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What Is the Real Difference Between An Entrepreneur And A Business Owner? - YouTube
Channel: Dan Lok
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- Hey Dan, what's the difference
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between an entrepreneur
and a business owner?
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- Now, that's a good fucking question.
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Is there a difference
between an entrepreneur,
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and a business owner?
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Hell, yes, there's a big difference.
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Most people confuse the two.
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Here's the difference.
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An entrepreneur, by my definition,
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is someone who orchestrates
other people's money,
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time, talent and resources to
make his or her vision real.
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A business owner is
just someone who manages
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and runs a business.
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So you look at most business owners,
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you look at all these stores,
they could be a shopkeeper.
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They're running a business,
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if you talk to a typical
business owner today,
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five years later, you talk to them again,
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chances are they pretty
much do the same thing.
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They're still running the business,
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they kind of do the same thing,
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make the same kind of money,
haven't grown that much,
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maybe if they're good,
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the sales have increased
just by little incrementally.
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When you talk to an entrepreneur today,
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five years later, you talk to them again,
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completely different thing.
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Maybe they have expanded,
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maybe now they have built a
business within a business.
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Maybe now they have
invested in other companies.
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Maybe they have acquired some companies.
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Maybe they're in one industry,
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now they're leveraging
to another industry.
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So you see an entrepreneur,
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a true entrepreneur, is
opportunity-oriented.
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They pursue different opportunities.
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Usually, they are not linear.
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Usually they get involved
with different businesses
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in different sectors,
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and they have the ability to
make one business successful
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in one category, and they
would apply the same mindset,
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the same skill set, the
same team, the same system,
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to make other businesses work.
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That's the difference.
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Not that because they have
shiny-object syndrome,
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but because they have the ability
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to go into different industries
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because they know the infrastructure,
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they understand the system of
what makes a business work,
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they already have those skill sets.
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I'm going to give you an insight
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that no one else could give
to you except me Dan Lok.
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When you think of business,
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I want you to think of it
this way, input and output,
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input and output.
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A business owner, you
give them certain input
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meaning certain time,
resources, money, talent,
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the output is very very small.
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If someone is running a business, a shop,
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something like that, it could be
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they are self employed, right?
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They're using their manual
labor to make money,
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let's say a plumber, right?
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Or a landscaper, they are doing that work.
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Input, output, not much.
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Input one, output one
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or 1.2, 1.3.
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Not a whole lot.
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This is why those
businesses as an investor,
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we don't invest in those businesses,
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because the input and
output ratio is not good.
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You look at those businesses,
why they can't raise money,
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why we don't invest in those businesses,
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because the damn thing can't grow.
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It's all depending and
counting on that one person,
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that one business owner, that's not good.
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There's no team, even if they have a team,
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it's a very small team.
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As a true entrepreneur, what
they're very good at is,
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they know how to maximize that output.
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They can take an input of one,
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and they can multiply it by two, three,
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four, five, 10, 20.
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That unit of one they could maximize it.
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And this is why investors love
to invest in those companies.
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You look at Warren Buffett,
you look at Elon Musk,
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you look at Jeff Bezos,
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why people in the public market,
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why they are willing to buy their shares?
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Because they know how
to multiply that output
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with their skills.
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For every dollar that they utilize,
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for every single piece of
resources that they have,
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they can use it better
than almost everybody else,
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over a long period of time.
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They have good judgment skills.
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They make the correct decisions,
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doesn't mean they don't make mistakes,
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but overall, long term,
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they make better decisions than most.
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That's the difference.
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Business owner doesn't have the ability.
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An entrepreneur could raise money,
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an entrepreneur could attract investor,
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an entrepreneur can scale
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and put together the team, the resources
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to keep multiplying that.
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And people line-up to invest with them,
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because they know how
to maximize the dollar,
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beyond the dollar, but really,
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we're talking about the output.
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If you truly want to be more
valuable as an entrepreneur,
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as a founder, you must know
how to take the input of one
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and then maximize it to create
more value in the marketplace
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to maximize your output
and you don't learn that
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from business school, by the way,
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you learn that from experience,
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you learn that from a mentor,
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you learn that from School of
Hard Knocks, from experience,
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and that's what you want to do.
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