Because You Don’t Know the Difference Between Entrepreneur and Freelancer

Long ago I used to think that I was an entrepreneur. I thought it was enough to quit your job and work for yourself to call yourself an entrepreneur. That illusion was destroyed when I ran into some real entrepreneurs.

Working with these guys I realized we were two totally different people. They wanted to act on ideas. Sell products. Build businesses. Eat, sleep and breathe this stuff. Talk shop at lunch. Check email first thing in the morning. Close the laptop before bed.

I like to act on ideas. I like to participate in building great things. Then go for a run and get lost in the mountains for a while. Spend the day absorbing a book into my bloodstream.

In other words, I didn’t want the responsibility of starting and growing a business. I was a freelancer. Heavy emphasis on the word “free.” To call myself an entrepreneur was a joke. I’d be pulling down the rank of true entrepreneurs if I did that.

The Mistake

You ever make that mistake? Think of entrepreneurs and freelancers as the same thing?

Part of the confusion can come from how people define entrepreneurs. For example, Mayra Jimenez wrote an article in called 4 Signs of a True Entrepreneur. Here are the four signs:

  • Passion
  • Conviction
  • Lunacy
  • Need for Approval

Jimenez started a business with her husband, so she should know. But I got looking at that list and wondered why that would be exclusive to entrepreneurs.

True, those probably define some entrepreneurs. But that list also describes an NFL punt returner. A wing suit jumper. A chess master like Bobby Fischer. Battlefield generals like George Patton. Writers.

It describes just about anybody who wants to be successful (even if they never do taste success).

What Is a True Entrepreneur?

It’s not just a person who has an idea. That’s a theorist. It’s not just someone who has an idea for a product. That’s an inventor.

Rather, an entrepreneur is a person who has an idea for a product that he can build into a sustainable institution called a business.

You can be a one-time entrepreneur (Steve Jobs). Or you can be a serial entrepreneur (Richard Branson).

Who Do You Want to Be?

Somewhere I read that business writer Jim Collins was speaking to famed business thinker Peter Drucker. I believe the conversation occurred shortly after Collins’ success with Good to Great.

Collins was struggling with the idea of creating a business out of his book, namely a research, training and consultancy firm. Drucker warned him against it: a business is a beast you have to feed.

Collins went on to start the business, and so, in hind sight, that was a historical meeting between the classical freelancer (Drucker) and the classical entrepreneur (Collins).

In the end, we are either a Drucker or a Collins. We either want to build a business or work for a business. No shame in either. Just a decision you have to make.

And that is the pivotal question the potential entrepreneur must ask himself: do I want to build an institution? Or do I simply want to work for myself?

Share your thoughts.

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  1. says

    I basically agree with you here. There are differences between self employment and having a business.

    We may differ though on who we consider to be entrepreneurs. It sounds like you think a business needs a product for the owner to be an entrepreneur. But what about service oriented businesses like owning a restaurant? I definitely see a restaurant owner as an entrepreneur, because of the time commitment it takes to succeed, as well as having employees.

    What about the guy with a food truck? Or an insurance salesman who “has his own business.” Are these folks entrepreneurs in your book?

      • says

        Yes, I do have a design business, but I also have a full-time corporate job that I really like. Since I mostly take on projects on the side, my “business” is more like a freelance situation by your definition. But, in the relatively near future, I want to grow the business and run it full time, because I think — now that I’ve pondered this for a while — at heart I am an entrepreneur. :)

  2. says

    I am content to do what I enjoy small scale. I’m a writer not an entrepeneur. I love to get out in the bush and parklands of Perth Western Australia. Freedom is more valuable than money.

  3. says

    Oh man! You really hit a nerve with me on this one. I have been doing a lot of thinking about this lately Demian and this post really got me nodding my head in agreement.

    Here’s where I draw the line:

    Entrepreneurs build and sell stuff.
    Freelancers help them.

    Despite the brevity of those statements, my thoughts aren’t fully formed on the subject so I would love to hear yours or anyone else’s thoughts on that distinction.

    Perhaps a freelancer is a type of entrepreneur. If so, they are certainly an entrepreneur with a lower risk tolerance than most.

    I just know that for nearly 4 years I have been on my own and I have essentially been a hired gun. A freelancer. I really have a hankering to build something great. I do feel that I am an entrepreneur but until I build and sell something that is mine, I don’t feel I have gone all the way with it.

  4. says

    Such a great post! I’ve never thought about it before, but I think I agree. And I’m happy to build my small empire and leave it at that. No need to hire thousands of people, have my own private jet, and become a slave to my business. I prefer to build a small operation that sustains me and my family and lets me focus on the real important things in life.

    Thanks for the post!

  5. says

    Great post! I think about this topic quite a bit…. I tend to see an entrepreneur as someone who has a history of building multiple sustainable businesses, thus having a stake in more than one venture at one point in time (like as you mentioned Richard Branson). Most entrepreneurs I know are hungry for opportunities to keep building enterprises. They almost can’t seem to stop at what they love doing and they are willing to try their hand at different types of business ventures, learning from failures along the way.

    Freelancers, however, are those people that work for primarily for themselves, in their own time, doing their own thing… Most freelancers I know, work on projects or contracts requiring more specialist skills… yet the availability of work can often be inconsistent.

    I will be freelancing in 2013 whilst I work in a corporate job. I love having both a career and a few sideline projects to work on… keeps my skills and knowledge relevant and current. In reality though, I am am the quintessential entrepreneur and have always put my talent to good use, not matter what role I hold.

  6. says

    I think you nailed the definition beautifully. Pulling in freelance work while keeping your day job is a superb idea. Gives you something interesting to work on if your day job bores you, and you get the benefits and perks. Great way to build up a client list if you ever plan to go solo. Thanks for swinging by Julia.

  7. says

    I already commented on G+, wanted to throw in a couple more cents here as well. The Inc. article’s list looks about right for me, as far as it goes regarding temperament. Lunacy, DEFINITELY. Early in my Entrepreneur-in-the-Making career, I met one of my mentors for lunch. A highly successful venture capitalist (who meets me faithfully for lunch and doles out advice but has never once offered to fund one of my ventures… hmm… maybe there’s a message in there?? Nor have we ever asked, however–I am careful with my mentors. I feed and treat them well. They are worth more than almost any amount of financial backing. Maybe) who speaks on the topic of business finance and exponential growth all over the world to packed audiences, who literally wrote the book on private capital markets that is taught at major universities around the country (Pepperdine, Duke, for instance). He looked at Carey’s & my fresh and eager faces awaiting a pronouncement on our latest entrepreneurial idea, and said,

    “You’re both nuts. Crazy. I like that.”

    Yup. Definitely lunacy.

  8. says

    Hey Demian,

    I’m really late to the party, but I just wanted to say that this post really resonated with me.

    A lot of people have told me that I have boatloads of entrepreneurial potential. I could rule the world if I wanted to. I have the story, the smarts, the adaptability, and the resourcefulness to make big things happen.

    But after spending nearly a year on that path, I realized I really didn’t want to spend all day talking shop. I don’t care about changing the world. I like craft (although probably not as much as you!), but I also like enjoying my freedom to travel, have adventures, and talk to people. I like staying here on earth rather than up in the clouds.

    I’m a freelancer/consultant, and that’s okay.

    I read in the comments that you compared freelancers to mercenaries. As someone who grew up with a lot of fantasy, I love that example. I’d rather spend my time in a bunch of different battles around the world than deal with all the behind-the-scenes politics and management of a war.

    I also want to enjoy my downtime between battles!

    Thanks so much for writing this. No one really talks about this, and it’s a sigh of relief to find someone who gets what I’m talking about.

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