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March 1, 2021

What’s the difference between entrepreneurs & solopreneurs?

What’s the difference between entrepreneurs & solopreneurs?

Thinking of launching your own business? Maybe you’re ready to follow a passion. Maybe you want to shape your own work culture. Perhaps you’re looking to build systems that will become independently profitable, earning you money even when you’re not directly working on them.

If this sounds good, but you’re not sure what this might look like in practice, then you’re in the right place. In this post, we explain the difference between entrepreneurs and solopreneurs.

While these two groups have a lot in common, there are some important differences in how they work, how they approach their businesses, and what it takes to get started. It’s important to choose the right mindset - both for you and for your business idea.

Understanding the distinction between these working models is the first step in determining how you’ll grow your business and your brand.

The entrepreneur: big growth, big investment with one problem or product at a time

Let’s start with the more familiar term. An entrepreneur sees a problem or a gap in the market, and works to resolve it. They expand their business by selling their idea or product to investors and employees. They assemble a team of employees who work to fulfill their company’s vision. The employees create and sell the product - or they provide the actual service offered by the company.

What does an entrepreneur look like in practice

Let’s say the entrepreneur has a business idea for a new drink. They’ll focus on networking and investment rounds. They’ll work to make consumers see the product as desirable. They’ll make sure investors understand why the drink fills a gap in the market, and why it will be successful. They’ll hire a team that helps them handle the rest, with members of the team taking responsibility for other things, like marketing the product, giving customer service support, and organizing sales and distribution.

The entrepreneur builds the company by focusing their attention outward: they craft the company’s brand and its ethos. They are the public face of its success and value.

Within their company, the entrepreneur’s role is managerial. Once they’ve assembled their team, the entrepreneur keeps that team running: they delegate and oversee the work that needs to be done.

The entrepreneur’s main focus is on demonstrating the commercial value of their idea. For that reason, the entrepreneur works at a fast pace, perhaps gaining funding, employees, and (ideally) profit - at speed.

If they succeed, the company itself becomes the product. Many entrepreneurs launch their businesses with the aim of one day securing a lucrative buyout. Then, they move on to try to solve a new problem, with a new company or product. Others are happy to continue building that company over many years, work on improving their existing products and continue to provide solutions for the market.

Entrepreneurship offers the excitement of variety; a true entrepreneur will always be working towards the next idea, the next business, and the next round of investment, whether it’s in the same company or elsewhere.

This model can be high-risk, as entrepreneurs often provide the seed money to launch their company or product. At the same time, the promise of a potential buyout means it can also be high-yield. If you’re motivated by ideas, if you get energy from communicating your vision to others, and if you like to build and run teams, then you might be an entrepreneur at heart.

Think entrepreneurship is for you?

Take inspiration from those who have already found success:

Seth Goldman, co-founder of Honest Tea and best-selling author about entrepreneurship, on taking a more creative path: “I think a big mistake people make is that they assume the only way to become an entrepreneur is to work for an entrepreneurial company. But that’s not the case. You just need to do entrepreneurial things.” (To hear more from Seth on setting your own entrepreneurial agenda, listen to the full interview here).

Yunha Kim, founder of meditation app Simple Habit, on the value of your team: “The most important thing you can do early on is build a team of people who move fast, work hard, and genuinely care. Your product and ideas will always change, and your early team members will have a huge impact in shaping it.”

Guy Raz, author of How I Built This: The Unexpected Paths To Success From The World's Most Inspiring Entrepreneurs, on entrepreneurial vision: “I think most entrepreneurs, from the very beginning, have to think about baking culture into what they do. And culture and mission are sort of intertwined - right? - because it’s not just about selling a product for people to spend their money on. It’s about building something that connects with people.”

Miguel Antoinne, fashion designer and creative director of miguel antoinne, on the importance of finding the right community: “It’s totally okay for not everyone to understand your vision. Understanding this early on is how to discover and develop our deepest connections to the people, places, things and experiences that inspire our work. This is community.”

The solopreneur: sole control with ventures that build over time

The solopreneur has a lot in common with the entrepreneur. Both are building a business, both identify and respond to consumer needs, and launch products to the market. But in terms of scale, employees, and startup investment, things look a lot different for the solopreneur.

As ‘solo’ suggests, the solopreneur primarily works alone, without co-founders or permanently employed staff. They oversee and personally undertake all of the work of their company. This doesn’t mean they never work with others, though. Solopreneurs do sometimes hire freelancers or independent contractors to complete specific and contained tasks, such as designing promotional materials or building a mobile app.

But these will be temporary arrangements. The solopreneur controls and powers the company themselves. They make all of its decisions. They are their company, and for that reason, solopreneurs aren’t usually looking for a corporate buyout nor are they necessarily focused on building a big company. They can control the growth to how they like.

What it looks like, in practice

Let’s say the solopreneur has the same business idea, for a new drink. Like the entrepreneur, they’ll still need to network and work with other people, like temporary staff and freelancers, to help launch this new drink.

They’ll still work to make consumers see the product as desirable. Instead of hiring a permanent team, though, the solopreneur will work in all areas of the business. They’ll have sole responsibility for marketing the product, giving customer service support, and organizing sales and distribution. Perhaps they’ll even make the product themselves. They might hire external contractors occasionally - for example, they might hire someone to design the product label.

But in the end, they’ll make all of the decisions by themselves: where to sell the product; if they want to expand the range of products; how to market it. The scale of the venture will depend on how much they can manage on their own, but they might also add more automated streams of income (for example, by producing an e-course about beverage production, or running a virtual event about building a successful solo business).

Any money they make (less the cost of creating, marketing, and distributing the product) goes directly to the solopreneur.

Solopreneurs like the freedom and flexibility of working alone. They choose where they work and the hours they work. They have total control of their company’s priorities, and the speed at which things move. And there’s no one to manage but themselves.

Solopreneurs don’t have responsibility for their employees, but it means they shoulder all of the responsibility for their company. If you want to have a hand in _all _parts of your business, if you prefer not to manage people, and if you want to maximize your personal freedom and control, solopreneurship might be a good fit for you.

Because the solopreneur model relies almost entirely on one person’s work, many solopreneurs use automation to save time by streamlining and simplifying their work. For example, a solopreneur might use:

  • Buffer to distribute social media content faster and across more platforms.
  • Meetingbird to schedule calls and meetings with fewer emails between participants.
  • Canva to design better marketing material more rapidly.
  • Accounting tools like Quickbook to help manage their finance and automate frequent invoices
  • ClickUp to manage and automate their tasks and documents

There are tons of products out there to help people to do more and do it more efficiently.

In one sense, the scale of a solopreneur’s venture is smaller: it’s just one person, and often the initial investment is smaller. But it also depends on how you think about scale. Solopreneurs tend to stick with their company longer, and build it slowly over time. As we discussed in our conversation with Tyler Prete, owner of Rezistance Fitness and Vibes soap, “If you’re thinking of starting a business, allow yourself to take your time. This is your journey, no one else’s. Make it your own.”

As they gain expertise and a reputation in their field - advantages that are tied to them personally - solopreneurs can expand to monetize their knowledge and passion. There are lots of different ways to enter solopreneurship. E-commerce is a popular area, but personal or professional services can really pay off too. Whether it’s financial planning, fitness programs, or coaching, if you’ve got knowledge that other people need or want, then you’ve got an attractive product.

Are you more of a solopreneur?

Here’s what solopreneurs say about their work:

Melvin Figueroa, founder of Mello Multimedia, on what prompted his leap into solo entrepreneurship: “I used to see what the hiccups were in their process and their workflow...and that really was the bug that started to grow in me” (via The Solopreneur Grind podcast).

Dorie Clark, author of Entrepreneurial You: Monetize Your Expertise, Create Multiple Income Streams, and Thrive, on how to manage solopreneurial freedom: “It’s the question of [...] asking yourself, [...] once you do start to get some momentum in your business, what is the point of it? [...] Why are you doing it? And how do you make sure that the success that you’re experiencing is aligned with your goals? […] You do have that freedom; you have the freedom to make that choice, which is so powerful. But it really is about embracing that choice upfront and being clear about, here’s what I’m aiming at.” (‘How Successful Solopreneurs Make Money’, HBR IdeaCast).

Brian Clark, founder of Unemployable, on how automation promotes growth: “I always say the key to growth is not working more, it’s thinking more. You need to make time for yourself to consider strategy, to consider vision, to consider where you want to go." Clark describes the ‘unemployable’ as those with ‘no investors, no employees, [and] fantastic businesses’; those who ‘succeed big while staying small.’”

Dave Schools, creator of https://mediumwritingcourse.com/, on what it takes to keep going: “Without an office, team, or manager, it can be a little too easy for apathy to slip in. Apathy is the enemy of ambition. Your drive is crucial to survive as a self-employed person.”

Between entrepreneurs, solopreneurs, side-hustlers, freelancers and contractors, the self-employed population grows every year. It’s important to remember too that a single person can move between these roles over the course of their career, adapting and changing according to opportunity and passion.

Whichever path you choose, and however that path develops, remember: sometimes the small ideas really are the mightiest. As Brian Chesky, the co-founder of Airbnb points out: ‘If we tried to think of a good idea, we wouldn’t have been able to think of a good idea at all...you just have to have a solution for a problem in your own life’.

Now that you understand more about the differences between a solopreneur and an entrepreneur, which one do you feel is more closely aligned to you? Let me know in the comment below. I’d love to hear your thoughts.


Toria

Toria is an occasional writer at HeySummit, based in Birmingham, UK.

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