According to my own understanding, there are four types of entrepreneurs. The FIRST category involves natural entrepreneurs. They possess a certain enterprising gene. They are pro-active people and use a lot of initiative. From the moment they are born, they are selling literally anything of value such as meat, fish, vegetables, pop-corns, merchandise and bread.
Even when they have no capital, they will be selling something and from it, accumulate money which they build on capital and more money. Natural entrepreneurs just flow naturally in the business and rarely struggle emotionally. They are not embarrassed to do what they do and the community will know them for what they are. They are very patient and take a long time to be wealthy. When others are complaining of a terrible economy, they are focused on making money from even those finding life uncomfortable.
The SECOND category consists of those entrepreneurs possessing professional qualifications or trained entrepreneurs. Most of these are architects, engineers, IT specialists and designers. They may not initially have thought of themselves as entrepreneurs, but had special professional and non-professional skills which they translated into large businesses.
The THIRD category of entrepreneurs is that of those who have been exposed to making money through association or inheritance. You may probably be working for an Indian and you are slowly learning the skill of negotiation and selling. Over a period of time, you start your own business without fully comprehending the philosophy behind some of your business values and motivation. Others simply inherited a business from an uncle or parent and they carry along.
“What drives all these people, at the end of the day, is the business acumen – you will need to be aware of how money can be made”
The FOURTH category includes those who are a product of circumstances. They did not design their fate but fate designed them. Some respond miserably to changing circumstances but others take it as a challenge and with a good attitude. They shape a new lifestyle that they will not regret. They have undergone tough experiences of poverty and seen how others were making money simply ignited a desire to run a business.
However, such investors will have to either go to a business school or read business books. They are just waking up to the reality that money can be made. These are “man-made” entrepreneurs. They are more or less like a man-made lake in that the more they get pregnant with business information, the more the subconscious mind drives them to behave like entrepreneurs. Sometimes, they become very resourceful.
What drives all these people, at the end of the day, is the business acumen. Like someone says, “you will need to be aware of how money can be made — and then executing the strategy to deliver the desired results.” The word acumen means “keenness and depth of perception, especially in practical matters.” Those with the acumen have insight in all their activities. They develop a high level of anticipation. The first-mover instinct moves into activities that others have not seen. Those who win know the right time to engage, which is usually at the bottom of demand curve and exit or maximise value at the peak of demand. By the time others move into that line of business, first-movers driven by the appetite to exploit an opportunity would have captured the market.
A certain lady decided to invest in the mineral water business. I told her it was the wrong time to enter the market because everyone had gone into it. The first-movers had created powerful brands around that market. In the initial stages, the first-movers enjoyed higher prices and low advertising costs as there was virtually no competition. The margins were wide and they prospered. When other entrepreneurs identified opportunities for profiteering in this sector, the first-movers had engaged in very high competitive positions, and as such, they could afford to reduce prices and still break even.
Entering the mineral water market at this peak would not yield significant value. First, the advertising costs to win customers who were already loyal to another brand would be significantly high. Second, the prices would at this point be depressed already and entering the market meant attracting customers with even lower prices. First-mover insights generally lead to market domination. The entrepreneurial acumen requires great sharpness and shrewdness. In other words, there should be constant exercise of good judgment in all decisions. Borrowing at the right time and executing when the iron is still hot.