Rise My Venture content writer Shreyashi Chakraborty currently pursuing Masters in English Literature has written an article on “What Type of An Entrepreneur Are You?”.
Typologies are widespread in entrepreneurship and they have played an important role in the development of the field. Entrepreneurial ventures differ widely and typo-logical theorizing provides a method of understanding this diversity. This theorizing extends over a wide range. Several theorists have posited their divisions. Smith draws on the writings of Collins and Moore from their book “Enterprising Man” and divides entrepreneurs into craftsman and opportunist types. Opportunistic entrepreneurs are expected to head adaptive firms which tend to grow more rapidly. Craftsman entrepreneurs head rigid firms which exhibit less growth. However, Peterson and Smith in 1986 conclude that opportunistic entrepreneurs do not always foster company growth and craftsmen impede it. This led to the birth of a third type namely the inventor entrepreneur.
Finally Bird amalgamates the views of Miner, Smith, Bracker and Liles with the typology advanced by Vesper(1990) and doles out the following 11 types:
1. Solo Self-Employed Individuals – Mom and pop stores, trades-people and professionals who operate with very few employees.
2. Team Builders – Individuals who gradually build an organization incrementally by hiring and delegating.
3. Independent Innovators – Inventors who create an organization to market an invention in the mode of high-technology start-ups.
4. Pattern Multipliers – Those who utilize a pattern over and over again to expand through franchising or chain operations.
5. Economy of Scale Exploiters – Entrepreneurs who reduce prices by increasing volume and thus keep the competition out.
6. Capital Aggregators – Financial specialists who put together large front-end capital accumulations to establish their ventures.
7. Acquirers – Purchasers of a going enterprise or family business entrepreneurs who take over from a previous family member.
8. Buy-Sale Artists – Turnaround artists who take over struggling firms, revive them, and sell them at a profit.
9. Conglomerators – Acquirers who use the assets of one company to obtain control of another, often diversifying into unrelated business.
10. Speculators – Investor in fields such as real estate who use these assets to leverage further investments, with or without development of the assets, to be sold later at a profit.
11. Apparent Value Manipulator – The classic arbitrageur who repackages, redefines, or restructures to add apparent value for resell.
But these typologies ignore the psychological aspect of the entrepreneur, concentrating wholly on the ends of it. Thus the need to establish psychological definitions of types has been recognized. Langan Fox and Roth’s taxonomy focuses on achievement motivation, taking into account the psychological typology.
The Langan-Fox and Roth (1995) study identified the following types:
1. Managerial Entrepreneurs – Although low on achievement motivation, these entrepreneurs are high on the ability to influence and exert power, and resistance to subordination; they have an internal locus of control, considerable job satisfaction, marked activism, a tendency to plan their careers and little trust in others.
2. Pragmatist Entrepreneurs – Generally these entrepreneurs are in the middle of the psychological variables; however they have a pragmatic interest in passing the business on to children and in making more money.
3. Need Achiever Entrepreneur – These are the real personal achievers exhibiting a pre-dominant achievement motivation; managerial characteristics are at a minimum.
Thus such typologies and taxonomy, proposed by various reviewers, gives an overview of the entire milieu of the entrepreneurs who dominate the market. It is obvious though that these divisions are not absolute and an individual may well be a concoction of more than one type.
This article has been well researched by Rise My Venture team.