In a recent post, Seth Godin defines the differences between an Entrepreneur and a Freelancer.
To put it more simply than Godin:
- A freelancer gets paid for their work.
- An entrepreneur uses capital to create a business larger than themselves.
This is a little confusing. Both people “work for themselves."
Why do the semantics matter?[a]
Take a lawyer for example. You might not think of lawyers as freelancers or entrepreneurs, but they can be employees, consultants, freelancers, or contractors.
When a lawyer freelances, they work for themselves, often billing clients by the hour, sometimes billing by the project. This doesn’t require an office or any other equipment. Like Godin says: “Freelancing is the single easiest way to start a new business.” The freelancing lawyer simply needs to show up, do good work, and deliver on time.
Compare this with a lawyer-entrepreneur: using Godin’s distinction, “Entrepreneurs use their money to build a business bigger than themselves." Unlike a freelancing lawyer, the entrepreneur lawyer's task is not practicing law, but the assembly of a firm (for example). This lawyer’s job is not litigation. Their job is to build a profitable business that can function with or without them.
(To paraphrase Robert Kiyosaki: If your firm operates without you present, you are a business owner. If your business requires your presence to function, you are self-employed).
There is nothing inherently more or less virtuous about being a freelancer or an entrepreneur. The important thing to realize is:
Which do you want to be?
Most people who venture away from employment and into building a business are unclear about their desired outcome. Many people want to do both: They want to “freelance” and “build an organization."
Godin describes the difficulty that plagues people who try to do both:
- Freelancers who are committed to simply working often fail to build effective organizations because they would rather be working.
- Entrepreneurs who are committed to building a business fail their business when they take the time away from their business building to do actual work.
Knowing this, it will benefit you to make a conscious choice:
Do you want to freelance and do the work that you love?
Or do you want to build a business, and to enable your business to do the work that you believe needs to be done?
Well, consider hammers, drills, nails, and screws: You can use a hammer to pound in a screw, just like you can use a drill to drive in a nail. It is possible. But, it is much more practical to hammer nails and screw screws.
Use the correct tool for the job.
