What is the myth of the “Lone Wolf” entrepreneur?
There is a stereotype that many successful entrepreneurs like to work alone and hence the term coined: “lone wolf” entrepreneur. Over the last decade, a trend of the “solopreneur”, (solo-entrepreneur), has gained momentum. These are entrepreneurs who work on their own without staff or partners. Whilst, the solo or “Lone Wolf” entrepreneur is quite common in early-stage enterprises, as the enterprise grows it tends to employ people.
This phenomenal rise of the solopreneur has largely been due to a number of factors including the advent of the “gig” economy, and also other considerable factors, such as the challenges of businesses being able to find talented staff, and the low cost of technology, (including more affordable automation, and the ease of availability of virtual services). Furthermore, employment conditions in most advanced countries have become so complex, that employment provides many additional costs and regulations for enterprises, including complex termination conditions, OHS, taxation, superannuation, etc.
Whereas, the “gig” economy provides temporary and flexible jobs that have become commonplace with companies, which now tend to hire independent contractors and freelancers instead of full-time employees. This has allowed companies to side-step many of the employment challenges faced, (as discussed above). In the “gig” economy, there are four tribes including the “Digital Nomad”, the “Fly-In” Worker, the “Autonomous Worker”, the “Digital Valet”.
Most of the “gig” economy is driven by a combination of need and opportunity, and has surfaced largely due to the advent of the “Sharing” economy (e.g., Facebook Uber, Air BnB, etc.). Interestingly, in a recent TED video, there was also a claim that 43% of American full-time workers have a side- hustle. Whilst in places like the UK, Singapore, and the Philippines, more than 50% of the workforce reported having a side gig in addition to a main job, (source: TED), which seems to be more likely a combination of need and opportunity for participants.
Whilst, there has always been a tendency for entrepreneurs to be more independent, according to Global Entrepreneurship Monitor (GEM) (2019), (which monitors entrepreneurship globally), solopreneurs, however, only account for 9% (on average), of non-early-stage enterprises, globally. This research directly conflicts with the current trend of solopreneurs, which is as high as 53% in places like Brazil, where entrepreneurs do not even intend to employ anyone as they grow. Even the Netherlands has a relatively high-rate of solopreneurs at 23% (Source: GEM 2019). Whilst in the USA, (and similarly in Australia), 62% of small businesses don’t have any staff (Source: Source: Babson (2019)). So, are they entrepreneurs or just small business owners buying themselves a job?
Well, I guess it depends on how you define an entrepreneur. The general consensus of many entrepreneurship researchers is that it can loosely be defined as someone that has started a business and wants to build and grow it, and not just creating a job for themselves.
Furthermore, successful entrepreneurs need business partners and social networks to succeed. Some examples of successful business partnerships include Apple: Jobs and Wozniak, Microsoft: Gates and Allen, Google: Brin and Page, and Facebook: Zuckerberg, Moskovitz, and Hughes.
Successful entrepreneurship also requires strong social networks and an entrepreneurial “eco-system”, (which I will address in an upcoming article). Another interesting side note is that technology or product development companies have a much higher chance of success if the founder or co-founder is a “techie” (such as a programmer) or an engineer. The main reason for this is they are able to make “real” time changes to their coding or products as they receive feedback from their customers. This allows for quicker pivots, and quicker market entry, as well as maintaining control of the intellectual property. Something to consider if you are looking at starting a technology or engineering company.
Whilst, many become solopreneurs because they are just buying themselves a job, or running their enterprise as a side hustle, not all are in this position. Some do it because they want additional freedom and lifestyle.
But being a lone-wolf or solopreneur is not as scary or lonely as it used to be, due to the facilitation of new networking activities and meetup groups, etc., that cater to this phenomenon. Today, many of my clients are now turning to solopreneurship, and using automation and virtual assistants, not only to remove the headaches of employees but also to significantly raise their net profit margins from 60% to some cases 80%, (compared to many businesses who are only able to achieve 15-20% net profits in most cases).
These solopreneurs are able to build multimillion businesses by carving their own niches, through improved productivity and effectiveness, resulting in improved lifestyles. They no longer want to work 60-70 hours per week that many traditional business operators face, and don’t want the additional baggage of employees, whom they are often heavily reliant on for growth. No doubt if done properly, solopreneurship can lead to a bespoke success formula.
What do you think? Have you made the change to being a solopreneur? How have you adapted? What is your success story?