Types of entrepreneurship every aspiring business owner should know

Merriam-Webster defines an “entrepreneur” as “one who organizes, manages, and assumes the risk of a business or enterprise.”¹ But a more current understanding of entrepreneurship might expand to include a general mindset that favors innovation, can tolerate some risk, and seeks out ownership and accountability.²

The definition expands further when you consider that there are almost as many different varieties of entrepreneurs as there are new business opportunities.

What are the types of entrepreneurship? From the traditional small-business owner to the corporatized “intrapreneur,” the many categories of entrepreneur represent different skill sets, career paths, personalities, and preferences.³

And for aspiring business owners, understanding the different types of entrepreneurship can help you better plan the shape and trajectory of your career, since the skills and expectations of a boutique owner will differ from those of someone preparing to launch a killer app.

Plus, if you’re considering boosting your qualifications and experience with an elite graduate degree such as the online MBA from the University of Kansas School of Business, differentiating the various types of entrepreneurship can help you figure out which courses and modules align best with your career ambitions.

This article presents an overview and examples of several categories of entrepreneurship to help illustrate some of the options open to those interested in following this enriching career path.

Small business entrepreneurship

Small businesses are those with fewer than 500 employees. In most developed countries, they’re a crucial component of the national economy. U.S. census data analyzed by the Small Business and Entrepreneurship Council showed that small businesses have accounted for “62% of net new job creation [in the U.S.] since 1995.”⁴

Ranging from your local independent bookstore to mid-size law firms and even small factories, small businesses are everywhere, attracting entrepreneurs from a range of backgrounds.

The barriers to entry are perhaps lower for small businesses than for some other types of entrepreneurship. Reduced risk can mean reduced reward, as many small businesses stay small since they are limited by the scope of their operations.

Scalable startup entrepreneurship

Scalable startup entrepreneurship is a modern variant, inspired by the new business opportunities afforded by rapidly advancing technologies.³

As high-growth, innovation-led ventures that aim to change the world, scalable startups are often tech companies relying on venture capital to get off the ground. This is where you’ll find the "decacorns": Startups valued at more than $10 billion, such as Grammarly and Stripe.⁵

The potential risks and rewards are as massive as their ambitions.

For example, Spanx founder Sara Blakely famously put her life’s savings into her idea, got rejected by almost every manufacturer she approached for partnership, and had to hand-sew her first prototypes.⁶ In 2012, Forbes named her the world’s youngest self-made female billionaire.⁷

Large company entrepreneurship (intrapreneurship)

Big businesses prize entrepreneurship and innovation. Some giant companies, such as Google, are innovation factories, dedicated to making new and disruptive products. Others, such as McDonald’s or Disney, develop new products or enter new markets to drive growth and evolve their operations.

The development of products such as Amazon Prime—an employee-driven idea that was allowed to grow—inspire large companies to mine their ranks for innovation. Building an entrepreneurial corporate culture often comes down to committing to learning from mistakes rather than trying to play it safe with the tried-and-tested. This means giving employees the time and freedom to take risks and absorb the occasional failure.⁸

Many MBA programs study what it takes to be an entrepreneur, as the skills and mindset are applicable to almost all leadership roles in business, and the ability to think and act independently is an essential element of professional development.

Social entrepreneurship

Different entrepreneurs have different motivations. For some, the priority is solving social or environmental problems.

Social entrepreneurship blends profit with purpose. Successful social entrepreneurs include people like Blake Mycoskie, who donates profits and shoes to good causes through his company, TOMS Shoes, and Boyan Slat, who founded The Ocean Cleanup to reduce ocean plastic by 90% by 2040.⁹

Approaching its 20th anniversary, TOMS has made more than $200 million in grants and shoe donations since it was founded.¹⁰

And to date, The Ocean Cleanup has removed more than 42,000,000 kilograms (roughly 92,500,000 pounds) of trash from the world’s oceans.¹¹

Innovative entrepreneurship

Innovative entrepreneurship focuses on developing unique ideas, products, or services. This is often a business motivated by creativity or disruption of established thinking, such as Canva’s user-friendly, “freemium” design software.¹²

Tech, biotech, and green energy are markets where innovative entrepreneurship often proliferates, since these are sectors substantially driven by the desire to address unmet needs or improve existing processes.

Hustler/solo entrepreneurship

Today’s proliferation of freelancing opportunities, plus the relative ease with which small businesses can connect with customers via the internet, has given rise to the phenomenon of the side-hustle and the hustler entrepreneur.³

Hustler entrepreneurship describes those businesses driven more by sweat and persistence than lavish startup funding, as well as all those people who balance a day job with a passion project or side hustle.

Buyer and opportunistic entrepreneurship

Some entrepreneurs aren’t interested in starting their own ventures but are excited to invest in other people’s ideas, providing business capital in exchange for a role in the company. This is the entrepreneurship of the venture capitalist or serial business owner. If you have the financial resources to buy into a developing business, then opportunistic entrepreneurship might be for you.¹³

Which type is right for you?

How many entrepreneurs are there in the world? The latest Global Entrepreneurship Monitor report estimated more than 650 million worldwide.¹⁴ That’s a vast group with a large array of skills, preferences, and ambitions.

To figure out what sort of entrepreneurship might best fit your own talents, it can be helpful to ask yourself a few questions, such as:

• What is your tolerance for risk?
• Is there a purpose or idea you want to advance through entrepreneurship?
• Do you want to manage others or just work for yourself?

Follow your entrepreneurial path with an online MBA from the KU School of Business

From intrapreneurs inside massive multinationals to side-hustling solo entrepreneurs, there are entrepreneurship types and pathways to suit nearly every personality or vision.

Find the right path for you with an elite, flexible graduate qualification. The KU online MBA offers in-depth preparation for business leadership along with flexibility for working professionals who need to sustain their careers while investing in their future. Explore our curriculum and admission requirements online. When you’re ready to discuss next steps, schedule an appointment with one of our admissions outreach advisors.