21st century entrepreneurs have a lot in common, but there are many types of entrepreneurs, and they all start out with different goals.
Small businesses and start-ups
In modern language, a ‘start-up’ is a business in the early stages of development. These businesses are started by one or two entrepreneurs who take on the full risk of failure and, if the business succeeds, the reward. The costs of a start-up are often high upfront, which is why some look for investors such as venture capitalists.
‘Small business entrepreneurship’ is a type of entrepreneurship where a small business is opened without the intention of starting multiple locations or expanding. Those who start small businesses typically invest their own money instead of needing major investors, and often live off their business’s profit.
A business itself is an organization with the purpose of providing goods or services for profit, although non-profit organizations can function as businesses as well. There are many types of businesses. An LLC, or Limited Liability Company, is a more modern business structure. This business structure keeps the owners of the business from being personally responsible for the debts of the company.
Types of entrepreneurs
Entrepreneurs start businesses of various sizes and are responsible for bringing new ideas and innovations to every economy. But not all entrepreneurs are created equal, and there are many different types of entrepreneurs.
The type of entrepreneur a person becomes depends mainly on their goals. One example is an innovator. An innovator is the type of entrepreneur skilled at coming up with unique ideas and implementing them in a way that hasn’t been thought of before.
Some examples of innovators are Thomas Edison, Steve Jobs, and Mark Zuckerberg. Thomas Edison is most well-known for the invention of the lightbulb, but he was also a skilled entrepreneur. Edison spent many years in the telegraph industry, and much of the entrepreneurial work he did stemmed from his experience there. By the end of his life, Edison owned numerous businesses in industries from cement to phonographs.
Not all entrepreneurs work to improve society or impact social change in the world. Certainly, there is an aspect of entrepreneurship that is intended for personal gain. It would be difficult for many of the world-famous entrepreneurs to push as many boundaries as they did without the motivation of profit.
Social entrepreneurs, however, are entrepreneurs who focus specifically on business opportunities that have a positive impact on society whether globally or in their local community. This doesn’t mean there isn’t a profit involved for the entrepreneur. Unlike a non-profit organization, a business founded by a social entrepreneur attempts to gain a profit while also making a difference. Although there are many businesses who do make an impact in this way, there are also for-profit businessmen who attempt to claim the title of social entrepreneurship in an attempt to gain a larger profit.
One-for-one Social Entrepreneurship
TOMS was one of the first companies to popularize social entrepreneurship. TOMS founder Blake Mycoskie says the idea for TOMS shoes came to him while traveling in Argentina. After meeting an American woman helping out at a shoe drive for children, he saw a need for underprivileged kids. Out of this experience, TOMS, originally named ‘Shoes for Better Tomorrows,’ was created.
TOMS has a one-for-one model to address the need Mycoskie saw. For every pair of shoes purchased, TOMS donates a pair to someone in need. As of 2020, 100,000,000 pairs of shoes have been donated. In 2021, TOMS began donating ⅓ of their profits to grassroots organizations working to improve their communities.
Key entrepreneur: Mark Zuckerberg
Mark Zuckerberg is known mostly for co-founding the social media site, Facebook, but creating Facebook wasn’t the first time Zuckerberg used his entrepreneurial side to innovate. In fact, he had been writing software since junior high. By the time he started school at Harvard, he was already known for his programming skills.
Facebook originally began as a site for Harvard students. It later expanded to other colleges and was eventually opened to all. By 2012, Facebook had one billion users. But the controlled growth and expansion of Facebook was not a coincidence, and the decision to gradually open up the site is what contributed to Zuckerberg’s success.
Facebook launched in 2004 but wasn’t open to everyone until 2006. The gradual growth of the social media site led to increasing interest from both potential users and investors. By the time Zuckerberg created Facebook, many social media sites had already come before, but Facebook was able to avoid some of the technical issues other sites faced by restricting its users in the beginning stages and focusing on building a reliable infrastructure.
Key entrepreneur: Elon Musk
In 2022, Elon Musk became the wealthiest person in the world, according to the Forbes Billionaires List. But even though he started coming up with unique ideas from a young age, his success didn’t happen overnight.
From 1995 to the modern day, Elon Musk co-founded X.com, which later became Paypal, founded SpaceX, became the chairman of Tesla, and founded the Boring Company. Throughout his career, what has made Musk a successful entrepreneur is his drive to continuously innovate and strive for greater opportunities.
Musk’s first startup was Zip2, earning him over $20 million before the age of 30. But he took his earnings and invested them in his next project, X.com. With each new project, Musk came up with solutions to questions about financial services, transportation, and space travel. But if he had not invested his money wisely throughout his career, most of his life’s work wouldn’t exist.