Part 3: Life Stages of Entrepreneurs
In previous blog posts, we compared how people who work in business analysis have many parallels with entrepreneurs. Much of the similarity rests with the products that BA practitioners help create and the solutions they bring to organizations. There are also many, many personal traits and skills that the two have in common.
Now we’d like to explore different life stages of entrepreneurs to dispel the notion that only a few, those who are risk-taking or young people, could become entrepreneurs.
Entrepreneur vs. Intrapreneur. First there are external and internal entrepreneurs as mentioned in part 1. The internal type of entrepreneur is commonly called an intrapreneur. The two share many similarities in terms of launching ventures and products and in being innovators. The main difference is that entrepreneurs take on financial as well as personal risks. Intrapreneurs mainly shoulder personal risks. Their organizations may face financial risks, but the intrapreneurs don’t typically take those on.
Life stages of entrepreneurs. A common misconception is that only young people are meant to be entrepreneurs. One might assume that youth is a prerequisite, given venture capitalists seem to have an unwritten rule that says funding is available only to those who wear a hoodie! This notion is hogwash and the following table of life stages of entrepreneurs explains why. (By the way, the first and 3rd terms are ones we thought of, whereas “reluctant” entrepreneur is part of the title of a good book on entrepreneurialism.[i])
|Type||Typical Beginning Stage||Risk Tolerance||Tends to Start
|Also Known As|
|“Lifelong” Entrepreneurs||Youth||Risk tolerant||A good idea||Serial entrepreneurs|
|“Reluctant” Entrepreneurs||Middle age||Calculated risk takers||Experience with a profession or product||Expertise entrepreneurs|
|“Elder-preneurs”||Late middle age or older||Anywhere from tolerant to adverse||A lifetime dream of owning own company||Encore entrepreneurs|
Table 1 – Life Stages of Entrepreneurs
Lifelong Entrepreneurs. When we hear the term entrepreneur many of us think of tech entrepreneurs like Steve Jobs or Mark Zuckerberg. Their type of entrepreneur tends to be young, risk-tolerant, and may be primarily focused on either the challenge or the independence that entrepreneurship offers (and perhaps both). Because they start young, they often stay entrepreneurs their whole lives, and often start new ventures after selling off their previous one. The term “serial entrepreneur” was coined to describe this type. Chances are if you are a business analyst, you are probably not a lifelong entrepreneur.
Reluctant Entrepreneurs. These types of entrepreneur are typically middle-aged, take calculated risks, and are likely to create a product or business idea based on their experience. Often they start a company while still working at their jobs. As an example, Brian Quittner is a reluctant entrepreneur who worked for 15-years at the Santa Barbara California Harbor Patrol. After breaking or losing numerous flashlights on the job, he developed a special hands-free concealed light for law enforcement. He developed and started manufacturing the product while still working at the Harbor Patrol. Brian and his wife then filled orders from all over the world out of their living room before the business took off and they could quit their day jobs.
What we find interesting about the reluctant entrepreneur stage is that most business analysts would probably fall into it. After all, as BAs we’ve usually accumulated a wide range of in-depth experience. I (Rich) was a reluctant entrepreneur when I started Watermark Learning back in 1992. And, Elizabeth was certainly a reluctant entrepreneur when she joined the company and gave up a good job and steady paycheck.
After working for 17+ years in business as a BA, PM, consultant, and trainer, I had built up experience both in software development and training. My family also had two children about to enter college. It would have been too risky for us for me to launch a restaurant or book store (not that I wanted to, mind you!). A failed business venture would have been a financial hardship.
But, it was much less risky for me to start training and consulting for my own clients. I was able to leverage my expertise with training and software, plus general business knowledge to be successful. Oh, did I mention I was 40 that first year in business? Sounds young to me now, but you’d have to call that early middle age which put me squarely in the prime age bracket for reluctant entrepreneurs.
Elder-preneurs. Those who are not ready to launch a business in your 40’s or 50’s may be ready to do so later in life as so many people are doing today. Elder entrepreneurs are actually starting more businesses than 20-29 year olds. Over 23 percent of startups in 2012 were from people between 55 and 64 years, which is up from 14.3 percent of all new ventures started in 1996 (Source: Kauffman Foundation[ii]).
Elder-preneurs, sometimes called “encore” entrepreneurs, can also use their expertise to start a business. But the beauty of starting later in life is the ability to pursue a lifelong dream without the same financial or career pressures typically felt earlier.
Take Judy and Steve Soldinger as an example, she a former nurse and he a TV broadcaster in their 60s. They became entrepreneurs when they bought CrispyCakes, a business that makes yummy marshmallow treats. Their friends and kids thought they were crazy to start such a venture at their age. The two had a dream, though, of running their own business. Now, even though they typically work 12-hour days, they absolutely love it. Their success has recently led to a contract to sell their treats to Disney World among others.
Where do you fit in the entrepreneurial life-stage and what is your entrepreneurial dream? Leave your thoughts in the comments section.
[i] The Reluctant Entrepreneur by Michael Masterson, 2012, John Wiley and Sons
[ii] http://venturebeat.com/2014/10/31/why-middle-aged-entrepreneurs-will-be-critical-to-the-next-trillion-dollar-business/. Downloaded Nov. 9, 2014.