Types of Entrepreneurs and Their Key Differences

You may wonder, why some entrepreneurs transform entire industries while others are stubborn resistors. A look at the type of entrepreneur might reveal the secret a bit – pioneers, followers, prudent adapters, or staunch defiers. A good understanding of various types of entrepreneurial mindsets will give you an idea of your type of business. This blog tries to give you an idea of the several types of entrepreneurs in the industry and their way of operating a business.

Who is an entrepreneur? 

First, let us understand who is an entrepreneur. In simple words, an entrepreneur is an individual who creates and operates his own business with risks involved. Usually, the business idea is their own or inspired by someone, which they nurture with their ideas and creativity. Entrepreneurs are daring to take up challenges and are open to changes. They see a challenge as an opportunity to grow and achieve success. Entrepreneurs are essential to the economy as providers of job and business expansion. An entrepreneurial journey adds value to the society and leaves a lasting legacy.

Read More: Difference Between Management & Entrepreneurship

What are the types of entrepreneurs?

There are 4 types of entrepreneurs broadly:

• Innovating entrepreneur
• Imitative entrepreneur
• Fabian entrepreneur
• Drone entrepreneur

Let's understand each type of entrepreneur and their mindsets.

1. Innovating entrepreneur

Innovative entrepreneurs can think beyond the box and introduce fresh, original concepts to the market. They have an inherent quality to influence people and are highly motivated and come up with breakthrough original and non-traditional solutions to challenges. No amount of hindrance can prevent them from taking chances to realise their vision and their passionate energies are focused towards constant innovation for their goods and services to offer the best. Improving business dynamics and embracing change using logic and strategy makes these entrepreneurs changemakers in their industries and society. The inventive edge of their mindsets develops new markets for them that fit their ideas into a bigger perspective.

One thing that must be noticed here is that innovating entrepreneurs can only function if a specific level of growth has been accomplished in a country and people want modifications and improvements to their present goods and services. So, innovative entrepreneurship is usually expected in developed countries but we have great entrepreneurs in our country whose ideas and ventures stand out globally.

Here are some examples of innovating entrepreneurs who have made significant contributions through their innovative ideas and ventures, influencing various industries both in India and globally.

• Ratan Tata - Former Chairman of Tata Group, he headed numerous innovations in various sectors, including the ideation and development of the Tata Nano, the world's most affordable car.
• Narayana Murthy - Co-founder of Infosys, played the main role in transforming the IT industry in India and promoting software services on a global scale.
• Kiran Mazumdar-Shaw - Founder of Biocon, revolutionized the biopharmaceutical industry in India with her innovative approach to biotechnology.
• Bhavish Aggarwal - Co-founder of Ola Cabs, he revolutionised urban transportation in India through technological innovation and ride-sharing platforms.

2. Imitative entrepreneurs

Imitative entrepreneurs are those who walk in the successful models and strategies of other effective businesses. This type of entrepreneur prevents taking risks and innovating. What has worked in the past is a business model best suited for them. It could be a product, a business model, a marketing strategy, or a mix of all these focused on the efficiency and scalability of a business with borrowed ideas rather than generating new ones. Even though these entrepreneurship models have less creativity or risk-taking affinity as innovative entrepreneurs, they still play a significant role in the economy by making the existing ideas available to a wider audience. In this way, Imitative entrepreneurs bring in a new perspective and make modifications that improve the original idea and create a valuable and viable path for new start-ups.

Entrepreneurs who mimic innovation in various aspects of their own business usually are widespread in developed countries. They also take less risk in their venture compared to innovative entrepreneurs.

You can look up for imitative entrepreneur examples in India—founders who have adapted and improved upon existing business models or ideas. Tweaking the models addressing the local markets is another interesting aspect of this entrepreneurship mindset:

• Flipkart – This company was founded by Sachin Bansal and Binny Bansal. It initially emulated Amazon's e-commerce model but customised it to the Indian market, leading to significant growth and adaptation to local consumer needs.
• Paytm – Led by Vijay Shekhar Sharma, Paytm started by imitating successful mobile payment models from other countries and adapted them for the Indian market.
• BigBasket - Founded by Hari Menon and others, BigBasket improved the online grocery delivery model from international markets to fit Indian consumer preferences and logistics challenges.
• Nykaa - Instituted by Falguni Nayar, Nykaa adopted and localised the online beauty and personal care retail model from Western markets to cater to the specific needs and preferences of Indian consumers.

3. Fabian entrepreneur

You must be wondering what a Fabian Entrepreneur is? These are slow and steady entrepreneurs who grow their companies gradually and consciously. These entrepreneurs are focused on the foundation for their ventures and work towards stability and sustainability of their business rather than quick development. They ensure their firms can prosper in the long run and cautiously evaluate the market environment and prospects to make informed and thoughtful decisions. Fabian entrepreneurs are patient and determined and take precautions before implementing any new tool or technology in their business. However, Fabián entrepreneurs lack the motivation to apply new systems and processes as they are a bit unsure of taking a headlong plunge or prefer a different unambitious path in their endeavours. They do not replicate usually but only seek it if they feel they are failing and would end up in financial damage. Fabian entrepreneurs adhere to traditional methods in their business and most of the family-owned businesses are in this model.

Example of Fabian Entrepreneurs:

• Many traditional small-scale textile businesses in India, particularly in regions like Gujarat and Tamil Nadu, have operated similarly for decades. These businesses often prefer adhering to time-tested methods and are reluctant to modernise or innovate unless necessary. They usually focus on preserving their established market and customer base rather than seeking expansion through innovation.

4. Drone Entrepreneurs

In case you ever wondered what a drone entrepreneur is, or rather who is a drone entrepreneur, here’s something to put your doubt to rest. An individual who depends on the efforts of all others is a ‘drone’. Drone entrepreneurs discard opportunities that come their way to duplicate or take advantage of them. It is surprising to notice that these business owners prefer to remain traditional in their business processes and are comfortable being with the community and surroundings and oppose change. They underperform even if that is detrimental to their business. So, in a nutshell, these individuals do not evolve as dynamic entrepreneurs. Drone entrepreneurs are considered stubborn and resist change, even when the market environment is evolving around them.

Example of Drone Entrepreneurs

• Typewriter Manufacturers: Around the late 20th century, several typewriter manufacturers in India, like Godrej & Boyce, resisted shifting to computer manufacturing or other modern workplaces even as the demand for typewriters sharply declined. Their refusal to adapt to the technological advancements in word processing and computing led to the eventual decline of the typewriter business.

While the four types of entrepreneurs cannot be compared with each other for their completely different mindsets, a comparison between innovative and imitative entrepreneurs can be drawn.

The difference between Fabian and Drone entrepreneurs is given below as their approaches are a bit similar.

Conclusion

In entrepreneurship, Innovative, Imitative, Fabian, and Drone entrepreneurs each follow distinct paths and there is no one-size-fits-all kind of entrepreneurship available. Whether it is leading with ground breaking ideas, refining existing models, cautiously adapting to change, or resisting it, all of them shape the business landscape in unique ways. Understanding these differences assists in identifying where you or your business fits, guiding you toward decisions that align with your goals and market needs. Finally, recognizing your entrepreneurial style is key for navigating the ever-changing business environment and achieving long-term success.

FAQs

Q1. What are the 4 main types of entrepreneurs?

Ans. The main types of entrepreneurs are Innovating Entrepreneurs, Imitative Entrepreneurs, Fabian Entrepreneurs, and Drone Entrepreneurs. 

Q2. How does understanding different types of entrepreneurs help?

Ans. Understanding different types of entrepreneurs helps in distinguishing the diverse approaches to business and innovation. It provides perceptions of how different entrepreneurial approaches can impact the success and evolution of businesses and industries. 

Q3. Is it possible for an entrepreneur to change their type over time?

Ans. Yes, an entrepreneur can change their approach over time. For example, a Fabian entrepreneur might become more innovative if they recognise the need for significant change in their industry. Similarly, an imitative entrepreneur might develop innovations as they gain more experience and resources.

Q4. What skillsets are essential for each type of entrepreneur?

• Innovative Entrepreneurs: Creativity, risk-taking, visionary thinking, technical skills.

• Imitative Entrepreneurs: Analytical skills, market research, adaptability, operational efficiency.

• Fabian Entrepreneurs: Risk management, patience, strong business fundamentals, strategic planning.

• Drone Entrepreneurs: Traditional business skills, focus on operational consistency, and customer loyalty.