Dashboard: What Type of Entrepreneur Are You?

[Music] welcome to another 21 hats dashboard I'm Lauren Feldman and today my guest is Ami casar who is founder and CEO of multifunding Amy is an all-around expert on small business finance who has been a guest here before welcome back Amy Lauren always a pleasure to be with you my friend always my pleasure uh thanks so much for doing this I know how busy you are uh I'm especially eager to talk to you about a project you've been working on that I I know you're calling entra types I've been reading about it in your blog at multifunding a little bit uh I gather it's a methodology you've been developing to help entrepreneurs understand their entrepreneurial personalities tell us about it yeah Lauren so if you think about it I think there's a certain connotation or image of what an Entre type entrepreneur is or what the media perceives an entrepreneur to be but the reality is in my mind there's not just one type of entrepreneur so so what we've set out to do is to build a system where we can ask entrepreneurs nine questions and then hopefully they will that as after they ask those nine questions they get one of eight ENT types and I'm happy to explain the methodology to you but it will hopefully uh give them a little bit of a better sense of who they are and the choices they are making and if they can identify with that hopefully it'll let them feel a little bit more comfortable about who they are and that will give them some peace can you give us a sense of uh what are the range of types that you've identified sure so maybe before you get into the types it's it's it's important to talk about what we measure and I'm happy to if you want to even talk about some of the things we chose not to measure yeah sure one of the things we measure is how important control is to somebody so there are some people that um ultimately they might could be totally collaborative people but for them being an entrepreneur means ultimately they're the boss and nobody can fire them and they don't want to give that up and then there are plenty of plenty of other entrepreneurs who are happy to build with Partners or investors or a board of directors and ultimately if push come to shove they could be fired or thrown out and so that one degree of control is definitely one of the things we measure what kind of questions do you ask to determine how someone is thinking oh it could be questions like um how important to you is it somebody that somebody can fire you cannot fire you is that important so it's all driven around if it force with a choice would you slow down your growing your business in Li of selling equity in your business so so it's digging into how important of that really ultimately having control is to somebody do you also assess risk tolerance yes you're setting the stage that's that's the next risk to and this is something you've read in my books and we've talked about over the years and people are either risk adverse or risk flexible interestingly this can change over time and it's the one thing that people we we see people's attitudes about evolve over time but we definitely assist rest torent and the third thing we assess is Tim Riz it so we have as I'm sure you know Lauren some entrepreneurs who they see their businesses as very long-term projects and we call them builders that they see their business as a 10 15 20 year Venture and they're not interested in doing multiple businesses in their lifetime and then we have other entrepreneurs who uh are more uh we call them flippers and by flipper um they want to do this many times they love startup process they love this process of starting businesses it's hard for them to have their hand in just one business and so these are the three ingredients we measure control and the the control people we either call 51 percenters or 49ers and then we we measure risk tolerance for folks that are either risk flexible or risk adverse and we measure time Horizon for to measure to determine if someone's either a builder or a flipper so then what are the types that that emerge based on that data so there are eight types that emerge maybe I'll give you the one that are the most popular so far sure the most popular type is we call a director and a director is somebody that wants to be in control of their business that's important to them they're happy to take um good amount of personal risk um but they also don't want to do it once they want to do it multiple times and that's who we call a director so it's almost like the vision of for them building movies is almost businesses almost like having a Production Studio for developing movies they don't want to do it once they want to do it many times in their life but they want to do it for themselves not for others so that's one that's one those are the directors the next scenario we have are what we call the serial entrepreneurs serial entrepreneurs share the risks flexible and the The Flipper characteristics with directors but they're different in that they're happy to do it with uh investors or other people they don't need to be in control they don't ultimately have to have the final say and that's how we characterize a Serial entrepreneur after the directors and the serial the next type is the collaborative entrepreneur the collaborative entrepreneur is risk flexible but they uh or see it as a long-term Horizon and they don't have to be in control an example we think that would be great for a collaborative entrepreneur might be somebody who a group of friends who build a marketing agency or a Consulting agency and they're partners and they do it for a long time but they're not and they're okay that they're doing it together they're willing to take risks to do it they see it as a long-term Horizon that's who we call the collaborative entrepreneur want me to keep going I don't want to do all are those the three most popular those are the three most popular yes that's helpful tell me this what are you ammy aha I'm not the most common I'm not surprised I'm the fifth most common I'm a binocular entrepreneur what does that mean and a binocular entrepreneur means that I want to ultimately be in control and willing and I have is you know taken a great amount of personal risk for my business but I see it as a long-term project or initiative um the thought of um starting another business sort of makes me vomit I never want to go through those Tor first few years again some people love that process I I don't um I have a vision I'm building it I'm determined to do it I've been willing to take great personal risk to do it and you sort of have to take me in the parking lot and shoot me before I gave up control one of the reasons I was eager to have this conversation is I I really enjoyed a particular uh blog post you wrote in the past few weeks which I highlighted in the 21 hats Morning Report which was you talked about people who speak kind of dismissively of what they call lifestyle entrepreneurs I I hate using that term people don't necessarily agree on what exactly is a lifestyle entrepreneur but um I I think you were getting at the idea that there are certain people who think you know there's only one way to do entrepreneurship and it's to raise money and you know build as fast as you can sell flip do it again um and that's not you right yeah and that's the the Genesis actually of this project really I did a tedex talk several years ago and I never developed it called bunch of types I did it at brandise where I graduated and it was kind of launch that this was an idea and then I just decided to uh take it's the next level but the talk was called Entre profiles and then I decided that entra types was a better word for it than Entre profiles but it was based around the idea that in the Venture Community you know their entrepreneurs or serial entrepreneurs first time I met a seral woman who told me she was a Serial entrepreneur I had never heard the term before and I literally thought she manufactured breakfast cereal until I real and then for a Serial entrepreneur or a venture entrepreneur they refer to everyone else is like these cute little lifestyle businesses which in my mind they think of as a like as a prerogative term and I don't like that so I came up with the idea once when I thought about that no no no no we'll call them flippers and we'll call us Builders I like that but in fact it's more complicated than that I think and in this methodology that we've built um we see eight types and uh actually of the couple hundred people that have taken this survey so far we see a pretty nice distribution of um the different eight types it's interesting that as we were building it um one of the things that we added we initially added to the mix was measuring how important the financial success of the business was to somebody but then we decided that that was much more situational and not really something something we wanted to measure in a personality profile and I find all this fascinating and I can certainly see how this would be of value to you what's the value to an entrepreneur to find out what type he or she might be well I think we all and I know I've done this over at least for the first several years and Laur and you were there for me for some of that we have some impostor syndrome in a while in a way so I remember in those first few years when I was Bo stopping the business and struggling like hell and I had friends who were starting uh fintech or alternative lending businesses and raising multiple rounds of capital or Venture Capital some of them went public although those companies ultimately many of them busted yeah having hiring 100 200 300 people having these beautiful offices in San Francisco in New York and I would almost feel sometimes like what was wrong with me I would feel insecure in the way in the choices that I was making now funly enough my business is standing strong and some of those aren't but that's neither here nor there um I think if there is oh oh it's here okay but I think if there's a recognition and an understanding that people choose their own unique entrepreneurial path and whatever you choose is cool and be comfortable with it and go forward and be at peace with the choices that you're making I also think I think this is a lesson for me I was coaching some entrepreneurs in Omaha a couple weeks ago and they clearly could benefit from a couple $1,000 of growth capital and I put my own biases on that and I said you're crazy you need don't talk about Equity you can go get 350 ,000 from the SBA and you can stay in control of your business and you can do ABCD and and don't worry about Investors and then the next day they were actually in a group I was working with and we took their risk tolerance tests and found out that their risk tolerance was extremely low and what I was recommending to them which was putting my own biases in it was would actually have might have caused one or two of them to have a mini heart attack out of the fear and anxiety of it and not shame on me for that so if we can understand each person's kind of entrepreneurial DNA then we should be advising them and encouraging them to use tools and resources that are going to make them be comfortable that's a great anecdote really interesting do do you now ask potential clients to to take this uh these survey questions before you try to help them um we'll get there so um we're going to be presenting these surveys uh in presentations I'm going to be making at the all the EO conferences around the country in the next few weeks it'll be the first time we'll be we did some betas going live um betas online but we'll be doing them uh live and in person and we're not even 100% sure where this is going to sit yet this is all brand spanking new stuff we're working on but um I do think it will be super important and helpful for us as part of our coaching um to so so we're sure we're making sure we're not bringing our own biases to the work that we do and I think that's a biggest and toughest thing of even mentoring or advising entrepreneurs is to leave your biases at the door and help them make the choices that are good for them not necessarily what you would make in their situation along with recognizing what you just described about your own biases and how it applied to that that group that you were coaching have there been any other surprises anything else you've learned oh I I just think it's it's pretty interesting that um it's been interesting building up this I mean building up the system and going through the questions and this and that and the other but it's been fascinating to see um that um about 95% of the people who've taken this so far they say you got me you're right interesting and and they're they're identifying with the result that we're giving them um which is cool and I wasn't sure we could get there but I think we're we're there now if you take the Meyers braids which is a more complicated survey that we've built um that actually leads to 16 different profiles uh we've come up with eight um are we will we evolve it from here maybe but I think this is a great place to roll it out and see how we go where can someone go if they want to learn more about this Amy so that's a super good question we hope that this will initially land at multifunding docomo types but we're not live yet but we hope to be live in a few days cool if it doesn't go there let me know and I'll drop it into the Morning Report 100% so um it's pretty interesting we to get the well I'm not going to go through the Tech nuances that we had to do to figure this out but we ran into a few bugs in the beta on yesterday but we're we're getting there cool listen I got you here I can't resist I want to can I run a few quick questions by you of course this is such an interesting period I just love to hear your perspective on a few things quickly uh one how tough is it to get a bank loan right now you know Lauren I love to think I'm so smart um I thought this would be the year at multifunding we would be slowing down with all the idle money that the government gave businesses that didn't need it and with all the rising rates and we literally cannot keep up so it's just because people are looking for the money are they getting it yeah we're getting people money people buying businesses people buying out Partners people growing businesses it doesn't seem that the rising interest rates environment yet have slown anything down that world you mentioned the idol or eidl loans uh you've written about that you have some concerns about them that they have um negative consequences for business owners who may not realize what it means that they have that on their books can you explain that yeah well there's a couple pieces to that plenty of people took on and shame of the government for all allowing this up to $2 million of idle debt their businesses were in perfectly good shape and it felt like a money grab they took they didn't really need the money but they thought it would be an opportunity to take it just I it was like this money grab it was like this fear of missing out I got to grab some of this before it goes away and when will I ever see money like this in my lifetime it's 30-year money at like 3.75% fixed it was truly too good to be true well what's the what's wrong with it well what's wrong with it is that there are whole a the SBA to lean on you and your business there are a whole bunch of rules and regulations about what you can and can't do with the money I've met people who use the money to buy $2 million of crypto put a down payment on a jet you can't imagine some of the stories I've heard o but the unintended consequences are becoming if you um got your idol money and um the chances are being audited are slim to none the government just does not have the resources to audit any more than on/ tenth of 1% of the people who got the idle money but what is happening now if you get to the point for whatever in your business life cycle and you need another loan and you got an idle loan first question out of the Banker's mouth is what did you do with that money where did it go and if you don't have a really good story for that you have a character issue if you can get through that next thing you've got to do is to get your new loan you've got to get a subordination agreement with the SBA because the government now has leans on like 4 million businesses and those subordination Agreements are being run through I think 12 different offices in the country all of them with different or doing them differently without clear criteria about when or when they aren't giving the subordinations so sometimes it can fly through and sometimes you can get stuck for months I met one one guy a week or two ago whose business is growing like Gang Busters and he really needs a proper working capital facility and now to for his growth and he got a 2 million Idol that he doesn't want to give back and I said you're probably going to have to make a choice buddy do you have any advice for business owners who see their business softening and our concern we may be heading into a recession what any standard advice for preparing in for that yeah I'm it's not clear to me that if it is going to be a recession if it's going to be anything like prior recessions I still think the system is still bloated with so much cash from the covid relief but I always say it's wise to uh think about your business offensively and defensively at any time and be as best prepared for the unexpected and to take advantage of opportunities that also the change creates so make sure your lines of credit are place you have a line of credit at the grade of 10% of your Topline sales or 85% of your AR and 50% of your inventory these are all types of things that are important and you have to consider I know you have a thing about alternative lenders uh alternative online lenders and how they mislead people about the the rates they charge I'm curious are there any alternative lenders who charge a reasonable rate and are worth considering even if you're not desperate for money I think Lauren it's it's a deeper question like that I think you need to every situation needs to be evaluated on a oneof situation so as an example if you are 100% guarantee if you buy a product and you're going to sell it in a week and you're going to make 40% margin even if that alternative lender is going to cost you 20% to do that as expensive and outrageous as that might be it probably still makes sense to do it so I really think it's much more situational but my always my advice to people is slow down take a breath and make sure you're really clear and understand what you're doing you often talk about uh why business owners shouldn't waste their time dealing with big banks that they need to find a bank that really cares about serving smaller businesses what what's the right way to find that bank it really depends on what it is you're what stage you're at and what it is you're trying to accomplish but it might be looking at the banks in your neighborhood or your community and seeing who who Who's got maybe assets of $2 billion or less and they're probably much more likely to care about you than a bigger bank but they don't you don't need to go to a bank in your neighborhood anymore do you well you don't it that's what it it really boils down to what it is you're trying to accomplish a it's lending but it's also what kind of banking products you need to service your business and I think that's a great conversation when do we have more time I will look forward to that uh amasar is founder and CEO of multifunding uh thanks for taking the time Amy this was great I really appreciate it La my pleasure and always a pleasure pleas to speak with you great take care thanks everybody have a good week [Music]