May 22, 2018
Some people who describe themselves as serial entrepreneurs think of the term as a badge of honour, but I’m not convinced. Here’s what I’ve learned about entrepreneurship that’s changed the way I think about running multiple businesses.
I had lunch with a founder the other day who told me that while he enjoys starting up new businesses, but doesn’t like to operate them. Once the business is making money and has people who can run it, he wants to move on to the next thing.
I joked with him that he’s like the Mary Poppins of entrepreneurship. Flying through the window with his umbrella to help a business in need, and then floating back out when everything is tickety-boo, eager to move on to the next big thing. We laughed when I suggested his future business will be called Supercalifragilisticexpialidocious.
Not all serial entrepreneurs are alike, and I do think some approaches are better than others.
Here are four types of serial entrepreneurs I’ve identified:
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The Folder: They start a business, grind for a few years, realize it’s not working and then shut it down or sell it for spare parts.
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The Flipper: They start a business and then a few years later sell it for a good haul, then move on to the next. The Flipper is usually the most successful kind of serial entrepreneur.
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The Milker: The Milker, like my Mary Poppins friend, likes to start a business, get it to profitability, leave a manager to operate the day-to-day details, but remain a shareholder. The Milker collects their dividends at the end of the year.
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The Gnat: This is the maniac with a short attention span. They like to start up a new venture while running other existing business(es).
Do you describe yourself as a serial entrepreneur? Can you recognize yourself in this list?
The Folder
“You’ve got to know when to hold ‘em. Know when to fold ‘em. Know when to walk away, know when to run.” — Kenny Rogers
There’s not too much to say about the Folder. If you’ve started multiple businesses and run them into the ground, then technically you’re a serial entrepreneur, but not yet a successful one.
My first business was an agency, and it was a failure as far as I’m concerned. I’m not proud of that, but I learned a lot during those five years; lessons I’ll take with me for the rest of my life. Failure can be a valuable learning experience, but as an entrepreneur, you eventually need to learn how to make money.
An entrepreneur who can’t make money is ultimately like a quarterback who can’t win games. Making money is an intrinsic part of doing business. It doesn’t mean you’ll never lose, but at some point you have to start winning, otherwise, maybe this isn’t for you.
The Flipper
“I’m always on the lookout for a future ex-Mrs. Malcolm.” — Ian Malcolm, Jurassic Park
Full respect for the Flipper. If you can build a business to a point where you can flip it and make a tidy profit, all the power to you. Finding a buyer for your business who will pay millions of dollars is an incredible feat.
However, if the buyer can see so much potential in your business that they want to scoop it up and scale it, why wouldn’t you do that yourself? If you’re in a position where selling the business isn’t primarily about the money, why not go the distance with your business yourself? YOU CAN DO IT.
The Milker
The Milker raises a business until it’s producing profits then moves on to a new venture, but occasionally returns to reap the benefits.
This would describe my friend I mentioned at the beginning of this post who likes starting businesses but not operating them, so he hires people to run the day-to-day details and then he moves on to his next project.
In theory, there’s nothing wrong with this approach. However I offer him this challenge: Are you really giving your businesses a fair shake and making them all that they can be?
If you talk to most entrepreneurs, they all want the same thing: to create a thriving, profitable business that grows and produces wealth and freedom for themselves, their employees, and shareholders.
How can your business offer you the wealth and freedom you desire? I’ve learned it’s by scaling. Here are a few things the Milker will often say about their approach to entrepreneurship:
‘But I just want to keep it small and simple’
Like many people, I used to think that larger businesses were a hassle. A monster I would need to feed, that would take over my life, and would kill any profit margins. It wasn’t until Proposify started doing well and we began to grow our team that I realized the key to wealth and freedom is hiring more people.
I’m not alone; the best entrepreneurs in the world have figured it out. It’s why Mark Zuckerberg isn’t still at Harvard coding Facebook, and why Jobs and Wozniak didn’t stay bunkered down in their garage building computers. That would have brought less freedom and wealth, not more of it.
Most freelancers and independent consultants hit a ceiling where they can’t charge a higher rate and remain competitive, and they only have a fixed amount of hours in the day. Even if they’re selective about which clients they take on, the business still requires their personal blood, sweat, and tears every day to operate. Is staying small really freeing them up and making them rich?
The key is to find a business model that’s repeatable like software, information products, or a productized service.
‘But I just don’t like operating a business’
I understand completely why you don’t want to be in the trenches every day, responsible for every decision, every delivery, every sale, and every customer complaint. You want the business to operate without you, which brings us back to freedom.
I have good news for you: you can have the best of both worlds. You can focus on your business without getting tangled up in the weeds. However, you need to upgrade your mindset in terms of what a business actually is.
It isn’t about hustling to get a business afloat and then virtually abandoning it once it’s connecting with the market; that’s not in the best interest of anyone. You are responsible for the long-term success of the company.
Even if you’re committed 100% to your business, it shouldn’t rely on you for day-to-day operations. You need to hire a leadership team who reports to you. They hire and fire staff, work with you to set goals, come up with a plan to achieve those goals, are held accountable, and are coached by you as needed. That’s what running a scalable business involves.
Check out Traction by Gino Wickman. The framework outlined in that book changed the way we operate Proposify, and I’m sure it will help you, too.
The Gnat
Starting a business is tough. It takes years of grinding 24/7 to get it to work. Starting multiple businesses AT THE SAME TIME is insane. You would need to be superhuman to pull it off because there aren’t enough hours in the day. And reality alert: you’re not Elon Musk.
‘But I get bored too quickly’
This is what’s known as a humble brag. “I’m too interesting and brilliant to waste my talent on just one thing.” Ugh.
Try becoming a world-class athlete in football, baseball, hockey, and basketball all at the same time. Or saying, “I’m going to work on being a basketball player, get to the college level, and then switch because I’m bored. Now I’m going to focus on football, but I never want to be in the major leagues, or the NFL, or the NHL. I don’t ever want to get to the pros.”
Why wouldn’t you want to build a business to reach its full potential? To accomplish a bigger mission, serve a larger audience? Make your proverbial dent in the universe, bring as much wealth and freedom for yourself and others as it can?
If you don’t want that then why be in business at all? Maybe you’d do better working at someone else’s company as a number 2, or 5, or 15.
When you look at the most successful entrepreneurs in the world, they’re generally known for building one business. Sure they may have had mistresses, like when Steve Jobs started Pixar and Next, but ultimately he returned to his true love, Apple.
Think of successful musicians. Most are known for being in one band, with maybe a solo act afterwards. They didn’t start four bands at the same time, diluting their efforts and thinking all four would explode in popularity simultaneously. They didn’t start a band, come out with one album, and move on to the next band. They stuck it out and only disbanded after they were well past the peak of their creative output.
That’s because to do anything well requires time, patience, and focused effort. Diluting your focus means diluting the likelihood that any of your businesses will take off.
There’s nothing wrong with side projects
What if you have an itch you need to scratch, or you want to try a different model or industry, or like the challenge of building something from nothing?
Gary Vaynerchuk has one core business that generates most of his wealth—VaynerMedia—a $200 million/year, 800-employee agency. Outside of that, he’s angel investing, landing sneaker deals, vlogging, podcasting, writing books, speaking, and co-hosting Apple’s reality show. Gary Vee IS his side hustle. However, his agency wouldn’t be where it is if Gary left it all to a management team. He’s involved every day, landing new clients, and putting out fires.
Once you have a growing business with a solid leadership team, clear direction, a repeatable sales model, and a large target market to go after, then you’ll have some time to experiment with side projects. You can invest in and advise early-stage startups, write books, or do whatever fulfills you creatively.
You can do all that without walking away from overseeing your business. Your leadership team needs your long-term vision and direction. They need you to guide them in making big decisions, to coach them, and to hold them accountable for hitting targets.
And you need to know your customers inside and out, especially if you have a board of directors and/or shareholders who in turn hold you responsible for hitting your targets.
How to apply this to your business
I’ve gone through a mindset shift in the last couple of years where I didn’t think I wanted to be a scaleup CEO, that I liked the hustle of starting something new and unproven, and that maybe I didn’t have the skills to be effective in my role.
I now feel the polar opposite; I’d rather go the distance with Proposify and see how far I can take it. To do that, I need to get even better at hiring great talent, building and coaching a leadership team effectively, and making strategic decisions that will get the company to where it needs to be. I still get to have side projects, like the book I’m writing. I still get to have flexibility with my schedule.
If you’re lucky, hard-working, and talented enough to build a business to the point where it can generate profits and thrive on its own, then it’s a missed opportunity to not stick with it and scale it to as big as it can get.
Every entrepreneur wants to be financially free and able to leverage their time. The easiest way to do that is with one scaling business at a time, not juggling multiple businesses that never get the attention they need to reach their full potential.
What’s the expression? “Jack of all trades, master of none.”
