Entrepreneurship can be addicting. Once you’ve learned how to become an entrepreneur, chances are you’ll get to work right away. Entrepreneurs are creative, risk-taking, and business-savvy; they possess all the unique qualities that make starting a business possible. They make amazing businesses out of simple minimum viable products and turn concepts into reality. Being an entrepreneur is something you should be proud of.
Serial entrepreneurs are people who continue launching businesses, one after the other. Famous examples of serial entrepreneurs are clear examples of how successful serial strategies can be; Elon Musk, Richard Branson, and Evan Williams all created numerous businesses that did well. Entrepreneurs like them have seemingly mastered the art of rising and selling. However, serial entrepreneurship isn’t as easy as it seems and is certainly not a likely path to success. For every successful serial entrepreneur, there are many more that failed. With that in mind, here’s what you should about serial entrepreneurship:
Solve Problems, Not Profit
If your motive behind selling or leaving one business to start another is fueled by potential profit, you’re going down the wrong road. One commonality you’ll find among successful entrepreneurs is that they search for solutions to problems—often problems that they’ve encountered themselves. They aren’t tracing dollars and seeing where it goes. Great businesses are built out of real needs.
Richard Branson created his airline only after a delayed flight left him and several others stranded on an island, prompting him to charter a flight and accept payment from stranded passengers for handling the charter and charges. With this, he noticed there was something missing in the travel industry.
Dangers of Low Commitment
The thrill of starting a business can be addicting. For some entrepreneurs, the driving force behind starting a business is nothing more than the adrenaline that comes from creating something new. But unfortunately, this lack of commitment can create major problems in the process.
First and foremost, if your mind is always on the next big idea, then you cannot properly put your all into the current business. Second of all, to many investors, serial entrepreneurship isn’t appealing. Investors want to see dedication and passion from their founders, whether they’re working people who turned their hobby into a business or with someone who found a niche with high-profit potential. If you’re business hopping, it could reflect badly on your commitment and demonstrate that no matter how good of a proposition you offer, you’ll likely leave the company soon, leaving investor dollars in the hands of someone else—or shutting down shop entirely.
Validate Your Idea
Like any business, you need to validate your idea before you start funneling dollars into your business. One of the biggest reasons that many entrepreneurs see mild success and fail at turning their venture into something hugely profitable before they move on is that they don’t validate their businesses properly.
Ensuring there’s a market for your product is a huge first step. Market proof is about so much more than talking to your friends and family; instead, you’ll have to put your concept on the frontline and see how your target market reacts. Ideas that seem great don’t always have a market, and sometimes great ideas are too early or too late. This is something you’d only find out if you went out and surveyed, ensuring that your business venture has real legs.
There are many reasons why a founder would proceed without business validation. For some, it’s the deep-seated fear of rejection; for others, they believe testing the market would cost money they can’t afford to spend. Think about the barriers preventing you from testing the market and work to address those concerns before you take the next step. It will only benefit you in the long-run.
Maintain a Healthy Risk Tolerance
Risk and entrepreneurship go hand in hand. After all, there has to be a certain degree of risk involved in starting something from scratch and building it from the ground up. Although risks are unavoidable and necessary when starting a new venture, there’s a certain amount of personal and professional risk that you shouldn’t be willing to take. Wild entrepreneurs can cause serious disaster in many aspects of the business; they can hurt the brand’s reputation and cost a lot of money.
Naturally, serial entrepreneurs take more risks. Each business is a new set of risks that opens up a new set of potential problems (albeit rewards). As an entrepreneur, it’s your job to maintain a healthy risk tolerance. You don’t want to gain a reputation for starting a series of failed businesses, and you certainly don’t want investors and banks viewing you as a risky investment.