What Does It Take to Become a Serial Entrepreneur?
An entrepreneur comes up with an idea and creates a new business out of it, facing a great deal of risk with the possibility of reaping significant rewards down the road.
While your average small business owner might start and run a single business for their entire life, serial entrepreneurs go through this process multiple times. Serial entrepreneurs often sell a business once it achieves a certain level of success so they can move on to their next business (ad)venture.
I’ve had the opportunity to work with a few serial entrepreneurs over the years. Many were customers or investors in companies I joined, so I got to know quite a bit about their motivations and drive. In this post, I’ll offer some perspective on the mind of a serial entrepreneur so you can see if running multiple businesses might be something in your future as well.
Why Do People Start Multiple Businesses?
“Only about half of small businesses, 45-51 percent according to the Small Business Association, survive the first five years. For entrepreneurs who do make it, only half reported experiencing more career certainty.” - John Boitnott, Entrepreneur.com
Starting a business is hard. There’s no way around it, but those who do manage to successfully get something off the ground are much more prone to becoming serial entrepreneurs than those who fail the first time around.
This isn’t surprising, though. Running a business once gives you a lot of unique skills and a much stronger network than most employees will ever get. Here are a few reasons I’ve seen serial entrepreneurs make the plunge a second or third time.
1. The Fear Has Been Conquered
Once an entrepreneur launches their first business, they have overcome one of the biggest barriers to entrepreneurship: the fear of failure. The positive momentum that comes from simply stepping out on one’s own to run a company will make a huge impact on future career decisions.
Even if their first business fails, many entrepreneurs pursue new ventures anyway. They use their previous failure as a stepping stone to achieve better outcomes because they’ve already seen that the worst-case scenario really isn’t that bad.
Wayne Huizenga, one of the world’s most successful serial entrepreneurs, launched three multibillion-dollar companies in different industries. After succeeding with his waste collection business, he applied the same expansion techniques to create the iconic Blockbuster brand. Then, he built a third multibillion-dollar company after selling Blockbuster to Viacom.
2. Connections and Skills Transfer
All the skills that serial entrepreneurs learn from their first business, as well as the connections they make, are very useful for future ventures.
Take Steve Jobs and Steve Wozniak, for example. They worked on a lesser-known venture called Blue Boxes before creating Apple. Through their first business, they learned how to work together, and they honed their engineering, leadership, and sales skills for their next venture.
Experience is a valuable takeaway from starting a business. Part of the reason my company took off in 2021 was my previous experience working with startups. I was able to avoid many of the mistakes I witnessed firsthand as an early employee and I learned a lot about other areas of the business by being so close to the founders.
3. Funding Options
If an entrepreneur sells their first business, they’re likely to bring in a big chunk of money all at once. Even if they don’t, a profitable business may spin off millions of dollars of cash flow every year that the entrepreneur can then use on their next company.
Self-funding is just part of the equation though. Investors are much more likely to fund entrepreneurs with a successful exit under their belts already. Knowing that an entrepreneur has gone through the process before helps de-risk their future business ventures and get them better valuations.
4. Failure is a Motivator
As I already mentioned, half of new small businesses fail. Failure is often motivating to entrepreneurs.
Many serial entrepreneurs move on to new ventures because of previous failed attempts. A University of Michigan study showed that entrepreneurs who have the courage to try again have a better chance of succeeding in subsequent ventures.
At its prime, Blockbuster was a multi-billion-dollar company, but Huizenga was unable to adapt to changing technology trends. This forced him to sell Blockbuster in 1994 to the media giant Viacom, but true to this pattern, two years after selling Blockbuster, Huizenga started AutoNation, which would eventually become another multibillion-dollar operation.
Famous Serial Entrepreneurs
I love a good story of the entrepreneurial spirit, so while you may have heard some of these tales before, I’ll share them again. Here are a few of the most successful and well-known serial entrepreneurs in the world:
Everyone knows Steve Jobs for co-founding Apple with Steve Wozniak. However, not many people know that the pair had a previous less upstanding venture called the Blue Box (which I mentioned above).
In Walter Isaacson’s biography on Jobs, he shared how the device allowed users to make long-distance calls without any cost. Selling for $170 each, the Blue Box venture was doing quite well up until the duo was held up at gunpoint.
Recalling his invention, Jobs told Isaacson that Apple wouldn’t be here if they didn’t do the Blue Boxes. Although brief, that venture helped them realize what they can do with their engineering skills. They also gained the confidence to solve technical problems.
Apart from Apple, Steve Jobs invested in Pixar and transformed it into a leading figure in animation before selling it to Disney for $7.4 billion. He also founded a new company called NeXT, which focused on specialized, high-end computers. The NeXTSTEP operating system became the foundation for the Mac operating system we all know today.
Andreas von Bechtolsheim
Andreas von Bechtolsheim is a German electrical engineer who co-founded Sun Microsystems in 1982. He served as the company’s chief hardware designer and was instrumental to its early success. In the ‘90s, he left Sun Microsystems to build Granite Systems, which developed high-speed network switches. Just within a year of its launch, Cisco Systems acquired the company for $220 million.
Bechtolsheim’s entrepreneurial journey didn’t stop there.
He created Kealia in 2001, which was a server technology company. In 2004, it was acquired by Sun Microsystems. Eventually, he co-founded other ventures, including Arista Networks and HighBAR ventures. He was also one of Google’s earliest investors, investing $100,000 in the now-ubiquitous company before it even became Google, Inc.
Bechtolsheim’s story is interesting because he clearly could have retired at any point and spent the rest of his life on a beach. But, like most serial entrepreneurs, Bechtolsheim is not one to sit back and relax for very long.
Sir Richard Branson
Sir Richard Branson is an English business magnate who received a knighthood because of his many services to entrepreneurship. At 16, he founded his first magazine and went on to found Virgin Group in the 1970s.
Virgin now owns over 400 companies in different industries, including radio stations, record labels, hotels, airlines, and many others. His businesses bear the Virgin brand name, such as Virgin Atlantic and Virgin Galactic.
Recently, the spaceflight company Virgin Galactic, which Branson 17 years ago, soared over 50 miles above the New Mexico desert with the British billionaire in it. The passenger rocket plane landed safely, making its first fully crewed test flight to space a success.
Branson is unique for the range of his success. As you might imagine, running a record company is much different from running a hotel or an airline, but he credits the company’s success to having a good time.
“Fun is one of the most important—and underrated—ingredients in any successful venture.” - Richard Branson
I’ve already touched on Huizenga’s story above, but I’ll get into more detail here. Huizenga founded three multi-billion-dollar companies in different industries—Waste Management, Blockbuster Video, and AutoNation.
He borrowed $5,000 from his father in the 60s, which he used to buy a single garbage truck. In five years, he was able to add 100 other waste collection businesses to the conglomerate, turning it into one of the largest waste disposal companies in the country.
Huizenga used the same expansion techniques he learned from his waste business to create the famous video rental shop Blockbuster. Not long after, he was opening new rental shops across the US. Just two years after selling Blockbuster, he launched AutoNation, an automotive retailer, which would eventually become a multibillion-dollar company as well.
Of course, not all serial entrepreneurs are white men and they are not all in technology either.
Oprah Winfrey is one of the most successful entrepreneurs in the world (and from my home city, Chicago). She started her career as a TV anchor for a local station before being asked to host a morning show called AM Chicago *. * After receiving accolades for her work, the show was renamed The Oprah Winfrey Show and broadcast nationally.
In the 80s, she started Harpo Production Inc. and negotiated ownership rights to her TV show. This would become the foundation for later business ventures. She co-founded a cable station called Oxygen, launched O, The Oprah Magazine, and created the Oprah Winfrey Network.
Unlike Branson, Winfrey’s businesses have all been a little more closely related, but that strategy is probably more common. Having tangentially related businesses can allow each to help the other depending on what’s needed.
Success as a Serial Entrepreneur
Becoming a successful entrepreneur is hard, but becoming a successful serial entrepreneur is taking it to a whole new level. While I can’t claim a lot of personal experience in this realm, I’ve been fortunate to get to know a few serial entrepreneurs well enough to see some commonalities.
Start Small, Get More Ambitious Over Time
Some of the biggest businesses in the world had humble beginnings. As mentioned, Huizenga built an empire from a single garbage truck. Little by little, he nurtured his business until it became one of the most successful companies in the US.
Serial entrepreneurs aren’t extreme risk-takers. They don’t gamble their money on random business ventures and hope that it would give them positive returns. These successful entrepreneurs take calculated risks that slowly build over time. They always weigh the risks and rewards before making a final decision.
“Often the difference between a successful man and a failure is not one’s better abilities or ideas, but the courage that one has to bet on his ideas, to take a calculated risk — and to act.” - Maxwell Maltz
Whether you have a finite amount of resources like Huizenga when he was starting out or you simply want to minimize risks, you don’t have to gamble everything in one venture. You can start small. As your business grows, set higher goals and work hard until you reach them.
Learn How to Delegate
Knowing how to delegate tasks to direct reports is a skill that you must master if you want to become a serial entrepreneur.
As you create more businesses, your responsibilities will grow increasingly complex, and you have to use your leverage to get more done without working more hours. You must hand over the reins to other capable individuals.
If, say, you want to take a step back from your first business to pursue a new venture, you need to choose someone with the skills, training, and experience to run it. The same goes if you’re entering an industry that you aren’t entirely familiar with. Finding the right partners and delegating responsibilities can help you improve your success in unfamiliar fields.
Reinvest Money in Future Businesses
Once your business starts making profits, you can invest in future business ventures. The trick is, instead of spending all the money you’ve gained or letting it sit in passive investments like stocks, you have to put it back to work in a new entrepreneurial endeavor. This cash flow can become a stable foundation for a second or third business.
The more businesses you start, the better you become. You’d be more knowledgeable and experienced. Thus, your future investments would have higher chances of success.
Be Open to Change
Entrepreneurs must be adaptable. You must have the ability to change as your industry or environmental factors shift. You can build an adaptable business by leveraging technology to understand consumer behavior, the players, and the industry. At the same time, you can use technology to better understand and meet the needs of a changing workforce.
Nurturing a culture of adaptability enables you to create a more resilient business, where your people are able to contribute solutions that help your business thrive.
Build a Network
Networking is the process of establishing mutually beneficial connections with other entrepreneurs in the industry who can be potential mentors, business partners, or clients. Through your network, you can gain crucial insights into fields you aren’t familiar with. Together, you can also exchange ideas and identify market opportunities.
For budding entrepreneurs, your network is one of the first things you can focus on building. Having a reliable network of consultants can make it easier for you to navigate the early stages of your business, which is often riddled with obstacles and challenges. Your network is a valuable resource that provides you with timely and reliable advice that can move your business forward.
For serial entrepreneurs, your network is often the unique advantage that helps you outpace your competition. The earlier in your first business, you focus on building and cultivating your network, the better you’ll be set up for the next one.
Don’t Give Up
Entrepreneurial skills are honed through experience and failure.
One of the biggest fears that prevent people from starting multiple businesses is the fear of failure. Everyone experiences failure in some way, especially those of us who found start-ups. Failure can be intimidating, but it can teach you many important lessons too. Remember that even the most successful serial entrepreneurs and visionaries have experienced failure. Steve Jobs launched several failed products—Apple Lisa, Macintosh TV, and Apple III.
So, don’t give up. Take any failed venture as an opportunity to rethink your vision and processes. If you give yourself the chance to look back and reflect on what went wrong, you can make better decisions moving forward.
Looking for more great reading material as you start your next business? Here are over 20 of my favorite books for startup founder* s.