What is generally meant by Entrepreneurship?
The word entrepreneurship means many different things to many different people. To many people it conjures up images of flamboyant billionaires such as Richard Branson, Steve Jobs or Elon Musk but as you will see these people make up only a minute proportion.
There are many different shapes and forms of entrepreneurship which can cause confusion. Thankfully, in their book The Startup Owner’s Manual, Steve Blank and Bob Dorf provide a helpful categorization of the different types of entrepreneurship.
Conveniently they have broken it up into broadly 4 types:
- Small Business Entrepreneurship: this is the small business type of entrepreneurship like your local grocery stores, hairdressers or your mom and pop restaurant. Statistically these make up 99.7% of all companies in the U.S. and employ 50% of all non-government workers. In other words this is the bulk of most “entrepreneurship” and people like Branson, Jobs and Musk are the extreme outliers.
- Scalable Startups: these are your change-the-world scalable tech startup type of entrepreneurship. Like what Facebook, Airbnb and eBay started off as. They make all the headlines even though they are the far from the norm.
- Large Company Entrepreneurship: Large companies have finite life cycles. Most grow by continuously offering new products which are variants of their core products or introducing new products altogether. These aren’t typically what you would think of as a startup. But this is essentially the innovation that occurs within large organisations. In others words, it’s kind of like a startup within an existing large company. For instance Google (think when Gmail was started up internally), Microsoft (think when Xbox or Surface were started up internally) or Amazon (think expanding into cloud computing with AWS).
- Social Entrepreneurship: these are social impact startups, with the aim being not to make a profit but instead to help make a positive impact in the world. Good examples are Khan Academy, Bookshare and Code.org.
What do I mean by Entrepreneurship?
When I talk about entrepreneurship on this site, I’m generally talking about it in a very specific context.
I mean it in the context of creating a vehicle solely for the purpose of freeing up your indentured time. That is, time that isn’t yours because you’ve “sold” it all away.
So to be clear I’m generally not talking about any of the above kinds of entrepreneurship.
Instead I’m are talking about a specific kind. A kind that’s sole purpose is to free up your time and create cash flow. To free and liberate you from being sunk in and blocked out for the next 20-40+ years (depending on your age) of your life at a job you don’t like in a cubicle cell.
Now don’t get me wrong there’s absolutely nothing wrong those types of entrepreneurship but it’s a matter of getting your priorities straight. Here’s some of the issues with them:
- Small Business Entrepreneurship: this is what Robert Kiyosaki refers to as the S Quadrant. It’s where people go one better than having a job by creating a job for themselves. Of course it’s debatable whether it’s “going one better.” Yes in the sense that you no longer have a boss or have to sit in your little cubicle opposite Bad Breath Brenda. But often this involves longer hours, more risk without having the “stable” income of a job. You are tied to your business and you are essentially still exchanging time and money so you haven’t truly escaped Time-Money-Servitude. If you want to go on vacation, you’re not earning money, if you want to sell your business you can’t because basically, you are the business. Of course it’s possible to break out of the S Quadrant into the B Quadrant but that’s not that easy and is typically a time and capital intensive endeavour. For more on this topic, Michael Gerber is the authority. His book, the E-Myth is all about this and I talk about it another post.
- TL;DR: still exchanging time for money (sometimes even more time than having a job). If you want to grow and expand, there’s often financial risk and takes time, which may not be practical if you have family and financial commitments.
- Scalable Startup: you’ve heard the story. Young near broke kids in their twenties living on ramen starting a tech startup in their garage. Obviously this isn’t for everyone.
- Large Company Entrepreneurship: you would need to have a job for this. “nuff said. No really, if you’re reading this on a site called freedomfrom.work I’m assuming you’re sick of having a job. Before I move on, I’ll say one thing, this category of jobs can be more exciting than other types of jobs, especially if you’re at a change-the-world-type company like Google or Apple. Because you are actually contributing to creating something, as opposed to operational-type jobs where you are just a cog in a large wheel just following a process.
- Social Entrepreneurship: again you would need to have a job for this. The difference is you’re doing it for a good cause. This is okay but you’re not building your financial freedom. It would be wiser to first sort out your financial freedom before you do this or do it in parallel. This way you take money and the stress of being without it out of the equation and can give your all to the good cause.
It’s a matter of smart prioritization
What I’ve just described as what I mean by Entrepreneurship is akin to the concept in The 4-Hour Workweek coined by Tim Ferriss, which he calls the “muse.” I’ve taken a rather lengthy extract from his book here because I just feel the concept is that important.
There are a million and one ways to make a million dollars. From franchising to freelance consulting, the list is endless. Fortunately, most of them are unsuited to our purpose. This chapter is not for people who want to run businesses but for those who want to own businesses and spend no time on them…
Our goal is simple: to create an automated vehicle for generating cash without consuming time. That’s it. I will call this vehicle a “muse” whenever possible to separate it from the ambiguous term “business,” which can refer to a lemonade stand or a Fortune 10 oil conglomerate – our objective is more limited and thus requires a more precise label. So first things first: cash flow and time. With these two currencies, all other things are possible. Without them, nothing is possible [emphasis added].
Do you see the beauty in that?
It’s not that we are giving up our ambitions of starting a change-the-world tech startup, or creating a lasting legacy by doing a social impact startup, it’s just a matter of smart prioritization.
It’s going to the root cause. If you walk into a room and the floor is flooded with water and you see a mop and you see the tap is on and the sink overflowing. Do you go straight to take the mop and start mopping the floor?
No of course not, you go the root cause, in this case you go and turn off the tap.
While that’s a so-obvious-it’s-almost-silly example, many people don’t have this kind of logic when it comes to the topics of Time and Money.
First, free up your time by taking money off your mind then you can focus on giving your all in whatever you truly want to pursue.
Heck it may not even be business and money that you truly want to pursue. Always remember money is just a means to an end but many people mistake it for the end in itself.
I personally know many people who want to learn a new language, travel the world, learn how to play a musical instrument, learn how to code or cook and many other things. These are where their true passions lie, but the sad reality is they never can get to it, because work gets in the way. Their jobs eat up most of their adult life. Before they know it, life has flashed by in the blink of an eye. They regret not doing all the things that would have made them happy. By then, it’s too late.
So let me ask you.
If you can take money off your mind, what would you do?
Time and money are the all-important currencies you need to reclaim your freedom. Entrepreneurship (specifically, the concept of the “muse) is your ticket out of the Rat Race.