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