Positioning: startup or entrepreneur?

Today I was chatting with the boss of a listed company (I won't name him without his permission), and we got onto how failure is the norm for startups.

He suddenly cut in with his own view: "Why position yourself as a startup? Why not position yourself as an entrepreneur?"

That was interesting. He pointed out that a startup and an entrepreneur are fundamentally different.

Startups usually chase fast growth, raise money often, and use disruptive innovation to get there by the quickest route. In apparel retail, many startups go to online marketplaces to reach users quickly, or, if they open physical stores, pick high-exposure malls even at very expensive rents. That kind of fast growth does work sometimes, but when the market turns against you, it is like a house built of leaves: one gust of wind and it falls.

Entrepreneurs care more about steady, long-term development, the slow and constant stream. They don't chase growth blindly; they move forward from a position where they can't be knocked over. In retail terms, an entrepreneur picks locations carefully, with reasonable rent and the right customer experience, much like IKEA and Decathlon. Growth is very slow, but solid. It needs more capital expenditure (CapEx) and operating expenditure (OpEx), yet over the long run it gives the brand a firm foundation. It is long-termism.

The conversation was just a casual chat, until I saw the latest Buffett news and fireworks went off in my head.

Buffett has just trimmed his holdings again and is now sitting on US$325 billion in cash. Put in a US bank at 4.35% a year, that earns about US$14 billion in interest every year.

What does US$14 billion mean?

It is roughly Tesla's net profit for a year. In other words, Buffett can do nothing at all and earn as much from bank interest as Tesla makes in a whole year.

In today's economy, do you chase a startup's fast expansion, or grow like an entrepreneur, lasting and steady?

Buffett has given us the answer in a different way.