What is a Serial Entrepreneur?

Are you a serial entrepreneur

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Serial Entrepreneur

A serial entrepreneur has created several companies. Some failed, others were sold. He loves new opportunities and the excitement of producing more than ensuring the day-to-day management of a business. It is not the number of companies created that defines the serial entrepreneur, but instead its mentality and its values. Innovation is its top priority, and the monetary gain is incidental. When a company reaches its cruising speed, it sells it to start a new one.
The meteoric growth of the Web and new technologies have given rise to a whole generation of entrepreneurs, most of whom are even serial entrepreneurs, in search of new opportunities, always in movement, still in the trend. But then, what is a serial entrepreneur? What is his typical profile? And you, are you the serial entrepreneur in the soul?

What is a Serial Entrepreneur?

You have created two, three, ten companies? You may be a serial entrepreneur, which means “serial entrepreneur,” a person who has created several companies …; but is it a serial entrepreneur?

These leaders always have a project in mind. In search of opportunities, Serial Entrepreneurship fascinates them, so much so that some make creation – resale of business activity in its own right, whatever the sector concerned.
“These are entrepreneurs driven by a fierce desire to create, says Jean-Louis Muller, Cegos group director, serial entrepreneurs represent a category of leaders in their own right.”

The Profile of the Serial Entrepreneur

It is what differentiates the serial entrepreneur or Serial Entrepreneurship from the entrepreneur: the passion for business creation. You can develop several projects during your life without feeling like a serial entrepreneur.

According to the observations made by the networks of financers and accompanying persons to the creation of a company, the serial entrepreneur is recognized by several aspects. It is first of all his enthusiasm to create a company, which is to say to mobilize his teams, to study opportunities, to develop a strategy, to the detriment of the operational or daily management functions. The serial entrepreneurship likes to create, less developed. Often, these leaders leave the hand once the company is on track to focus on developing a new project.

The serial entrepreneur does not financially benefit from his business. As soon as it begins to stabilize its margins and profitability, it goes to other skies. It is not the money that drives these leaders, but the challenge of success, the frantic pace of creation, the excitement of uniting a team.

The serial entrepreneur evolves mainly in the new technologies and the web because these sectors know breakneck growth. The leader sets up his business and can quickly leave the company to identify the excitement of creation again. To give an example, the industrial sector has long cycles. Projects take a long time to become profitable, and the initial investments are often much more substantial, which corresponds less to the expectations of the serial entrepreneur, even if it is not a generality, of course.

Are you a Serial Entrepreneur?

Do you like corporate strategy, improve your network, mobilize teams? Conversely, do you balk at day-to-day management? Are you bored with the business manager’s routine? Are you more excited by the idea of having built something of your skills than the money you could make? You do not want to rest on your laurels? You always have a project in mind, do you like to learn about new trends? You are surely a serial entrepreneur having Serial Entrepreneurship at heart! When will the next company?Watch Out for Danger!

Serial entrepreneurs, those who started several businesses during their career, amaze me. Starting a business requires courage, hard work and a lot of optimism. Those who have done, do and re-do the process are particularly tenacious and immensely optimistic.

They trust their good stars and their ability to succeed. They are convinced of the relevance and popularity of the product or service they have developed. They believe that the economic and market conditions are conducive to the success of their business. For them, the future is always rosy, even after a failure. This upbeat optimist is an immense quality, but he also hides a great danger.

This often leads them to commit themselves to hazardous projects, to ignore enough unforeseen circumstances and to continue to invest instead of recognizing that the company is heading straight into the wall.

For all their qualities, serial entrepreneurs would not learn from their mistakes, and many of them would fail … in series. A study done by three British professors and quoted in the latest edition of the Harvard Business Review is very hard on them.

The three researchers surveyed 576 British entrepreneurs from all sectors. Just over half of these entrepreneurs (298) started at least one-second business. 34% of them have failed. Serial entrepreneurs are responsible for 59% of these failures.
They have seen a clear difference between serial entrepreneurs having own multiple businesses at once and manage them as a portfolio of assets and those who are invested in one company at a time. These are the latter who would be mainly “dangerous.”

Why would they be? Because they invest a great deal psychologically in their projects, they tend not to take responsibility for failures and to learn the appropriate lessons. It is always the others or the external conditions which would explain the disappointments. It’s good for their self-esteem, but it would prevent them from analyzing what happened and what their shortcomings were.

Myths and Realities of Serial Entrepreneurship

I have always been wary of the concept of serial entrepreneur that creator who, according to Wikipedia, “continually produces new ideas and starts new businesses, as opposed to the typical entrepreneur, who comes up with an idea, starts his business, and then continues to play an important role in the day-to-day operation of his company. Why such bias if we consider the exceptional career of the serial entrepreneur like Steve Jobs (Apple, Next, Pixar), Elon Musk (PayPal, Tesla, SpaceX) or the almost-English “rock-star” Richard Branson who has declined the word Virgin in music, mass distribution, air transport and mobile communications? Because my experience, the idea of foraging from one idea to another seems insufficient to me if one does not devote a considerable amount of energy to marketing it over the long term? Not, since the three examples cited show that it may be, not superficial hyper-activity, but the success of products or services consecutive to a total commitment of their creators.

My mistrust has built up over time because except some mythical characters always cited as examples for good reasons, I was convinced of recurring “patterns” that the example of Steve Jobs illustrates quite well: he will never have done as well as with Apple, his first creation. A few years ago, I began a statistical study of the “performance” of these serial entrepreneurs by comparing them to their more conventional counterparts [1]. The study of some 450 serial entrepreneurs in a group of more than 2,700 founders had given me exciting results: if on average, serial entrepreneurs do better than others at their first venture (the value created is superior with less investment), the trend reverses with the following, and from the third, they do less well by raising more money from their investors.

CQFD! Could this study be the result of a unique situation in Silicon Valley and Stanford? A 2011 survey of some 600 British entrepreneurs [2] shows that 60% of failed founders were serial entrepreneurs while they accounted for half of the sample. The authors are known as experts on the subject, and their numerous studies do not show in any case that the experience represents a real advantage. Could this study be the result of an unusual situation in Silicon Valley and Stanford? A 2011 survey of some 600 British entrepreneurs [2] shows that 60% of failed founders were serial entrepreneurs while they accounted for half of the sample. The authors are known as experts on the subject, and their numerous studies do not show in any case that the experience represents a real advantage.

Could this study be the result of a particular situation in Silicon Valley and Stanford? A 2011 survey of some 600 British entrepreneurs [2] shows that 60% of failed founders were serial entrepreneurs while they accounted for half of the sample. The authors are known as experts on the subject, and their numerous studies do not show in any case that the experience represents a real advantage.

If the facts seem to dismantle the myth, it is also interesting to continue the analysis. A serial entrepreneur, and more if he has an unbeaten track record, will have tremendous self-confidence and undoubtedly considerable seductive power to attract investors and talent for his future projects. He will be ready to take risks all the greater because, as he has already succeeded, the failure would have, for him, a lesser financial impact. The authors of the British study adds that those who failed have experienced such a trauma that they will repress this failure to the point of not learning anything from experience…

What lessons for those – investors or employees – who would be willing to follow such a hero blindly? No doubt it is necessary to be a little cautious and analyze with a bit of rationality if the project makes sense and if its creator seems a minimum rational in its vision of the development of this new project. In reality, success will always be in the realm of the exception, an unlikely alignment of planets.

An entrepreneur must still be optimistic, but if he loses sight of these realities too much, his blindness may be fatal. And I allow myself to add a message for the inexperienced entrepreneur: to listen too much to the advice of those who “know,” the entrepreneur may forget his little inner voice, this intuition so fundamental to every creator.

[1] Serial Entrepreneurs: Are They Better? – A View from Stanford University Alumni – Babson Conference “Frontiers of Entrepreneurship Research” 2012. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2133127
[2] Why Serial Entrepreneurs Do not Learn from Failure. By Deniz Ucbasaran, Paul Westhead and Mike Wright. https://hbr.org/2011/04/why-serial-entrepreneurs-dont-learn-from-failure.

Originally published at www.entrepreneuryork.com

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