I just went off the phone with a new speakers platform, will share details soon, and the 30 min conversation with the (great) founder turned up being a MUCH longer conversation because the speaking industry is in need of a profound innovation. More on this will be written about by yours truly.
There are probably more, but the distinction between these two categories of entrepreneurs is essential: I will call them the Exiter and the Builder.
(disclaimer, this post will be controversial and – as usual – I won’t give much of a f**k)
- The Exiter looks for capital (even if she has it available already), the Builder boot-straps and usually keeps most of the control.
- The Exiter build a company to … well … exit, whilst a Builder will likely stay longer around, and step aside to let someone of trust lead, or eventually sell as well of course, but with possibly a different multiplier
- The Exiter will be 170% focused on the company, do one project at the time, be extremely diligent (also because the investor won’t let her get distracted by anything else). The Builder will be more prone to experimenting, partner with other businesses, and share perspectives and revenues with other players
There is no good or bad here, of course. This is more a reflection about understanding which kind of entrepreneur you want to be, and possibly help you avoiding basic judgement mistakes when it comes to choosing a co-founder, or the type of investors you want to pick (there are investors who are more Builders than Exiters, especially at very early stage and if very much into the business you are in (so passionate they will almost come working with you on top of investing).
Can you be both? Yes, of course, but not in a single role. As an Investor I am an Exiter (because I advise VCs or CVCs and this is typically the very reason for them to be), although as a personal investor I am more of a builder, because I put my money in businesses I can get very involved in. The real estate business is a good example, in my case.
As an entrepreneur thought, I am definitely a Builder, mainly because of the need of having my brain busy in different businesses, and because I am more interested in maximizing freedom and impact rather than money. I am simply happier this way (and of course there is the right amount of revenue that has to match the degree of freedom you want to have, probably material for another chapter).
Why is it important to understand this difference?
You will be able to figure many aspects of your (independent) professional life if you do. Who you want to do business with, how to set up your own goals, how to manage your finances, and also the amount of compromises you are willing to make, and for the right reasons.
How do you do this? Being honest with yourself to start with. I know the mirage of millions in your accounts at one go, even after years of sacrifice and tears is alluring, but is that what you REALLY thrive for?
On my last Uber drive to Lisbon Airport, I had a very nice chat with a Brazilian driver, 55 yo, retired banker after 35 years of service, and he was explaining he worked for a very inspiring entrepreneur who has some 100 vehicles, started from nothing, and now making over half a million dollars revenue per year with his company (this is an estimation after he explained me the business model). The typical Builder entrepreneur, feeding 100 families with his business, and very well respected by all his employees.
Can this company be sold? For sure. Would it be a nice package, probably enough to retire? Maybe. But this is not the point. The focus, the drive, the endeavour are different from someone who could have built the same business asking for capital, maybe having 1000 cars instead of 100, and make a business plan to eventually replicate the same model in more countries shooting for the big Exit.
I hope you liked this distinction, and I triggered some thinking and reflection on yourself.