Are you a born entrepreneur or would you be happier as a freelancer?
Should I give up the relative security of being a freelancer and launch my own startup
? That’s a question I’ve been asking myself for the last few months.
Before making such a decision I thought it a good idea to think about what other possibilities there were; before becoming a freelancer I was a “normal” employee, giving three options already. After some reading I can add two more to the list: The entrepreneur and the solopreneur (I’ll get into what each means in a bit).
Which of these would work best for me? And which would work best for you?
First, what do the different options entail:
Employee: You work for a company and you are one of at least a few people doing so. You could be the janitor, a senior manager or anything in between. This might not be for life, but for the foreseeable future you can expect to get a pay-check every month.
Freelancer: You work for yourself, but you sell your hours to a company. If there is no assignment, you don’t get paid. In general you can compensate for this by asking more for an hour than you could as an employee.
Solopreneur: This is a concatenation between solo and . You have a company, but you work on it alone. You might outsource some work (e.g. production), but you don’t have anybody working for you directly. The big difference with a freelancer is that you sell a product and not your hours. If nobody’s buying, you’re not earning. On the other hand, if business is going well, you are not constrained by only being able to sell an hour once.
Entrepreneur: Like the solopreneur, but with one or more employees. This means taking on additional responsibility (those people need to be able to buy food!) but it also increases how much can get done (and thus sold!) by orders of magnitude.
In a number of recent blog posts I’ve been talking about launching a startup. According to the definition above this would mean going for venture capital. That however is not specifically what I had in mind. It might be a good idea at some point, but maybe bootstrapping actually works equally well. Perhaps I should write about “starting a company”, but “startup” sounds so much more interesting…
Startup founder: This is the high-risk, high-reward version of the entrepreneur. Using boat-loads of “other-people’s-money” (i.e. a venture capitalist’s) you attempt to capture a huge market. If it works, you’re rich, but the chances of this working are slim.
Of course there are overlaps between different options. Many people call themselves freelancers when they’re selling a product (e.g. a website). And any fledgling company could be called a startup without having to go for venture capital. For our purposes however we’ll stick to the outline above to make it clear what we’re talking about.
The next step is to select a number of dimensions on which to score the different options. I’ve chosen the following:
Safety: How likely are you to fail big-time, having to give up, perhaps sheepishly go back to what you were doing before?
Excitement: Will there be something new every day, lots of things happening, having to make choices in the blink of an eye?
Travel: Can you be off to explore the world, or do you have to stay at home to make sure that things continue ticking along?
Creativity: How much of your creativity can you unleash in your work?
Free time: Do you work 9-to-5 (or less) or is your work all-consuming?
Steady pay: Are you getting a pay-check every month, or are times of riches interspersed with times of going hand-to-mouth?
Potential upside: If things go really well, are you going to be slightly or massively better off?
Teamwork: Are you working alone or is the work inherently done together with other people?
Learning: How many new skills and how much knowledge will you be picking up over the course of time?
The following table gives an overview of how I scored the work styles on each of the different dimensions (using a 1 to 5 point scale):
A few notes on the values:
Travel: As an employee you are mostly limited by vacation days, whereas as an entrepreneur / startup founder it’s the sheer amount of work that needs to be done. A freelancer or solopreneur can decide to leave things be for at least a little bit (though obviously this will depend on circumstances).
Steady pay: Here the startup founder gets more points than the solopreneur and entrepreneur: If things go decently, you can get access to outside capital which means you start paying yourself without having to completely bootstrap the company to profitability (like the solopreneur or entrepreneur).
The last step is scoring yourself on each of the dimensions (1: not important, 5: very important).
Below are what I find important (left most table) my scores (center table) and how that ranks me for each of the different work styles (bottom table):
According to this, being an employee is the worst choice for me and being a solopreneur is almost as bad. The best choice is a startup founder, followed by being an entrepreneur.
If after testing yourself you are are convinced that you should be starting for yourself, maybe you should consider joining me
If you’re interested in testing yourself, you can download this excel spreadsheet
and fill in your own preferences (obviously this is for entertainment purposes only. Please don’t make any decisions based on an excel sheet you downloaded off of the internet!).
If you do, I would love it if you could post a comment on what came out for you.
I’m Bastiaan. This blog is meant to give you some insight into the things I run into and perhaps to inspire you to go in search of your own life extraordinaire.
If you enjoyed this (or another) post, if you have something to add or to ask, I would really appreciate it if you would leave a comment!