What is the silent killer of American entrepreneurs, and what does DNA have to do with it? Joe Abraham explains.
A recent study released by the Bureau of Labor Statistics shows a troubling trend. The study found that the number of self-employed individuals in the US has shrunk by 2.1 million since 2006. What’s driving this trend? What does it mean for entrepreneurship? Most importantly, how is this decline impacting our economy?
The most talked about suspects influencing this downward shift in American entrepreneurship include:
- The real estate boom (and crash): Bottom line, many entrepreneurs lost their livelihood when the music stopped.
- The “disappearing act” of small business bankers: As bankers reeled from their mounting losses and toxic assets, there was a race to mitigate risk. In a classic case of "throwing the baby out with the bath water", banks all but shut off the money supply to startups and small businesses. This took a ton of entrepreneurs out of the game (but hopefully just for the short term while they reinvent themselves).
- Economic and regulatory uncertainty:Continued worries about the global economy along with government regulations have hindered entrepreneurs’ capacity to manage financial risk.
My team and I have discovered another root cause of the downward entrepreneurial trend and it’s rarely talked about in the business community, which is why I’ve dubbed it, “The Silent Killer”. The culprit is the pervasive old-school entrepreneurial mentality.
In my work studying the traits of thousands of entrepreneurs, I found that the leading cause of frustration and failure in the self-employed community is the one-size-fits-all approach to entrepreneurship. For centuries entrepreneurs have been placed in one box. From business planning and finance to human resources and marketing, experts have taught on the archaic assumption that all entrepreneurs are the same. The common mindset has been, “If it worked for one entrepreneur, it will work for every entrepreneur.” But is every entrepreneur really the same? Sure, we can intuitively deduce that not everyone is a “Richard Branson” or a “Donald Trump”, and not everyone innovates like the late Steve Jobs, but are the rest of us the same when it comes to starting and growing our own businesses?
In contrast to this old-school mentality, I found that each entrepreneur is wired quite differently, having different strengths and weaknesses. “Entrepreneurial DNA” has a huge impact on the type of business one should start, how one should run that business, who should be on their team and what business model is best to deploy. Essentially, your Entrepreneurial DNA has a major effect on your success as a business owner.
Old-school entrepreneurship didn’t care about how the entrepreneur was wired. It assumed one could walk up to a buffet of business strategies served up by gurus, educators, experts and consultants, try a bit of everything, and see what works. That is where the systemic frustration, which we see now in the entrepreneurial community, comes from.
Entrepreneurial DNA challenges that notion by proving that not all entrepreneurs are the same. The fact is, Donald Trump, your lawyer and a multi-level marketer can’t be put in the same entrepreneurial box. They didn’t go into business for the same reasons; they do not operate their businesses alike. They certainly don’t have the same vision and exit strategy. They represent three completely different entrepreneurial DNAs; each with their own unique modus operandi.
Based on my study of Entrepreneurial DNA, I found that there are four distinct groups of entrepreneurs, not just one. Each encompasses its own unique strengths, weaknesses, needs and buying behaviors. Here are some of the highlights from this project.
- The Builder, or B DNA, makes up 10 percent of business owners. These are the individuals who create highly scalable companies and grow them to millions (and billions) of dollars in revenues, almost effortlessly. They are built to deploy high-growth systems and lead large teams. A builder would say, “I find it easy to conceptualize new business ventures. I can put together the business plan, funding, management team, and operating plan fairly effortlessly.” They are accused of having a “type-A” personality, are 24/7 when it comes to business, and usually have a hard time with work-life balance.
- The Opportunist, or O DNA, makes up around 30 percent of business owners. They are drawn to ground floor opportunities and tend to dabble in multiple industries (often at the same time). An opportunist would say, “I love the idea of working hard for a window of time, making a fortune, and then living the life thereafter.” They are also optimists through and through. They like finding deals, laugh in the face of risk and find it hard to focus on just one business for too long.
- The Specialist, or S DNA, represents around 45 percent of all business owners. They go through years of schooling, apprenticeship or on-the-job training to develop expertise in an area. They tend to pick one industry and stay in it for 10-30 years. A specialist would say, “I don’t consider myself a ‘big dreamer.’ I am more conservative and methodical in my business growth plan.” They are risk adverse, highly analytical when it comes to making decisions, and despise cold calling and prospecting.
- The Innovator, or I DNA, makes up around 15 percent of business owners. These are the mad scientists. They want to change the world with their innovation. They would much rather be in the lab of their business than in the office or at the cash register. An innovator would say, “My No.1 goal is to get my product/service to as many people as possible so it can change their lives.” They get frustrated with the “business” side of business, would much rather be in the “lab” than behind the desk. They are trusting and loyal, sometimes to a fault.
Our study also found that the decisions entrepreneurs make are often tied to their primary and secondary DNA. It was interesting to learn that unlike personality profiles, one’s entrepreneurial profile (BOSI profile) changes and shifts over one’s entrepreneurial journey. We also discovered that when entrepreneurs implement best practices of opposing DNA types they struggle and in some cases, fail. For instance, some entrepreneurs are behaviorally built to generate new business using an employed sales force. Others are much better suited for referrals through networking. Some are behaviorally “social” so they thrive with social media. Others spend thousands of dollars to implement a “social media blueprint” but struggle to get follower #38 on Twitter.
Bottom line, we’re different. So when it comes to business building, one size does not fit all. Entrepreneurs come in different breeds. For centuries we’ve told the beagles of the entrepreneurial eco-system tobe fast like the greyhounds. We’ve told the golden retrievers to behave like the pit bulls. It hasn’t worked – and it won’t work. Despite massive improvements in technology and access to support, failure and frustration rates in entrepreneurship are stagnant or even growing.
Knowing your Entrepreneurial DNA allows you to filter decisions, people and solutions to find the ones best suited for you. It’s a guideline for best practices tailored to your strengths and weaknesses as an individual. You can find out which type of Entrepreneurial DNA you have by taking a free test, available at www.bosidna.com.
The whole intent of this process is for you as an entrepreneur to say, “Maybe, just maybe, I am a football player who is trying to act like a soccer player.” Discovering your entrepreneurial DNA will give you the freedom to excel in areas in which you are gifted. You’ll leverage your strength to gain market position and give yourself permission to say “No” in other areas. You’ll thankfully release the death grip on the steering wheel of some areas of your business and reap the benefits of doing so.
The discovery of Entrepreneurial DNA is one of the missing links to success in entrepreneurship. Budding entrepreneurs, seasoned entrepreneurs, educators, service providers and business-to-business companies need to dig in, learn about it and update their plan of attack to leverage it. If we act on this new information and apply it across the entrepreneurial eco-system, I have no doubt we will see a systemic lift in the failure and frustration rates in entrepreneurship in this country. That means more successful business ventures, higher employment rates and greater prosperity for our nation and others around the world.
An entrepreneurial strategist, Joe Abraham has been involved in the startup and growth of over 20 companies during his career in industries from IT, healthcare and wellness, to motorsports, financial services, and online marketing. A serial entrepreneur, Joe started his first company Cornerstone International at age 23. He is author of the new book Entrepreneurial DNA: The Breakthrough Discovery That Aligns Your Business to Your Unique Strengths(McGraw Hill 2011) and is currently the CEO of BOSIdna.com.