What Type of Lean Entrepreneur are You?

by Rick Hansen

This post is influenced by some news of the past week as well as a few of the case studies of LTV.  LTV teaches important concepts and principles for implementation, but perhaps lost in all the cases is the amazing variety of personalities whom we’ve covered.  Having worked with a few types of entrepreneurs in the tech space in the past (and having my attention piqued by events of the past week, when the start-up I was supposed to write an HBS case for was abruptly acquired), I think it is also appropriate to spend some time figuring out the different types of start-ups that fit our career vision. 

The Sell-out

I know, the name sounds bad.  But the negative connotation isn’t really fair.  In the end, start-ups hope to create value through new and innovative ideas.  At some point, there are economies of scale to be had which are usually best exploited by larger, more established firms. 

As an MBA, you better know whether you are working for the Sell-out, because as the company becomes more successful your job may change overnight, or may be eliminated entirely.  This week I had this happen to my field study when the company I was profiling was unexpectedly acquired.  (Silver lining: using LTV principles in practice to pivot my field study.)  Sell-outs are often myopic on technology or IP development, rather than on customer needs or PMF.  Often there isn’t even a product released at all, or at least only something to showcase the technological capabilities.  In other words, unless you are one of the patent holders, beware the start-up that isn’t worried about PMF or working toward figuring out how to make a product people or companies want and marketing it. 

The Believer

I was struck by the foursquare case.  I really was.  And not just because my wife (an RC) is mayor of HBS, Aldrich, and Spangler Hall.  I was amazed at how dedicated founders are to the idea (at least according to the case), even more so than the company.  As an investor, I would have found this statement in the case from Crowley crazy:

And if we can’t monetize, at least we pushed the world forward a little…  That’s my aspiration, to change the world.  If this turns out to be an amazingly big, profitable business at the same time, well, that’s an added bonus.

But that statement would not sound crazy to the Believer.  The believer is an entrepreneur who follows through on an idea with tunnel-like vision and enthusiasm.  The believer can be their own best and worst enemy.  They are dogged and unwavering in their conviction.  This can often lead a start-up through hard times when funding is scarce.  It can help in persevering the chasm, the most difficult time in bringing the product to market.  However, this type of entrepreneur often finds iteration more difficult (and pivoting almost impossible) because they are so convinced that their product is great, and that people should buy the product while not focusing if they will buy the product.  Believers can be great to work with, but long-term carrier viability is a concern.

The Serial Entrepreneur

The Serial Entrepreneur is a special and rare breed; one that many MBAs aspire to become.  Here’s why being a serial entrepreneur is cool: it means you didn’t just catch lightening in a bottle one lucky time.  It means that you can create new ideas over and over.  It means you have some clairvoyance into how technology and markets evolve.  It means you are Steve Jobs. 

For those students who took Entrepreneurial Finance in their second year at Harvard Business School, you probably remember hearing the name Jeff Parker quite a bit.  I was in Joe Lassiter’s class, and we had the pleasant experience to have Jeff speak in class.  He was very candid about knowing where he fit in the enterprise creation cycle: he created news ideas to pass off.  He was not in the business to manage and nurture and medium to large business.  He got too bored.  His attention span was too short.  He always wanted to be on the next exciting adventure. 

I actually think this is the sweet spot for an MBA.  Serial entrepreneurs will have a lot of projects because as soon as one sells or fails [fast], they are off to the next venture.  There will be a lot of career iteration and chances to learn a variety of entrepreneurial skills. 

The Dabbler

This is the weekend warrior; the business plan competition participant; the person who doesn’t miss a Hack Day challenge, sometimes traveling to different cities.  This probably covers 90% of business school students in some form.  Low risk because you can work on the project in spare time, but also low value or low likelihood of success because there is a noticeable lack of full dedication.  Remember, lean start-up doesn’t mean cheap start-up.

If there are any other types of entrepreneurs, I’d love to hear some additions.  I think figuring out where you fit in is a key to finding what type of company you want to land in post-MBA.  It will also determine what types of companies you will found in the future.