10 Reasons Why Elon Musk And Jeff Bezos Should NOT Be Called Traditional Entrepreneurs
An interesting fact: Thomas Edison is credited with inventing the light bulb. But his invention was impractical because it used a bamboo filament, which burned out in roughly 15 hours. It was actually Lewis Latimer that was the true architect of the world’s first long-lasting or practical version of the light bulb. He discovered that if a bamboo filament was encased in cardboard, the light bulb would last substantial longer… which brings me to today’s topic:
Should Jeff Bezos be considered an entrepreneur? How about Bill Gates or Elon Musk? I would like to know your opinion. Because in the next few minutes, I’m going to share an interesting perspective that I think you will want to hear. Actually, I’ll just tell you right now: they should NOT be considered entrepreneurs and I’m going to list several reasons why. At the end of this presentation, I’m also going to reveal who I believe are the true entrepreneurs.
Welcome to Leonard Innovation, where achieving the impossible is a regular occurrence. My name is Justin Leonard. Thank you for tuning in. Before we begin, I want to bring to your attention a free gift that I created for you called the 90-Day Online Launch Guide. So, what is the 90 Day online launch guide? If I were starting an online business, which steps would I take? Or where would I begin? The guide addresses things like how to determine what to sell, how to market your product or service, specific software you can use to grow your business… It’s quick and to the point. It’s maybe an 8-minute read. Again, this is my free gift to you. Check it out today at leonardinnovation.com/launch
Okay, now let’s continue. Some of this info is covered in my free entrepreneur course, which is can be accessed at leonardinnovation.com In the course, I introduce the leonard entrepreneur scale which ranks entrepreneurs based on knowledge and skill. I highly recommend checking it out if you haven’t. But the course poses a question that is not easy to answer. And it is in regard to prominent business owners like Elon Musk and Jeff Bezos. So right now I’m going to explain why and/or how… there are striking differences between traditional entrepreneurs and some of the wealthiest business owners in the world.
Here I created a comparison chart that depicts traditional entrepreneurship on the left, and then non-traditional entrepreneurship on the right.
So the first one: traditional entrepreneurs start their businesses with no attorney. For the others, there is always an attorney involved. Founders who choose the venture capital route may have to spend upwards of twenty thousand on attorney fees BEFORE they can move forward with their venture partners.
Next, we see that traditional entrepreneurs start their businesses with a limited budget, where usually, everything is self-funded. For others, there is a war chest. And the money from the war chest comes from venture capitalists, which are comprised of wealthy families, the one percent (actors, athletes), pension funds… basically the type of people and organizations a traditional entrepreneur would never have access to.
Next, a traditional entrepreneur makes all the business decisions. For the non-traditional group, the ideas are vetted via a team of specialists, which is sometimes referred to as a DMU or decision-making unit.
On the left, traditional entrepreneurs can’t make any mistakes. The business has to succeed or it’s over. On the right, multiple can failures occur, but any adversity is negated by way of access to capital.
Next, traditional entrepreneurs typically have only a general idea of how to run a business and make money; sometimes no manual or formal plan… at all. The others have a highly orchestrated, highly sophisticated system in place to generate income.
Okay, this next one. How many out there started off with an infusion of cash from your parents? Traditional entrepreneurs don’t get any handouts to help start the business. There is no rich dad. In comparison, the non-traditional group often has someone in their immediate family who was either an engineer or a banker.
The next one: with traditional entrepreneurship, the owner is unknown; usually there is no public persona. On the right, the CEO is essentially manufactured or propped up to create a positive public image. So, this is all by design. When Jeff Bezos first came on the scene in the 90s, I remember him being presented as the unconventional CEO; the fun CEO. This was to get the general public to view both him, and by extension, Amazon, as likeable from the start.
On to the next, with traditional entrepreneurship, the owner has to be the jack of all trades due to budget limitations. Conversely, non-traditional owners are able to hire for all positions from the start. So the sales team, the researchers, legal, engineers… and this is all because they are starting with a massive capital base.
On the left, traditional entrepreneurs must be profitable almost immediately upon starting a business. Non-traditional owners can take losses for years. This, again, is due to financial backing.
And finally, traditional entrepreneurs often choose to become business owners as an alternative to corporate life. Sometimes it’s because they need more flexibility and freedom. Getting rich is usually not the initial goal. They just want to be modestly successful. However, on this side, they are entering the game to make the most money possible. So again, money is of most importance because, well, among other things, they have to deliver a substantial return on investment to their investors.
So, as you can see there are significant differences when it comes to how a business gets started, and this is why I DO NOT believe those like Jeff Bezos or Elon Musk should be called entrepreneurs. Instead, this group is unique and should be called something else like capitalists or venture capitalists… or maybe even non-traditional business owners… anything that delineates and makes clear that there are major differences in business ownership.
Earlier, I said I would reveal who I believe are the true entrepreneurs. The ones who i believe to be the true embodiment of entrepreneurship are found in the first column: the small business owners. The ones you don’t know about. But they each, individually, have amazing stories about how they got to where they are. Most of these businesses make less than a million a year. You see… the wealthiest people in the world are often mediocre entrepreneurs. But we’ve been programmed to think otherwise. We are trained to think primarily in terms of wealth. Jeff Bezos and Elon Musk ARE NOT necessarily the extraordinary businessmen you think they are. Their actual strengths have very little to do with what I call traditional entrepreneurship. They are instead master resource allocators and task delegators. Their skills include things like borrowing ideas, delegating tasks, and hiring extraordinary talent to, one make them look good, and two, make their shareholders happy.
I hope you enjoyed this presentation. As a reminder, you can access the free 90-day online launch guide at leonardinnovation.com/launch it is my gift to you. And you can now find leonard innovation streaming on podcast platforms like apple, spotify, and google. And if you found this information helpful, please share it with a friend. Thanks again for tuning in.
