Are You In It For Love or Money?
A typical entrepreneur has an idea, starts a company and plays an important part in the operations day in and day out.
A serial entrepreneur, on the other hand, is someone who continuously comes up with new ideas and starts new businesses around those ideas. They quickly put individuals in place to move the burgeoning business forward, freeing themselves up to move on to the next big thing.
I was mentored under a serial entrepreneur and fall firmly in the second category. In fact, I have three different initiatives going on right now and am considering a fourth for the New Year.
I am often questioned about the merits of serial entrepreneurship. Is it a good thing? The answer, as you would expect, is "it depends." An entrepreneur that starts one business and focuses on it has typically has fallen in love with an industry, product or offer. Serial entrepreneurs are unapologetically focused on the money. Here's what anyone considering this path should know before starting.
1. You're in Good Company
Some of the most successful entrepreneurs are "serials." Think: Richard Branson, Mark Cuban and Elon Musk. All made their fortunes starting successful ventures in a variety of seemingly unrelated industries. In fact, an analysis by Funders and Founders of Forbes list of 960 self-made billionaires shows that 830 of them made their money from more than one business.
2. Variety is the Spice of Life
I thrive on variety, and serial entrepreneurship provides just that. The No. 1 reason that I never wanted a "real job" is that I couldn't imagine doing the same thing every day.
A serial entrepreneur learns a tremendous amount about the business of business. You can take knowledge learned in one endeavor and apply it in unique ways to a new one. The established approaches or models that others have followed do not limit your thinking.
When starting my research company, I had been advised by many industry "experts" that there was no way to create packaged, fixed-price research projects. But I did just that making it easy to bid and win business because my company's services were consistently priced and easily budgeted. This fixed price approach was something I had learned selling hardware.
3. More Shots At Success
There is no such thing as an overnight success. By starting multiple ventures, you increase the likelihood of creating a winner.
My company Laddering Works has been a successful endeavor almost from day one. My radio network, The Better You Network, on the other hand, is entering its third year and is just now blossoming into its full potential. The success of one of my companies provides the resources needed to give the other a proper runway to determine if it will make it or not.
Often business owners invest extra revenue into their existing business, which is also usually their most significant asset--the equivalent of buying the same stock every day. Serial entrepreneurship diversifies your holdings.
1. Scattered Focus
While it may be okay for you, the entrepreneur, to have multiple irons in the fire, you should have resources, technology and people dedicated to each individual venture.
The staff assigned to each company must understand and embrace the specifics of the products or services sold by the business. A lack of focus will impact that individual company's likelihood to grow and be successful.
2. Harder to Pull the Plug
If you have one company that is going well but another that is foundering, it can be harder to pull the plug. You must look at the businesses individually and make an informed decision about what's working and what's not.
To make the decision easier, be sure to keep up with the financial investments and committed resources separately. One way to make this work is to put a general manager in place and let him or her run the business as their own with separate profit and loss responsibility. The general manager will pay attention to the details and you become a sounding board to help them succeed.
3. Other People Don't Grasp It
There is a label that is often applied to serial entrepreneurs: "jack of all trades, master of none". My daughter told me recently she doesn't know how to complete a form that asks for my occupation.
When asked what you do for a living, you have to be careful not to associate too closely to any one of your businesses. As I stated earlier, one of the good things about being a serial entrepreneur is that you are interested in the "business of business." You should always be thinking about the end game--how is the business going to improve your bottom line and what's your exit strategy?