Why I'm Not Impressed by Serial Entrepreneurs
Earlier this year, I attended a conference in Barcelona for European entrepreneurs. One of the attendees introduced himself to me as a "serial entrepreneur." I asked how many companies he'd started, and he answered, "Ten."
No matter where I am in the world, I meet entrepreneurs who say, "I'm a serial entrepreneur." Entrepreneurs seem to think this gives them bragging rights. You may be surprised to learn that investors, especially venture capitalists (VCs) like me, are not impressed by serial entrepreneurs. Serial entrepreneurs are like a bad TV series on rerun. We didn't want to watch the first time, and we still don't want to watch. If after 10 tries you still haven't gotten it right, it's time to reconsider the entrepreneur life.
Think about some of today's most successful entrepreneurs: Howard Schultz of Starbucks; Bill Gates of Microsoft; Mark Zuckerberg of Facebook. They are not serial entrepreneurs. They founded a company, believed in their vision and made it work. Maybe you're thinking of someone like Oprah as a serial entrepreneur. Oprah founded a company that has many products. But, her commitment to her brand and her company has been steadfast for years. Yes, she has pivoted in her product line over time. Consumer brands need to stay fresh and constantly update their offerings to keep customer interest. But, HARPO Productions is still a media company, just as Coca-Cola is still a beverage company even if it adds a brand like Dasani.
Entrepreneurs who successfully sell their companies may decide to start another company. However, they'll put just as much time and effort into making that company successful, leaving no time for multiple iterations. Some become mentors to other founders post-company exit. Some become VCs like me. Many continue to grow by running larger companies or innovative divisions at companies like Google, Microsoft, Facebook or Nike. But, truly successful entrepreneurs don't have time to found company after company.
Investors are looking for perseverance and commitment. If you've started 10 companies, or even five companies, and you haven't been wildly successful yet, you're demonstrating an unwillingness to push through the hard times. You need to take a step back and figure out what's stopping you.
In my experience as a VC, companies fail because of three main reasons:
1. The team isn't a good fit.
Above all else, the team is the most critical component of success. Many think a good product idea is enough to make a company successful. However, it's relatively easy to shift a product to address market demand. Companies shift product strategies all the time. Without a strong team, even the best idea won't survive. Everyone on the founding team should contribute something uniquely valuable toward the successful rollout of the company. Otherwise, don't add them to the team.
2. The product or business idea doesn't work.
Maybe it doesn't address a market need or there isn't enough of a market to sustain the business financially. Again, if you have a strong team, you might be able to tweak the idea or pivot to something new. But, the financial viability of the market is a critical factor. As we say in the VC business, cash is king. There must be enough market demand to bring in significant cashflow, even in the early stages.
3. The founder won't listen and won't let go.
To build a successful team, a founder must be able to listen. Founders can't do everything themselves. They need to surround themselves with experts, listen to their advice, and let them do their jobs. Some founders think tasks won't be done right if they don't do it themselves. That model won't scale and the company won't grow. You can't micromanage your people if you want to be on a fast growth trajectory.
A serial entrepreneur is most likely repeatedly neglecting one of above issues. I find that many serial entrepreneurs are just looking for a quick hit with minimal effort. Serial entrepreneurs are often chasing the illusion that startups get funded and then quickly shoot to a multimillion-dollar payout. They don't start a company out of passion for an idea, but to make what they hope will be fast cash. Without passion, they lose interest quickly and are on to the next potential cash cow.
Entrepreneurs with real passion don't give up so easily. They learn from their mistakes and do whatever it takes to make the business work. Some serial entrepreneurs do manage to get a quick sale or merger and call it a win, but because they didn't put in the time and effort to grow the business valuation, the sale price will be low.
If you're a serial entrepreneur or thinking you should become one, think instead about how you can stick with one company for the long haul. What challenge may be stopping you from seeing a company through to its maximum potential?
Growing a company takes time, struggle and commitment. No company I've ever worked with has had a straight shot to the top. Most have struggled mightily to stay in business at one point, including the Googles of the world. The successful founder finds a way to pivot, learn, listen and evolve to keep the company going. True entrepreneurs don't get in and get out so quickly. They stick through the pain and challenges because they have no choice. They believe so strongly in their idea that often, our biggest challenge is getting them to modify their vision or call it quits when the idea truly isn't working.
If you're a serial entrepreneur, it's time to consider a personal pivot. Consider what you really want. Are you truly an entrepreneur with a passion for your business idea, or are you trying to make a quick buck? Do you get bored easily when you don't have instant success? Is it that you abhor the idea of working for someone else? Many factors could drive you to start your own business. But, an entrepreneur is a unique breed. An entrepreneur has passion, vision and most of all, persistence. Find your inspiration and stick to it. Then go to investors with a new story. Not a story of serial entrepreneurship, but one of unrelenting excitement for an idea that is so deeply rooted, you couldn't possibly let it go until you saw it come to life and fully flourish.