AL #027: The Patient Entrepreneur

Two styles of entrepreneurship and a common trap Founders fall into.

I'm taking a 3-week break so this is another casual piece from me. Hopefully you enjoy this one and if not, don't worry – we’ll be back to our regular programming soon.

Start-up advice is often conflicting.

One article tells you to move & pivot, another about never quitting.

One entrepreneur prides on spotting and acting on an opportunity, another celebrates staying in a boring industry for 10 years.

One company won by rapid hiring and their sheer pace of execution. Another focused on a market that other people didn't care about.

One thought leader advocates for raising VC in all circumstances and another preaches bootstrapping for most Founders.

This conflict arises from two completely valid but very different Founder archetypes: the “patient” entrepreneur and the “impatient” entrepreneur.

As an aside – this idea has a strong analogy in the game theory of trading card games like Magic the Gathering which see competing “aggressive” and “control” strategies.

The aggressive strategies seek to win on a specific axis and end the game before long-term investments become relevant.

The control strategies focus on holding back the aggressive strategies until their own investments compound sufficiently to create an inevitable superior position.

The impatient entrepreneur

The impatient entrepreneur is the type of Founder that just needs the right idea and is confident that they can beat whatever competition is in the market.

They thrive in competitive, low margin markets with rapid customer feedback loops and short R&D cycles.

They are often very responsive to trends (you will find many working on a Generative AI start-up right now).

Their work is all consuming and likely leaves very little time for them to do anything else. They are happy to make this tradeoff, however, as winning is most important.

Their preferred exit is a sale in 2-3 years and they can execute well enough to pull it off.

The patient entrepreneur

The patient entrepreneur is the type of Founder that wants to win by having an overwhelming strategic advantage (often being very early to a market).

They thrive in nascent or hidden markets with high potential for margins, significant uncertainty and complex R&D requirements.

They often focus on one trend for a decade.

Their work is sustainable and process-driven and is focused on increasing their leverage over time through tactical hiring, systems and technology.

Their preferred exit is never. With a couple secondary transactions along the way.

A good example is Eric Barone who developed Stardew Valley.

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The reason I want to draw this distinction isn't just anthropological.

I think the most dangerous mistake a Founder can make is fail to commit to at least one of these strategies.

(Another dangerous mistake is to give a Founder from a different archetype the wrong type of advice.)

The “indecisive” entrepreneur

This is an archetype of a Founder that is torn between the two modes and as a result is following a suboptimal strategy.

They suffer from the following problems:

• They are not moving fast enough to exploit short-term opportunities as an “impatient” entrepreneur. The slowness can be driven by many underlying issues, commonly lack of experience, lack of conviction or false beliefs around methodology

• They are not committed enough to one market to reap the benefits of unreasonable persistence. This could be because they get bored of working on the same thing for too long or get easily distracted by new platforms and technologies. They often find it easy to believe in the potential of something only when many others do.

As an impatient entrepreneur, you win through sheer speed of execution.

As a patient entrepreneur, you win through an unreasonable level of long-term commitment to a market or an idea.

If you can't do one or the other, you lose.

The takeaway for Founders is to reflect on which camp they are in and double down on what it takes to succeed with that approach.

Of course, the best entrepreneurs combine both.

The Founders of Stripe are equally known for their pace of execution in the early days as they are for their strategic hold on internet payments.

But both approaches can work individually too and it's more important to start with a solid commitment to one strategy.