The Pam Paradox part 2 - Five more types who are unsuited being Entrepreneurs

Plus 2 behavioural types that will have difficulties

Doubt is uncomfortable, but certainty is absurd

Voltaire

In my last blog I introduced the concept that many people should not attempt top become entrepreneurs, and that there are some standard behavioural types that will mostly prove to be unsuccessful. My friend Pam helped me come to this important insight. There are always exceptions but in general these types have fatal flaws. You don’t normally hear about them, as most writing and podcasts about entrepreneurship overly choose and celebrate success. There aren’t newsletters entitled The Serial Unpreneur or podcasts called Small Business Failure & Incompetence.

But there should be in order to bring balance and perspective to the process of starting your own business. So let’s examine more of the types of people I have seen in my 25 plus years of being an entrepreneur.

1. Eternal Optimists: These people assume that all is for the best, everything will work out. Some of them even mention destiny being manifested. Their strategies and plans are based completely on upsides and best possible scenarios. They literally spend a lot of time thinking about growth mindsets, rather than business fundamentals. I was reminded of these types when I was out for a stereotypical Sunday drive with my wife yesterday. We went down to the southern part of the island I live on and I felt like a coffee. I said what happened to that great little café / art gallery that is down here somewhere that we can pop into. My wife looked at me and said they closed years ago. I remember visiting them and talking with the owner when they were just starting. It was summer and the place was packed with tourists and locals. She said that business has been great so far and how can they possibly miss. Evidently when the weather turns, the tourists go home, your business model disappears.

2. Quick Jumpers / The Impulsives: I see much more of this currently than in the past. Some of it I put down to the entreprenurial corn that projects an image that one cannot fail, and that taking action right away is the most important thing. It isn’t. These people often start with the most limited plans and no proper business design. They think they can work out all of the details as they go. They impulsive make decisions about starting and they carry on in this rash manner “working through the details”. They haven’t heard about where the devil is.

3. Truly Reluctant: I have compassion for these people, as often they feel that they have no alternatives but to start their own business. There was a considerable amount of this during the pandemic as jobs ended or changed significantly. This will continue to happen, as societal and technological change effects entire employment categories. The proliferation of “solopreneurs” is partly driven by these people. They can succeed if they get courageous, mindful and commmitted. But too often they are overly cautious, always having one foot out the door of their business. Nothing can be successful without most your energy being in it. (Will discuss in a future article about why this makes “side hustles” difficult to convert to full time enterprises).

4. Smarty Pants Syndrome: This is quite common, especially where people are truly expert in a product or service. They assume that their intelligence will help them and that learning about business will be a breeze, or that they can just hire all the right people. The latter only works if you are incredibly well financed, which almost no new businesses are. Significant rigorous entrepreneurial studies show that learning business fundamentals significantly improves business outcomes

5. Rigid Model Followers: This is another type of person that I am seeing more often. In this case, these people dogmatically follow some template and don’t vary off of its course, regardless of outcome. Again, I fault the poor quality writing about becoming an entrepreneur, particularly by people shilling their particular model for the business they know the best. (There is a major exception to this that is discussed below in the copycat section). Again there is significant research that shows that “entrepreneurs who are taught to take a scientific approach to building their companies, articulating hypotheses that they test through experiments, outperform those who don't.”

6. Incompatible Partners: My final type is one that is difficult to know from the outset. For most of the behaviourial types I have outlined, people with reflection and introspection capabilities can determine whether they might suffer from them. It is hard to know if your partner(s) are truly compatible because all of the discussion ahead of time doesn’t test you like the rubber hitting the road when the doors swing open (as I mix metaphors). I am a huge believer in having partners when starting a business to diversify risk and spur growth. However, incompatibility can seriously trip you up. Before I started my first consulting firm (with partners who mostly worked out), I spent over three months meeting weekly with another person to buy into their existing firm. We talked and talked. It sounded so great. We laughed and we had drinks. Within 3 weeks of starting I bailed quickly. I’m glad I realized the incompatibility early enough.

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Before bringing my look at the Pam Paradox to a close I wanted to highlight two other behavioural types that don’t necessarily lead directly to unsuccess but often make life difficult for the entrepreneur exhibiting them.

1. Copycatters: These are entrepreneurs who decide to start by shamelessly imitiating some existing small business. It is more common than you think. For instance, a new clothing store that locates in the same block as their successful competitive prototype, decorated and furnished in similar fashion, stocking clothing that is nearly identical. They then mimic each and every change by original. I think these people would be better served by opening a franchised business. This gives you much more access to intellectual property and is a very under-appreciated manner of entrepreneurship. Competing against copycatters is difficult which is why I recommend spending more time in business design to ensure that there are hard to replicate, values based competitive differentiators. There is one type of copycatter that is usually doomed to failure, and that is those using the “follow in their footsteps” strategy. You all know examples of this: locations where there have been 3 other unsuccessful restaurants in the past but because the new entrepreneur can get the fixtures cheaply they start there as well. I just scratch my head.

2. Perfectionists: There is a line between building continual improvements into your business and being a perfectionist. The difference makes all the difference to the entrepreneur. Perfectionists never have the feeling of satisfaction, they never feel relaxed, and they are always working when they aren’t fretting. You can work hard and long but without exposing yourself to the emotional issues with being a perfectionist. If you are one, I would think long and hard about starting my own business. There is a reason I read about burnout everywhere.

Thanks for reading and if you got something from this article leave a comment or share it with someone else. My next article will be longer as I will deal with the essence of entrepreneurship: “What is an entrepreneur and what about solopreneurs, subcontractors, etc. “