We often hear about successful entrepreneurs that lead the way in disrupting various industries, especially in the field of technology. Key figures like the late Steve Jobs that founded Apple and Mark Zuckerberg of Facebook are often spoken of. How about serial entrepreneurs? Who are they and what are they made of? Brilliant examples include Elon Musk and Richard Branson, but what makes them different from other entrepreneurs?
The Business Dictionary defines the serial entrepreneur as someone who continuously comes up with new ideas and starts new businesses. As opposed to a typical entrepreneur, who will often come up with an idea, start the company, and then see it through and play an important role in the day to day functioning of the new company, a serial entrepreneur will often come up with the idea and get things started, but then passes the responsibility to someone else and move on to a new idea and a new venture.
Let’s look at the numbers to put things in perspective.
As of 2017, there are 400 million entrepreneurs worldwide. That’s roughly 1 in 18 people. In the United States, most of the 30.2 million small business is run by entrepreneurs (which is 99.9% of US employers). Why is this a big deal? For one, they create job opportunities through their businesses, filling the employment gap in the private sector. According to the US Census Bureau, 2.2 million jobs were created by about 414,000 startups.
Here’s a crucial fact to put things in perspective: In 2013, 67.3% of billionaires are self-made (960 out of 1,426 to be exact, according to Forbes). In that same year, 86.5% (830 billionaires) of the self-made were making money from multiple businesses. In short, most self-made billionaires in the world today are serial entrepreneurs.
What makes them tick?
While most argue it has a lot to do with luck and naturally-imbued skills, let’s look at the common traits these serial entrepreneurs have that makes them successful.
1. Excellent time management. Already a required component in being an entrepreneur, this is critical when you’re running multiple businesses at once. Serial entrepreneurs would need to juggle between various ventures at once, and they have spent years in developing the ability to compartmentalize and shift from one responsibility to another.
2. Ability to set concrete goals. A soft goal sounds something like “I want to be successful one day”. It is often arbitrary and unfocused. A concrete goal is “I want to develop a unique medical treatment technology that would bring in $5 million in sales revenue by the year 2020”. This goal is measurable, requiring the serial entrepreneur to plan and work hard to fulfil specific objectives.
3. Highly disciplined. Most people choose to embark on entrepreneurship because they want to be ‘their own boss’. Serial entrepreneurs are successful because they are highly passionate and driven, they don’t need people to tell them what to do and when to do it. Without a self-driving force, they would lose control and their ventures will surely fail.
4. Strong team, stronger leadership. There’s no way to grow multiple businesses without a strong team, and ventures are more likely to fail without strong leadership. While serial entrepreneurs can promote members of their team to take charge or hire new executives to handle various aspects of ongoing ventures, they themselves must possess a strong sense of leadership.
5. Know when to move on. Optimism, determination and perseverance is are key aspects of being an entrepreneur. It’s equally important for a serial entrepreneur to accept if a venture is not working, he or she must decide to move on to the next thing. After all, it is harmful to hold on to a misguided project that will exhaust energy, time and resources.
6. Drive to scale. Successful serial entrepreneurs can advance a business or venture quickly from the startup phase into something sustainable based on the intended growth. Serial entrepreneurs cannot move on to new businesses or ventures if they are unable to scale up quickly.
Venture capitalists and serial entrepreneurs.
Studies have shown that investments made by venture capitalists in successful serial entrepreneurs are likely to generate higher returns for their venture capital investors. The skills mastered by these individuals over the years is reflected in their track record, which in turn will attract top-tier investors. Serial entrepreneurs are empowered with a certain capacity, largely due to their ongoing businesses that are continuously making them money.
Therefore, serial entrepreneurs are highly capable individuals with proven track records, and are more likely to succeed in their next venture. Partnered with the right venture capital firm, a business can scale up more effectively based on the desired growth trajectory, ultimately benefitting all parties involved.
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Sources:
1. Gompers, Paul A., et al. “Skill vs. Luck in Entrepreneurship and Venture Capital: Evidence from Serial Entrepreneurs.” SSRN Electronic Journal, 2006, doi:10.2139/ssrn.933932.
2. http://www.businessdictionary.com/definition/serial-entrepreneur.html
3. https://www.business.com/articles/6-traits-of-highly-successful-serial-entrepreneurs/
