What It Takes to Become a Serial Entrepreneur
For many business owners and entrepreneurs, starting a company is a once-in-lifetime experience. But for some, one just isn't enough. This message was underscored by the members of a panel on serial entrepreneurship presented by The New York Times Small Business Summit on Thursday, September 23, in New York City.
If the term serial entrepreneur suggests something a bit sinister, it's not without good reason—one does have to be a little crazy to start two, three, or as many as seven companies. Part of the appeal, however, seems to be the ongoing lessons the entrepreneurs learn. The more companies they start, the more mistakes they make, and the wiser they become. The failure of one business can help to inform the successful decision made in another one.
'I started several companies,' says Alex Mashinsky, whose current venture Transit Wireless recently won a bid to install cell phone service in New York City's subways, 'and I'm learning from my mistakes just as much now with my current company as I did with my first company.' Small failures were crucial components to his success, because they taught him how to adapt, change, reevaluate, and execute.
Building long-term relationships with investors is crucial to a serial entrepreneur's success, according to Mashinsky. Early on, you will want to identify funders willing and able to back multiple companies over the course of an entrepreneurial career. Mashinsky even goes so far as to suggest that you should accept a lower valuation from an investor with whom you have good chemistry. Besides loyalty, you should look for funders who are patient. 'When you get money from investors,' he says, 'expect a five to 10 year marriage.'
Of course, the dream of a big payday alone is hardly the reason serial entrepreneurs spend hours, days, and weeks to grow their businesses. 'It's not about trying to make a lot of money,' Mashinsky says. 'It's about having passion and coming up with a great product'
Passion is a word tossed around quite often when it comes to serial entrepreneurs.
'Every time someone says ‘follow your passion,'' says Jay Goltz, a serial entrepreneur (and former Inc.com blogger) whose Chicago-based picture frame and home goods companies employ more than 100 people, 'I want to throw something at them. Sure, you have to have the passion, but it's so much more.'
For Goltz, the key is superior execution—the pursuit of perfection. To be a successful serial entrepreneur, you need to be intently focused on constantly improving the operations of your businesses, he says. The most successful entrepreneurs ask themselves 'What am I doing wrong?' and 'What can I be doing better?' as a kind of mantra to recognize their flaws and mitigate them, Goltz explains.
Understanding your role as your companies' principal is a particular challenge of serial entrepreneurship. If you own a company and are looking to own others, says Mashinsky, you need to consider your strengths. Every company has an innovator, an entrepreneur, and someone who runs the business, he says. Very rarely can one person handle all three responsibilities. A serial entrepreneur must determine which aspect he or she is best at doing, and then consult with or hire other people who can perform the remaining two roles better.
In other words, 'you can't be all to every one,' says Colleen Payne-Nabors, who has founded six companies, including Mobile Cardiac Imaging, which has appeared on the Inc. 5000 several times.
There are several strategies a serial entrepreneur can employ to capitalize on the success of one business with the next, even if the company is in an entirely different industry.
'Let your network know,' Mashinsky says. With thousands of followers on LinkedIn, he was able to tap into the social media network that already knows and trusts his companies – and him. 'You have to work just as much on ‘your' brand as you do on your company,' he says. For example, Mashinsky regularly responds to customer inquires and e-mails. 'People who appreciate you will follow you,' he says. 'One person will tell 100 of their friends.'
Many in the crowd were themselves entrepreneurs and small business owners considering branching out into entirely new industries or ventures.
Some, like Sheldon Yeager, owner of the Skipper Dipper ice cream shop in Long Beach Island, New Jersey, believe now is a great time to become a multiple business owner. Sheldon, who has aspirations outside the world of his 42-employee seasonal shop, believes that despite the weak economy, we live in an era of opportunity. Thinking about the historical context, he says, 'I guess I'm not as risk averse as my grandparents or great-grandparents were.'
For more insight into the practice of starting and running multiple companies, read how Richard Heckmann became a successful serial entrepreneur.