3 Categories of Entrepreneur and How to Succeed in Each One
Nine stories of success and failure, with key lessons
When I retired in 2011, I thought the time was right to become an entrepreneur. I’d have the freedom to do what I wanted, when I wanted. I wouldn’t have to deal with idiotic bureaucracy. I could work from wherever I felt like: on a beach, at sea on a cruise, or chilling at a coffee house.
I started a business. I ran through our savings and never got a single paying client.
Desperate to bring in some money, I became a freelancer. I burned out and made myself ill from the stress.
I created e-commerce and affiliate marketing websites. They hemorrhaged money, required over 60 hours of work a week, and never made a dime.
I ended up having to take a seasonal position working for Honey Baked Ham, for $10/hour and $120 of ham. Do you know how long a 12 lb ham lasts for two people? Long enough to be heartily sick of ham. We gave the final 3 lbs to friends, because we couldn’t bear to even look at any more ham.
Where was my promised digital nomad lifestyle?
All around me, people were succeeding where I was failing. Was it me? Was I just bad at business and incredibly inept?
No. I’d failed to take into account the kind of business I was in.
Three categories of digital entrepreneurs
There are three main categories of digital entrepreneurs:
- Business ownership (e.g. e-commerce, affiliate marketer)
- Freelancer / contractor (e.g. copywriter, social media manager, voice actor, video editor)
- Creator (e.g. author, blogger, artist, YouTuber, podcaster)
Each requires different personalities and skill sets. I failed where my friends succeeded because I chose the wrong category.
And I’d made the cardinal mistake of doing what everyone else was doing, the same way they were doing it. I had no way of standing out from the crowd. I did not offer any unique value.
In a moment of head-slapping obviousness that only took 10 years, I found the right category. I’d written over 16 books, most of which had won awards from readers or reviewers. I had a distinctive point of view, and a lot of helpful information I could share. I was naturally suited to be a creator. Finally, I started to see success.
For each category, here are stories of my friends who succeeded, and why. I’ll also share why I failed.
Business ownership
A digital nomad business owner is primarily an internet marketer. These are people who have a business selling things. Unlike a traditional business, they don’t physically handle transactions. This is a rapidly changing area of the internet, and people who do well here need to like constant learning. There are always new strategies and techniques to master and incorporate. You also need a way to stand out in an extremely competitive space.
The house that blenders built
My friends had a business selling blenders online. They were passionate about green smoothie health benefits long before green smoothies were trendy. They posted photos, recipes, and reviews to their website. And they got an affiliate fee for every Blendtec or Vitamix blender they sold.
They sold a lot of blenders. At one point, they were Vitamix’s highest grossing affiliates. They jokingly called their home in Boulder, CO, “The house that blenders built.”
Why they succeeded: They were passionate about the products, and used them daily. They also were early entrants to a rapidly growing business segment.
Scuba diving souvenirs
Another friend was an avid scuba diver. He noticed that his wife would buy jewelry wherever they went, to remind her of their dive. So when he retired, he started an online business selling sterling silver jewelry. But he only sold ocean-related jewelry.
Instead of trying to market the jewelry to all jewelry buyers, he marketed to scuba divers. He was already active in scuba diving social media. He posted photos and wrote about his dives, then linked to pieces that made good souvenirs.
Why he succeeded: He understood the scuba diving culture, and spoke their language. He tapped into an underserved market.
My failures
Given these examples, of course I thought it would be easy to make money selling online. I tried many affiliate, Amazon, and drop shipping businesses. Some of them included selling yoga, mystical, and magical equipment. I also tried selling supplies for raising chickens at home during the pandemic.
Why I failed: I knew little about the topics, and had no way of developing authority. I also hated the constant change to keep up with new search algorithms and SEO best practices.
Freelancer/Contractor
Freelancers and contractors work for other companies to provide a service. Freelancers generally do creative work, such as copywriting, video production, or graphic design. Contractors generally provide support, such as data entry, virtual assistance, or customer service. In both cases, the freelancer or contractor may have one or many clients. They may be paid hourly or by the job. People who do well here have a specialty that they are sought out for. Or, they are excellent at marketing themselves to potential clients.
The voice of evil
My dental hygienist had an interesting side hustle. She did voice acting for children’s animated cartoons. The producer would send her the season’s scripts, she’d go to their studio, and record all her dialogue.
She specialized in voices for female villains. Somehow, her voice conveyed “creepy, scary, yet vulnerable and lovable”. She grew a two-episode role into a multi-year contract.
Why she succeeded: She had an unusual skill, to make an animated villain lovable. It was probably the same personality traits that made her a successful hygienist.
Flying fingers
Another woman I knew freelanced for the same SEO content creation firm as I did. Her work was amazing. She could pump out highly-readable, SEO-friendly content in a ridiculously short time. Since the articles paid by the word, she made about $20 — $30/hr. Sometimes she made even more than that, because she got all the “rush” jobs that had speed premiums.
Why she succeeded: She had an excellent system that allowed her to research and write about any topic. She used content templates that could be filled in to read naturally but score well in search.
My failures
I tried to market myself as an SEO consultant. I showed how people’s businesses could improve by ranking higher in search results. But while I understood SEO, I had no background in sales or marketing. Then I subcontracted to an SEO content creation firm. I turned in excellent work, but was too slow. I couldn’t take the pressure to produce enough for a livable wage.
Why I failed: I had the technical skills, but not the sales and marketing skills. I also did not have a repeatable process.
Creator
The main difference between a freelancer and a creator is who decides what is produced, and who owns it. Creators choose the topics for their videos, blogs, books, artwork, music, or podcasts. They also own all rights to their creative work, although they can sell those rights. Their most difficult challenge, aside from creative burnout, is to find an audience.
Empowerment through erotica
My first success as a creator was as a fiction writer. I specialized in erotic romances that empowered women. I wrote stories for professional women who were stressed out by their responsibilities. My publisher sent me on publicity tours, and I was a guest at many conferences. I was even on a segment of CBS Sunday Morning. I chose to quit when my publisher went out of business at the same time as I got married.
Why I succeeded: While my books weren’t NY Times bestsellers like some of my friends, they made a living wage. I wrote for an underserved area of the market that I understood well.
Positive views on life
My most recent success as a creator has come through blogging. After some initial floundering to find the right tone and topics, I’ve grown steadily. Readers seem to respond well to my cheerful enthusiasm and positive encouragement. Rather than being an expert, I share what I learn as I learn it. And I can tell stories very well.
Why I succeeded: I built on my skills in writing and storytelling and wrote for an existing market. I’m fascinated by the subjects I talk about, so it’s fun and easy to create a lot.
My failures
Between the writing and the blogging, I tried to make a go of self-publishing. I published “low-content” puzzle books. I published a novel released as a series of stand-alone chapters. I published cookbooks. And I published short erotic fiction. I didn’t do any marketing for these books. I also published them under pseudonyms, so there was no name recognition.
Why I failed: I had no market, and did no marketing. I had a scattershot approach to what types of books I would write, so could not build an audience.
Conclusion
If you want to be successful as a digital entrepreneur, you need to first pick the right category for you. The three main categories are being a business owner, a freelancer, and a creator.
Business owners need to have a deep understanding of their customers’ lifestyle. They also need to speak to that lifestyle with authenticity and authority. It helps if they serve a specific need that no one else serves. Finally, they need to be constantly innovating to stay ahead of changes in SEO and search.
Freelancers and contractors perform a service for other businesses. They need to either have a unique skill, for which they can charge a premium, or be fast. They also need to spend much of their time, especially in the beginning, trying to land new clients. Otherwise, if they subcontract, they only make a fraction of the money the client pays for the job.
Creators decide the topic and form of their creative work. They need to find an audience that wants to pay for work they want to produce. Creators are challenged to produce pieces of work that are similar enough that fans will enjoy them. But at the same time, they must stretch and grow as artists to attract new fans.
Once you choose your category, make sure you have a plan. Offer a unique value, to a market that wants it, and you can succeed.
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