What's Killing the American Entrepreneur?
GUEST AUTHOR BLOG: The Silent Killer of American Entrepreneurs by Joe Abraham author of, "Entrepreneurial DNA: The Breakthrough Discovery that Aligns Your Business to Your Unique Strengths."
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 that’s rarely talked about in the business community, which is why I’ve dubbed it, “The Silent Killer”. The last culprit, which is arguably the worst, is due to 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. In fact, the common mindset has been, “If it worked for one entrepreneur, it will work for every entrepreneur. After all, entrepreneurs are all the same.” 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.
Based on my study of "Entrepreneurial DNA",I found that there are four distinct groups of entrepreneurs, not just one. Each encompasses their own unique modus operandi, strengths, weaknesses, needs and buying behaviors. Here are some of the highlights from this project.
- “The Builder”, or B DNA, make up 10% 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.
- “The Opportunist”, or O DNA, make up around 30% of business owners. They are drawn to ground floor opportunities and tend to dabble in multiple industries (often at the same time).
- “The Specialist”, or S DNA, represents around 45% 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.
- “The Innovator”, or I DNA, make up around 15% 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.
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.
We found that the decisions entrepreneurs make are often tied to their primary and secondary DNA. It was also 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 to be 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.
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.
Joe Abraham is the author of, "Entrepreneurial DNA: The Breakthrough Discovery that Aligns Your Business to Your Unique Strengths."Abraham is a serial entrepreneur who has been involved in the startup and growth of over 20 companies. He is CEO of BOSIdna.com, and advisor to entrepreneurial centers and incubators around the world. You can learn more and connect with him atJoeAbraham.com.