There Ought To Be A Law
It was November 1957, outside Plainfield, Wisconsin, when the police arrested Ed Gein. Inside his kitchen was a bountiful meal of pork chops; macaroni and cheese; pickles; coffee; cookies--and, simmering in a saucepan on the stove, a human heart.
Inside his house, the police made other grisly discoveries--including a box of noses, skulls on the posts of his bed and a headless corpse. The only room that appeared normal, save for the coat of dust, was that of Gein's long-dead mother. If any of this rings a bell, it's because Gein was the real-life inspiration for Robert Bloch's novel, Psycho, which became one of Alfred Hitchcock's film masterpieces.
America has long had a gruesome sense of humor, so maybe that's why "serial entrepreneur," a riff off serial killer, is the term often used to describe entrepreneurs who own multiple companies in their lifetimes. It's hardly a crime, but there does seem to be a growing number of entrepreneurs who stalk a trend, create a business from it and then, when it's flourishing, kill it (by selling or dissolving). Some serial entrepreneurs can't get rid of their company--it's their baby--but they want a growing family, so they hire managers to run the daily operations while they give birth to a new business.
Either way, serial entrepreneurs exist because they need a new challenge with every venture, says Andrew Zacharakis, an assistant professor at Babson College in Wellesley, Massachusetts, which boasts one of the finest entrepreneurial departments in the country. To be a serial entrepreneur, says Zacharakis, "You need to have incredible passion for the start-up process and for the industry your start-up is in, and incredible energy--all the attributes you'd normally associate with excellent entrepreneurs."
But serial entrepreneurship has its dark side. "You have to give up control of a venture that's been your baby and see somebody else take it over," warns Zacharakis. Ominous background music, please. "They may make decisions you don't agree with. The real downside is seeing others destroy something you bled over and tried to transform from a baby into a beautiful child."
Of course, you may just sell your infant corporation for $5 million. Or $50 mil. And you just might get over that downside.
Geoff Williams is a serial Entrepreneur writer, having written numerous articles for this magazine, and has written for Life and Ladies Home Journal. He's also a features reporter for The Cincinnati Post.
Warning! Serial Entrepreneur At Large
Name: Alan Rothenberg
Companies started so far: 6
Weight: 161 lbs.
Hair color/eye color: brown/brown
Distinguishing characteristics: Always wears black, doesn't wear socks, and is often seen with a cell phone and yo-yo
Last seen: Traveling by airplane
Rothenberg's first company was unlikely to ever offer shareholding options: He started a carpooling service in high school, driving 11 kids to and from school, charging parents $10 per child, per week. Sixteen months later, he had enough money to buy a new car. You'll find that common among serial entrepreneurs, suggests Rothenberg, who explains: "Usually we find a need of our own, and we try to fill it."
Rothenberg himself is a sparkling example. By the time he reached college, he was keenly interested in stereos. So he sold cassette tapes and stereo equipment to his fellow students, ultimately becoming the second-largest distributor of Maxell tapes in Massachusetts. "They were the hottest tapes at the time but not anymore," laments Rothenberg, who had five employees and earned $6,000 per week by the time he closed shop.
Before finishing college, he was importing exotic cars from Europe at a20 percent savings and then selling them to U.S. buyers. "Again, no inventory," he reveals wryly. Rothenberg's business only lasted six months but garnered $120,000 and needed two extra workers. But soon another venture caught his eye: a contemporary art gallery.
After graduating college, Rothenberg opened his gallery in Boston in 1986. By the time he closed it to move on to other things in 1993, he had 10 employees and was earning $4 million a year.
While the art gallery was thriving, Rothenberg dabbled in a technology research and development company, Light Age Technology, circa 1989. Based in Waitsfield, Vermont, the company had taken in less than $1 million when he sold most of it (he still owns 10 percent).
Later, in 1995, Rothenbergco-founded KinderActive, a CD-ROM publishing company that generated several million dollars a year in sales. At the same time, he was tooling around with JuniorNet, a firm in Boston that opened to the public almost a year ago. The success of this venture remains to be seen, but one of the major partners is Highlights for Children magazine, and Rothenberg wants this advertising-free children's service-content provider (http://www.juniornet.com) to be on par with the Walt Disney Co.
And if JuniorNet reaches Disney's heights, would you expect Rothenberg to hand over the reins to somebody else? Of course. "I don't see myself just managing a large corporation," he says.
But wait a second, kids--don't rush to try this at home. Rothenberg warns that the career of serial entrepreneur is a risky one--which is part of the appeal. "There is the rush and danger at the same time," he notes, "and each time I start a new entity, I take a substantial amount of my cash reserves, or net worth, and put it into something completely untested and unproven. For some families, that can tear them apart."
Then in the next breath, Rothenberg, who is married and has three young children, offers this dare: "For some individuals, the loss of sleep at night and thinking about things--well, living and breathing this environment--can be pretty scary. But the true entrepreneur really looks forward to it . . . and excels during those times."
Warning! Serial Entrepreneur At Large
Name: Clarence Wooten Jr.
Companies started so far: 4
Weight: 225 lbs.
Hair color/eye color: black/dark brown
Distinguishing characteristic: Carries 10 extra pounds from too many power lunches
Last seen: Fighting traffic on the DC beltway en route to yet another meeting
Like many entrepreneurs, Wooten doesn't particularly want to be a serial entrepreneur. He thinks he's found his dream. ImageCafé.com is it.
Not that his previous three companies were a wash. The Baltimore resident began Envision Designs, an architectural visualization company, when he was studying at Johns Hopkins University in 1991. The company created 3-D animated models of architectural plans and was marketed to small architectural firms, which couldn't afford him, so Wooten soon dissolved his company.
Next, he co-founded, with a friend, Soft Ideas Corp. in Columbia, Maryland, in 1995, which developed one database software application. After the initial phase, Wooten bowed out and Soft Ideas was dissolved a year later.
From 1994 to 1999, Wooten ran Metamorphis Studios, a multimedia and Web design company, with silentco-founder Andre Forde. He ultimately sold it for $20,000 and, with Forde, created ImageCafé.com. A better version of the previous company, according to Wooten, ImageCafé.com is a superstore of professionally designed Web sites aimed at entrepreneurs--$300 gets a consumer a Web site they can fill in with their company's own text and links.
Wooten says he isn't a serial entrepreneur just because he likes starting new companies, but because his philosophy is about constantly searching for the right idea at the right time.
Leo B. Helzel, a former serial entrepreneur who co-founded Haas School's entrepreneurship program at University of California, Berkeley, 30 years ago, echoes Wooten's sentiment: "Most entrepreneurial students are looking for the one deal that's their dream. But if it's a failure, they'll be onto something else. As far as going back to work for Procter & Gamble or Citibank, that's not in their vocabulary."
Wooten, whose company has 17 employees and expects millions in sales this year, may continue his serial career. "I'm an entrepreneur," he says. "I don't know if I'm going to like running a public company."
Weeks after that comment, Wooten got the chance to find out if he'll enjoy running, or almost running, a large corporation when he sold ImageCafé.com to Network Solutions Inc., a domain name registrar in Herndon, Virginia, in November 1999 and took on duties as vice president. The serial entrepreneur bug strikes again.
Warning! Serial Entrepreneur At Large
Name: Jeff Jacober
Number of companies started: 11
Weight: 178 lbs.
Hair color/eye color: gray/brown
Distinguishing characteristic: Thinning on top due to "years of worrying about the wrong things"
Last seen: Sailing out of Nantucket Harbor, cell phone in hand, his PR rep says--but when could he possibly have time to sail?
"I feel more comfortable starting companies where I can relate to the product because I'm a consumer and a customer," says Jacober.
Like Rothenberg, Jacober was always the first person to use his own product. His business career began at the University of Rhode Island in Kingston, where he made $10,000 marketing sportswear to fraternities and sororities. It continued after college with a T-shirt company in 1981. Then he formed SGI Inc., which mostly printed canvas sports bags and was bringing in$29 million in annual sales by 1991. While running SGI, he briefly owned a company that manufactured life jackets, and another that made backyard water slides.
Eventually SGI was sold, and Jacober used his $13 million in proceeds to sail the Caribbean. But soon he was going stir-crazy without a company to run. His next idea came from circumstances no one would envy. Ocean Diagnostics Inc., which he started in 1995, manufactured a home health test that allowed consumers to self-diagnose various diseases and body function problems. In 1993, Jacober had donated a kidney to his brother who'd had chronic kidney failure. "The home test wouldn't have changed the outcome, but it would have helped him diagnose [the problem] sooner," says Jacober. "A year later, I was diagnosed with bladder cancer--a home test would have revealed that."
After Jacober sold Ocean Diagnostics, he created The Ocean Group, a Providence, Rhode Island, business incubator designed to shelter several of his ideas at once. Currently, Jacober is owner or co-owner of five companies, which collectively brought in $10 million last year.
It can be a confusing arrangement. Jacober has made telephone calls and used the wrong company's name. He used to give out the wrong business cards until he created one that reads "The Ocean Group" and lists the five companies underneath. Still, he insists, "Staying somewhat disorganized is the secret to my success. I like doing multiple things at one time--that's what turns me on and challenges me."
So is all the work worth it? It depends. "It's extraordinarily rewarding," says Jacober. "But you have to be prepared to work hard and devote a huge portion of your life to do this. It takes a toll, personally and physically. It takes time away from your family and your friends and your life. You need to be committed."
Still, serial entrepreneurship does get easier with experience. Just ask Jacober. He doesn't flinch at the notion of having created 20 or 30 companies by the time he retires. But he does flinch at the thought of retirement: "I'll probably even turn retirement into a business, if I can."
Carnegie, Jobs And Jordan
A look at serial entrepreneurs in history
Serial entrepreneurs aren't new, observes Lynne Pierson Doti, director of the Leatherby Center for Entrepreneurship and Business Ethics at Chapman University in Orange, California. In fact, they've been around for a long, long time.
Many of the first entrepreneurs were inventors. "Eli Whitney invented the cotton gin," says Doti, "but [it] was a financial disaster for him. Whitney had delays and difficulties patenting it and even after it was patented, he couldn't enforce the patent. He wasn't able to sell his machines by the time he was producing." But he was more successful with his next venture: "He introduced interchangeable parts to gun manufacturing," she says.
Andrew Carnegie was another famous serial entrepreneur. "Carnegie embarked on several money-making projects before revolutionizing the steel industry and personally reinvented [his] company several times in response to new market forces," says Doti.
Serial entrepreneurship strikes even the most rich and famous of people today, says Doti: "Steve Jobs, Michael Milken, Michael Jordan and Warren Buffett couldn't retire even after their names made the history books. It just isn't in their nature."
JuniorNet, (800) JUNIOR-NET, http://www.juniornet.com