Serial entrepreneur is the person who starts one business, runs it, and then starts and runs additional businesses in succession. Definition of Entrepreneur. Takes decisions to make the product or service a profitable one, Is responsible for the profits or losses of the company. Entrepreneurs are always the market leader regardless of the number of competitors because they bring a relatively new concept in the market and introduce change.
Ever wonder what’s the difference between an entrepreneur and a serial entrepreneur? A as someone who will often come up with the idea and get things started, but then give responsibility to someone else and move on to a new idea and a new venture. This distinction has been increasingly made the last several years as angel investing has grown in public awareness far outside of traditional tech hubs like Silicon Valley. At this stage in my life I’ve begun to wonder if “serial entrepreneur” would in fact be the appropriate definition for myself. I have been a founder or cofounder of 9 ventures in what is approaching 20 year career. Out of those ventures, 5 achieved positive revenues, and 4 are still in existence today.
A healthy batting average that has fed my needs creatively while also feeding my family. However I’ve yet to have one of the proverbial exits we all hear of and celebrate as the summit of success in. Reflectively, this leads to a few questions:. Why haven’t the companies I’ve built given me the type exits we celebrate?. What makes a successful exit?. Should/Do I want to exit my startup?
Question 1: Why haven’t the companies I’ve built given me exits? Each case is obviously unique so let’s lump my companies into categories. The first category is easy to diagnose, we’ll call it “Failed Business Models”. In this group, I built a modest success in the late 90’s in providing Realtor websites and managed listings. We got a healthy fee up front for each site, but the business proved unsustainable because there was not enough recurring revenue to maintain sites once customers were enrolled. We fell into a vicious sales cycle to maintain revenues and by the time we realized the pricing model flaw our customers had already paid good money upfront and were not happy transitioning to higher recurring costs.
Some others were either not matured ideas or the result of being in the wrong place at the wrong time. Fortunately those deals were killed before they got too expensive. The second category is “Team Building and Process Failures”. My most prevailing example here is a manufacturing startup where we were unable to develop a product delivery pipe to match our sales. I had come into this business as the sales & marketing cofounder and suffered from poor chemistry with the operations founder from the onset. As a result, I took a very hands off approach to product delivery thinking that I would do my job and leave my cofounder to do his. My lesson to pass on, anything you sell, you and you alone are responsible to deliver.
Sales is always at some level based on reputation and nothing damages your reputation more than breaking the promise you make when you close a sale. If you don’t trust your product delivery then it’s on you to ensure that you don’t sell to people until you do. That doesn’t mean that you have to run product delivery, but you need to help establish business processes that will manage it more effectively and transparently to the team. Third we have “Businesses that rely on me”. For this I specifically include, my consulting firm. It would be easy to say that a consulting firm is inherently more difficult to sell than a product based company, but in truth the business model isn’t what is to blame. Most consulting business lack the management structure that allows the founders to leave, but it can and does happen.
My last category is companies that are “Too new to know”. I’m engaged in founding this non-profit that I truly hope will outlive my involvement by many years. I’m a partner in an that I have no designs to exit from yet. I’m a cofounder in an that I’m still figuring out the business model and management structure for. Question 2: What makes a successful exit?
This is admittedly theory on my part based on how I answered question 1, however it seems that it would come down to a two key things. Do you have a sustainable business model?. Have you set up a management team/structure that can run the business without you? Beyond that, there are many factors that can impact your price; market size, growth potential, profitability, valuable IP, etc Question 3: Should/Do I want to exit my startup? This is a very personal question.
I can only answer by asking myself why I’m starting each business to begin with. I am driven by ideas. I am engrossed by them and I start businesses so that they can be realized.
From personal experience I know that every 3-5 years I have a new BIG IDEA that compels me. On the surface, an exit from each would be nice. The key for me is that the idea is realized and lives on, some make sense to sell, some don’t. Knowing that I want each idea to live on and I want to move on, it is critical for me to build a business model and management structure that can continue without me. The exit itself is not my motivation, but in the end the job I have to do is still the same. Does that make me a serial entrepreneur? Maybe, maybe not.
I don’t really think too much about exits, but I do recognize that regardless of how I exit a company I need to continue to focus more attention on building a sound business model and a capable team that can outlive the next idea that captivates me. As entrepreneurs, each of us have different motivations.
What are yours? Happy Ventures!
I define a serial entrepreneur as someone who starts and leads one business after another or, multiple businesses at the same time. This is opposed to an entrepreneur who starts a single business and runs the day-to-day operations of that business until exit or retirement. There are several high profile examples of serial entrepreneurs; take for example Steve Jobs (Apple, NeXT, Pixar, Apple) or Elon Musk (Zip2, PayPal, SpaceX, Tesla, SolarCity). What Jobs and Musk also have in common is that they both ran some of these businesses simultaneously, as opposed to one after the other. That is where the dangers can lie. When a business owner becomes more concerned with giving birth to a business and less on nurturing it into sustainable growth, it can mean failure for all the ventures involved. The cause of death of these entities is rarely the original business case or opportunity, but more likely due to the lack of committed follow through on behalf of the entrepreneur.
That being said, serial entrepreneurialism is alive and well in the small business world. Sometimes, small business owners build complimentary startups to allow for vertical integration. A building contractor may also own an electrical contracting company or a landscape architect firm, for example. This type of arrangement is often beneficial to the owner because he feeds his existing business by owning both the vendor and the customer. But things can get precarious when small business owners engage in unrelated opportunities and spread themselves, and their influence, too thinly among disparate industries.
It would be like a building contractor starting a fashion design house or a night club. Serialized businesses are usually born on the back of entrepreneurs' creative impulse to build businesses, but not necessarily run them. They like the thrill of the chase of the startup dream, but get turned off by the daily challenges of the sustainable growth.
In the case of Jobs and Musk, they both focused on building incredible companies before they went 'serial.' At that point, they had both the experience of managing operating companies to great success, as well as the financial wherewithal to diversify and hire professionals to see their future startup visions through. The downfall of many serial entrepreneurs is that they fail to recognize the one business that needs their full time guidance to succeed.
Instead, they hedge their bets by juggling multiple businesses at once. In these cases, usually all the businesses suffer by way of an absentee entrepreneur and a lack of resources due to available cash being siphoned off from one company to another. Not only have I seen examples of this; at times, I have lived it. Luckily, in my case, my first business was well managed by others and had a profitable track record before I added a second, third and fourth business to my portfolio. With that said, they weren't all equally successful, and I often wonder what would have been different if I can just dug my heels in and put all my eggs into one basket. So while I admire small business owners that have a knack for multiple startups, I often advise them to watch their timing carefully or back away completely. Unless the new business is so complimentary or vertically integrated it can live off of the infrastructure and business you already have, I would hold off.
Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.
We aim to create a safe and valuable space for discussion and debate. That means:. All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments. Treat others as you wish to be treated. Criticize ideas, not people. Stay on topic.
Avoid the use of toxic and offensive language. Flag bad behaviour Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.