aren't entrepreneurs. Err.. duh?

That's great, if, and it's a very big if, you agree with the initial and very limited definition of "entrepreneur". The fact is "entrepreneur" doesn't mean "someone who sets out to start a business in order to make money", which is Daniel's definition. An entrepreneur is someone who starts a business. It's that simple. Startup founders are entrepreneurs. They are often aiming very high, sometimes a bit naive, and occasionally downright delusional, but they definitely fit the entrepreneur mould. To suggest otherwise is wrong.

swombat6• 13 years ago

I use that definition because I'm trying to make a point. Clearly, I am trying to appropriate the word "entrepreneur" to mean something more specific than "anyone who starts a business". That is a pretty useless definition for my purposes.

saddino• 13 years ago

As someone who has been both, I don't think the distinction is that important. Either route carries enormous pressures and the associated stress that comes along for the ride. Plenty of lifestyle businesses have taken the same toll on their founders' marriages, families, net worth and more. In fact, probably more entrepreneurs have offed themselves due to business failures than startup founders.

The actual question for would be business owners is: does the intensity of your passion drive you towards accepting this risk? If you are unsure, then either title is probably the wrong one for you.

swombat6• 13 years ago

In fact, probably more entrepreneurs have offed themselves due to business failures than startup founders.

Certainly, since historically entrepreneurs have outnumbered startup founders by a very wide margin and for a very long period.

I disagree that the entrepreneurial route carries that much risk. Importantly, as an entrepreneur you're largely in control of the risk. You can manage it, minimise it, explore it, etc. You can take (large amounts of) money out of the business any time you want if it's making that money. You don't have to wait on a binary exit event years down the line, that may be foiled because another similar startup got even further than you and took the market away. Hundreds of thousands of businesses make plenty of money for their owners without ever getting near an IPO or acquisition.

I've done both too - I much prefer the entrepreneur route. As I argue in the article, I also believe that it's more transferrable. Entrepreneurs are always in need, everywhere in the world. Startup founders, nowhere near as much.

sauliuz• 13 years ago

One of the main reasons there are many startup founders who dont really care about being entrepreneurs (making money or closing value/profit loop as Daniel says) is a great desire by VC community to profit on the tech startup boom. Look at the majority of new startup accelerators out there and the message they are transmiting.. The fact is that all these groups are funded by clever investor money to play the numbers game. Simple as that. And in this numbers game majority of scalable startup founders are being left hanging in the air. This creates virtual reality of some sort.. Check out this interview with Steve Blank, he wraps it up nicely http://www.youtube.com/watch?v=TYCE3980kPA

swombat6• 13 years ago

Absolutely. I respect the VCs and angels for playing this game successfully, and startup founders really should know better than to play this without any idea of the alternatives. My issue is that many founders think this is the only way to do business.

Startup founders vs entrepreneurs

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