Shortlist Digest: Entrepreneur vs. Business-person?

Originally appeared in the monthly Shortlist Digest here: https://mailchi.mp/c5cdd3d60947/shortlist-digest-december-1795405

As we hear news about the slowdown in VC funding in the US, and questions about a similar cooling of the African tech ecosystem, I was thinking about a piece I wrote pre-pandemic on differences in the connotation of the terms “entrepreneur” vs. “business person.” The original can be found here, but pasting most of the text below as it may be even more relevant in these strange times…

I was having coffee with an investor the other day, and we got into talking about the need for more “business people” in our Nairobi — and perhaps global? — startup ecosystem. Initially, I didn’t quite understand what he meant, but our conversation prompted me to wonder if there were ways to distinguish business people (i.e., commercial leaders in traditional businesses) from entrepreneurs (i.e., venture-backed empire-builders), even if, admittedly, there may be more overlap in that venn diagram than divergence. But as I considered what the idea of a business person means to me, it seems we could use a few more of these types out there…

How might we distinguish?

A business person deeply cares whether the money they’re making adds up to more than the money they’re spending. An entrepreneur often takes pride in having grossly negative unit margins in service of growth.

A business person only raises money when they absolutely must, and considers it an admission of failure to ask people to fund their losses. An entrepreneur chases money as an end in itself and celebrates every fundraise as a significant milestone.

A business person is often obsessed with quality, strives to under-promise and over-deliver, and takes great pride in their work and reputation. An entrepreneur often fakes it ‘till they make it, moves fast and breaks things, and loves to quote Reid Hoffman: “If you’re not embarrassed by the first version of your product, you’ve shipped too late.”

A business person cares about doing the quiet, hard work of building their company, often preferring to stay under the radar as long as possible. An entrepreneur often leads with public storytelling, press-chasing, and award-seeking as a precursor to execution.

A business person invests in a team of trusted, longstanding teammates who can grow with the company at a natural pace, carry culture forward, and mentor new people. An entrepreneur often views their team as a resource to be exploited, alienating teammates who don’t fall into line and demonstrate 24/7 commitment.

A business person usually considers their business a long-term investment and hopes the business can sustain their family and lifestyle for a long time to come, promising autonomy, cashflow, and fulfillment. An entrepreneur is often sprinting as fast as possible to an exit, trying to stay one step ahead of burnout.

A business person usually builds locally, at a human scale, with an appreciation for the importance of community and giving back. An entrepreneur often starts with ambitions of world domination, looking beyond their “stepping stone” launch market from day one, eager to expand as soon as possible.

Neither of these is better, and at various points in my journey I’ve been both — sometimes in the same day! But I think it’s more important than ever for founders to be intentional about what kind of company you want to build, and what kind of leader you want to be…