The myth of the serial entrepreneur(swombat.com)
swombat.com
The myth of the serial entrepreneur
http://swombat.com/2012/6/29/serial-entrepreneur
13 comments
It's amazing how you people really believe all this.
I don't mean to offend anyone, but I hate when people think of themselves a beautiful butterfly. Common people, employees, plumbers, etc. also have ideas, also have "bold blindness", they also have a willingness to create from nothing (who think created the thousands of open-source apps that are part of GNU and/or Linux, entrepeneurs?) is not that what separates you from them. You have disposable money and instead of a nice boat or car you put it in a business. And you know how to talk people into putting money in your idea, and you probably live in a country so terribly full of money that people are willing to risk it. That's it. Unless you are an entrepeneur living in some hellhole african country, in that case, respect to you, bold african entrepeneur.
Success or failure has a large component of luck that people don't like to acknowledge. Especially counter-factual luck. My parents are very lucky to never have had to deal with serious illness, injury, accident, etc. I'm sure if there was a terrible car accident that killed my family, I wouldn't exactly be as focused on my work and therefore less 'succesful' as an entrepreneur.
But there is an element of uniqueness to dive into the entrepreneurship game at all. Plenty of people have ideas and do nothing at all with them. If you don't actually dive into it, quit your job, and work at it, it's impossible to build a business. Most people (the vast majority) don't have the balls to do that.
Hard work and taking that risk are necessary but insufficient conditions for entreprenurial success. You also need luck. But that doesn't discount the amount of risk taken or the amount of work put into it, and most people can't stomach that.
But there is an element of uniqueness to dive into the entrepreneurship game at all. Plenty of people have ideas and do nothing at all with them. If you don't actually dive into it, quit your job, and work at it, it's impossible to build a business. Most people (the vast majority) don't have the balls to do that.
Hard work and taking that risk are necessary but insufficient conditions for entreprenurial success. You also need luck. But that doesn't discount the amount of risk taken or the amount of work put into it, and most people can't stomach that.
I agree with all you said, but consider that humans in general are terrible at estimating risk. I believe being an entrepeneur is not that risky, and being an employee is not that safe either.
The main problem that I see about seeing entrepeneurship as unnaturally bold, risk-takers, creative intelligent people, is that you dehumanize the no-entrepeneur person, in such a way that's very easy to exploit them, because, they are like cattle, non-risk takers, and deserve it, right?
Funnily enough, I covered exactly this point in an earlier article, though this one wasn't so popular with the hn crowd..
http://swombat.com/2012/6/18/entrepreneurship-safest-career
http://swombat.com/2012/6/18/entrepreneurship-safest-career
I agree.. I often say the real talent is being in the right place at the right time. Sadly that's not always an option and sometimes it's hard work that helps even the odds.
Whether I agree with you depends upon your definition of "you people". HN certainly has its fair share of startup circle jerkery and idealization, but the grandparent didn't come off as being a part of that. Rather, it sounds like they were just trying to share their experiences on the subject of the OP.
What's is a amazing is I started my first business with $486.00 in the bank. Don't berate people because you don't understand how it's done. Several of my companies were partnerships with other people for funding.
As bedris quoted: "[the] definition of an entrepreneur is someone who makes things happen despite not controlling the resources necessary to achieve them."
It's not always about rich people having fun.. most of the time it's about people following their passion and pushing every limit to make stuff happen.
And most of the time it's about complete and utter failure and learning from that so you do better the next time. :-)
As bedris quoted: "[the] definition of an entrepreneur is someone who makes things happen despite not controlling the resources necessary to achieve them."
It's not always about rich people having fun.. most of the time it's about people following their passion and pushing every limit to make stuff happen.
And most of the time it's about complete and utter failure and learning from that so you do better the next time. :-)
Resentment won't help your cause, whatever it is.
[deleted]
It's not as zero-sum as you seem to imply.
I would say the best realization of this article is that entrepreneur is a state of mind. A willingness to create from nothing in the face of extreem adversity.
I agree with this. I came across the following definition of an entrepreneur, which I also really liked: "[the] definition of an entrepreneur is someone who makes things happen despite not controlling the resources necessary to achieve them."
Source: http://www.tcpinnovations.com/drugbaron/?p=242
I agree with this. I came across the following definition of an entrepreneur, which I also really liked: "[the] definition of an entrepreneur is someone who makes things happen despite not controlling the resources necessary to achieve them."
Source: http://www.tcpinnovations.com/drugbaron/?p=242
Create from nothing in the face of extreme adversity?
You're an entrepreneur, not an infantryman. Don't kid yourself, nobody's preventing you from going and making something.
You're an entrepreneur, not an infantryman. Don't kid yourself, nobody's preventing you from going and making something.
The extreme adversity isn't necessarily from other people.
I agree with a lot of what the author says, but I am not sure I agree with the main premise in his title.
Luck and timing often play a big role in setting up a business. I think there are some people who saw an opportunity through being in the right place at the right time and created a business out of it. Often these evolve into being what people call lifestyle businesses. In my mind these people don't fit into the 'compress 40 years of work into 4 years' camp and are non-serial entrepreneurs.
To me, the mark of a serial entrepreneur is someone who has started a business up, got it to the point where it's been successful, and then having had the option of staying on very comfortably with either a lifestyle business, working in a bigger company, or early-retirement has decided that they want the buzz and excitement of a startup again.
A good serial entrepreneur is by extension of that someone who can do this more than once successfully. To create a single business that works out can often involve a lot of luck/timing; to do it 3 or 4 times is something else.
Luck and timing often play a big role in setting up a business. I think there are some people who saw an opportunity through being in the right place at the right time and created a business out of it. Often these evolve into being what people call lifestyle businesses. In my mind these people don't fit into the 'compress 40 years of work into 4 years' camp and are non-serial entrepreneurs.
To me, the mark of a serial entrepreneur is someone who has started a business up, got it to the point where it's been successful, and then having had the option of staying on very comfortably with either a lifestyle business, working in a bigger company, or early-retirement has decided that they want the buzz and excitement of a startup again.
A good serial entrepreneur is by extension of that someone who can do this more than once successfully. To create a single business that works out can often involve a lot of luck/timing; to do it 3 or 4 times is something else.
That's an interesting angle, though I would argue that what you're defining here is a very successful serial entrepreneur, rather just a "serial entrepreneur". I'd say that someone who willingly jumps into startup after startup is a serial entrepreneur - successful or not. Max Levchin was clearly a serial entrepreneur already after his 6th company, even though he hadn't started Skype and Slide yet...
We could look at through a different lens and state that if you aren't jumping into startup after startup - successful or not - are you even an entrepreneur?
Well, that's sort of my point... serial entrepreneurs are the norm. Perhaps we should come up with a term for those rare entrepreneurs who are satisfied with a single attempt at the business game...
I would just say it's something entrepreneurial they are doing, doesn't per say make them an entrepreneur - perhaps it does though; If you're learning a musical instrument, are you not a musician? Maybe not a professional. Professional Entrepreneur vs. Amateur? :P Serial Entrepreneur has a better ring to it, though it really is just someone who is an entrepreneur IMHO.
Businessmen?
This is a great point. I also think it is worth noting that by the third or fourth time, even if they were peniless, the person would be starting from a far better position than a first timer. Networks and Reputation are a powerful form of currency and more useful than money if you want to do hard things.
Confidence from repeated success - do not underestimate pressures from family and self doubt in their contribution to start up cave ins.
Confidence from repeated success - do not underestimate pressures from family and self doubt in their contribution to start up cave ins.
...to do it 3 or 4 times is something else.
Doing it 3 or 4 times is in fact much easier, which is why so many entrepreneurs who are successful the first time go on to have further success. It's much easier to raise money with a track record, you have connections with skilled people on both the technical and financial side, and you have your own experience to avoid pitfalls and give you confidence. If entrepreneurship is a marathon, it's a marathon where every mile gets easier and easier as you run.
In such an economic race, it's no wonder there is a growing disparity between the leaders and the rest of the pack.
Doing it 3 or 4 times is in fact much easier, which is why so many entrepreneurs who are successful the first time go on to have further success. It's much easier to raise money with a track record, you have connections with skilled people on both the technical and financial side, and you have your own experience to avoid pitfalls and give you confidence. If entrepreneurship is a marathon, it's a marathon where every mile gets easier and easier as you run.
In such an economic race, it's no wonder there is a growing disparity between the leaders and the rest of the pack.
I can't help but feel that there's some sample bias going on here.
Each example given is an person who is currently well-known for being an entrepreneur. By definition, they haven't moved on to something else.
There's a tonne of people who've succeeded as an entrepreneur and then gone onto something else; venture capital (in fact most VCs partners are ex-entrepreneurs), politics or philanthropy, for example.
The point is that these people are now known for something other than entrepreneurship, so they don't spring to mind as examples of one-time-entrepreneurs.
/rant
Each example given is an person who is currently well-known for being an entrepreneur. By definition, they haven't moved on to something else.
There's a tonne of people who've succeeded as an entrepreneur and then gone onto something else; venture capital (in fact most VCs partners are ex-entrepreneurs), politics or philanthropy, for example.
The point is that these people are now known for something other than entrepreneurship, so they don't spring to mind as examples of one-time-entrepreneurs.
/rant
Can you name a handful? I don't argue that there are no such people, but I don't think there's a tonne of them.
I know more than one person who's quit their day job, started up a business, made a few million pounds and then retired. They won't be anyone that you, or I suspect anyone else on here, knows. They are simply people I've worked with.
And that's the thing. The ones that become mega-famous are typically the ones who have been around for an extended period of time - either through having spent the time building a single successful company (Bill Gates, Zuckerberg etc), or people who become well known for starting up multiple companies. If Bill Gates had retired 4 years after starting up Microsoft, how many people would even know his name now?
Rather than trying to identify people who've famously walked away after a few years and comparing them to the number of famous people who didn't, a far better measure would be to find random 20 entrepreneurs who have only been doing it for a couple of years and see how many of them are still doing it, either with the same company, or with a new company, in 10 years time.
And that's the thing. The ones that become mega-famous are typically the ones who have been around for an extended period of time - either through having spent the time building a single successful company (Bill Gates, Zuckerberg etc), or people who become well known for starting up multiple companies. If Bill Gates had retired 4 years after starting up Microsoft, how many people would even know his name now?
Rather than trying to identify people who've famously walked away after a few years and comparing them to the number of famous people who didn't, a far better measure would be to find random 20 entrepreneurs who have only been doing it for a couple of years and see how many of them are still doing it, either with the same company, or with a new company, in 10 years time.
The very fact that you don't know them could support the point. In science, this is known as survival bias.
It's a mistake to argue that the entrepreneurs you read and hear about must be representative of all entrepreneurs. It's quite likely that the ones most likely to become serial entrepreneurs will remain visible, and the ones who stop after a successful exit are less likely to remain in the field.
It's a mistake to argue that the entrepreneurs you read and hear about must be representative of all entrepreneurs. It's quite likely that the ones most likely to become serial entrepreneurs will remain visible, and the ones who stop after a successful exit are less likely to remain in the field.
Quite right. There's a lot of people that just start one business and then stay with it for the rest of their working life. Then there's a lot of people that start something, decide that it's not for them, then go back to join a company. If your news only comes from techcrunch and venturebeat, you're missing out on these stories.
Marc Andreessen,
Ben Horowitz,
Robin Klein,
Bill Gates,
Silvio Berlusconi,
Michael Bloomberg,
Niklas Zennström
Marc Andreessen: cofounded Netscape and then OpsWare and Ning and now is a VC. Serial to the max.
Ben Horowitz: Opsware and then VC. A Morten Lund character.
Bill Gates: already addressed in both the article and another comment
Silvio Berlusconi: I don't know much about his business history, but a quick glance at his Wikipedia page shows he started multiple businesses. Definitely not a one-business-and-retire type.
Michael Bloomberg: Ok, that one may be an example.
Niklas Zennström: Skype, Kazaa, Joltid, Joost, and now a VC. Serial to the max.
Ben Horowitz: Opsware and then VC. A Morten Lund character.
Bill Gates: already addressed in both the article and another comment
Silvio Berlusconi: I don't know much about his business history, but a quick glance at his Wikipedia page shows he started multiple businesses. Definitely not a one-business-and-retire type.
Michael Bloomberg: Ok, that one may be an example.
Niklas Zennström: Skype, Kazaa, Joltid, Joost, and now a VC. Serial to the max.
With people like Gates you could also argue that they create 'new' startups through their existing organisations. Why wouldn't you if you have a brand, distribution, etc that were hard-won?
Also, Gates went on to set up the Bill and Melinda Gates Foundation, which is arguably a different kind of startup.
Also, Gates went on to set up the Bill and Melinda Gates Foundation, which is arguably a different kind of startup.
Even Bloomberg is almost a serial entrepreneur. Effective, memorable politicians must be to some extent entrepreneurial--you have to believe in your own ability to create change and to unify people behind your cause.
Mitt Romney (who founded Bain capital), Bill Gates, Pierre Omidyar to name a few
Romney might be a rare exception - though it is debatable whether he ever ran a startup by the typical definition, since from inception, Bain Capital was pretty damn big.
Bill Gates I've addressed in my article. If Bill Gates had been kicked out of MS in, say, 1985, he would most likely have done what Steve Jobs did, and started another business.
As for Pierre Omidyar, he has started something called Civil Beat, an online news service, as well as Omidyar Network, which is an investment firm, which would put him halfway between the typical case and a Morten Lund case.
Bill Gates I've addressed in my article. If Bill Gates had been kicked out of MS in, say, 1985, he would most likely have done what Steve Jobs did, and started another business.
As for Pierre Omidyar, he has started something called Civil Beat, an online news service, as well as Omidyar Network, which is an investment firm, which would put him halfway between the typical case and a Morten Lund case.
Great quote to finish:
"It means you should not burn relationships, piss off people, take damaging shortcuts - because you're in this small world of entrepreneurship for a long time to come. It means you should always act as if your behaviour as a founder will be with you for the rest of your career - because it will." so true. Thank you!!
Funny I thought the same thing, I've been in business for almost 30 years now and I can still call people I worked with 25 years ago and they will work with me in an instant. The number of times I have looped back around and ran into the same people over and over is funny. Especially considering over time I have moved through many different industries.
The golden rule applies to to entrepreneurs too. Karma is a bitch and worth paying attention to in life as in business.
The golden rule applies to to entrepreneurs too. Karma is a bitch and worth paying attention to in life as in business.
Great essay, though I don't think it's precise in how it characterizes pg's status as a serial entrepreneur.
There's no doubt YC is a second startup, but it's still sort of a unique case or meta-startup that serves pg's prior stated interest, as quoted in the essay, in not fully facing the risks and schleps of a normal startup. I believe I remember pg writing somewhere that he didn't want to repeat the giant risk of a normal startup, and he saw YC as a way of taking a diversified portfolio approach to startup involvement, of smoothing out the risk (and schleps) of a startup.
So, I don't think the essay is precise in simply characterizing pg as saying he shied away from doing another startup until he changed his mind and did one anyway. Instead, he came up with a kind of startup that he could get into that didn't require changing his mind about his approach. (At least, that's how I understood it.)
There's no doubt YC is a second startup, but it's still sort of a unique case or meta-startup that serves pg's prior stated interest, as quoted in the essay, in not fully facing the risks and schleps of a normal startup. I believe I remember pg writing somewhere that he didn't want to repeat the giant risk of a normal startup, and he saw YC as a way of taking a diversified portfolio approach to startup involvement, of smoothing out the risk (and schleps) of a startup.
So, I don't think the essay is precise in simply characterizing pg as saying he shied away from doing another startup until he changed his mind and did one anyway. Instead, he came up with a kind of startup that he could get into that didn't require changing his mind about his approach. (At least, that's how I understood it.)
This was extremely well written. A very nice change from typical meta-startup fare. Nicely done!
I enjoyed and agreed with most of this. I've never understood the term "serial entrepreneur" beyond the idea that it solidifies the fact that a certain individual has sold ( if that should be their goal - not mine ) more then one company.
Ultimately all entrepreneurs come from the same cloth of success driven business (value) invention. Some want to follow the hollywood IPO story. Some want to bootstrap. It's all a matter of preference beyond those details and to some it's not about being defined as a "serial entrepreneur". Personally I wouldn't sell my company just to start another until I met my professional goals.
Ultimately all entrepreneurs come from the same cloth of success driven business (value) invention. Some want to follow the hollywood IPO story. Some want to bootstrap. It's all a matter of preference beyond those details and to some it's not about being defined as a "serial entrepreneur". Personally I wouldn't sell my company just to start another until I met my professional goals.
I'd probably be described as a "normal" entrepreneur. I worked on five startups, the last of which had a reasonably successful exit. I haven't started another company since. A company isn't the only "laboratory of ideas", and money let me explore some other options. I'm in a PhD program in mathematics now. I didn't avoid starting a company because it is hard work. I agree, starting a company had an addictive intensity that is hard to find elsewhere. Will I start another company some day? Maybe. Would I ever have a "normal" job again? No way.
Isn't a serial entrepreneur any entrepreneur that hasn't created a company as large as Google or Apple or Microsoft?
In tech, it's possible to iterate indefinitely until reaching such size that it no longer requires a completely new company to be motivated to go on.
In tech, it's possible to iterate indefinitely until reaching such size that it no longer requires a completely new company to be motivated to go on.
Another perspective; can you call yourself a true entrepreneur if you haven't had more than one entrepreneurial endevaour (I'm not talking that you need to have IPOd a tech company before but rather had a lemonade stand as a kid and vice versa)?
When I read a question that gets into what or is not a "true entrepreneur" all I can think of is:
http://en.wikipedia.org/wiki/No_true_Scotsman
which suggests to me that debating over labels like "true entrepreneur" (or not) or "serial entrepreneur" (or not) is a waste of time.
The same discussion also smacks of a sort of elitism that I associate with the idiots to run around talking about what metal bands are or aren't "tr00 kvlt". None of this strikes me as very productive.
http://en.wikipedia.org/wiki/No_true_Scotsman
which suggests to me that debating over labels like "true entrepreneur" (or not) or "serial entrepreneur" (or not) is a waste of time.
The same discussion also smacks of a sort of elitism that I associate with the idiots to run around talking about what metal bands are or aren't "tr00 kvlt". None of this strikes me as very productive.
Great article. It's hard enough to choose one idea from all of the great ideas "I think" I have.
If I'm successful on my first venture, there is no doubt I'll try again with something new.
If I'm successful on my first venture, there is no doubt I'll try again with something new.
I'm trying to go the other way. I'm trying to decompress 20 years of work into 40. I'm not much of one for schleps, I guess.
I often debate on going back to start company six, and many saturdays my circle of friends hold "startup circle" where we pitch ideas and push a couple small projects forward and debate on quitting our real jobs and going back to building another company.
I would say the best realization of this article is that entrepreneur is a state of mind. A willingness to create from nothing in the face of extreem adversity. I have been a developer for close to 30 years now also and it's very much like that first couple of hours when you stare at the blank screen thinking about the 100,000's of lines of code needed to build whatever system it is you're about to build. Except it's more addicting then that because the scale is so much larger and your "vision" collides with "reality" and becomes something you can influence but often you end up along for the ride.
I personally would bet it's the same reason professional bull rider's ride bulls. Most of us look at them like they're insane but they have this zen approach to managing risk and the randomness of the bull trying to kill them. And when they beat the other guy the "high" must be quite insane.
Entrepreneurs suffer from the same sort of bold blindness. I have spoken with many people over the years who ask me "how can you do that, how do you get out of bed every day and just push forward" and I tell them I just like the challenge. To them they see me risking my family, my house, my car and my career to do something that scares them to death. To me I see the opportunity to express something that burns in the core of my soul and make something from nothing on a scale that should scare me but really just excites me!
I think the saying "40 years of work in 4 years" is a bit unfair, the reality is if you love what you do and are passionate about it you can work like this in a company that already exists or a mid-term C round start-up and have a lot of fun and potentially be well rewarded. That part is just the workaholic that might give an entrepreneur slight edge and a chance to ride the bull just a bit longer then the next guy.