Serial Entrepreneur or Serial Failure?
Through networking or online, have you ever run into people who proudly declare that they are serial entrepreneurs, like it’s a badge of honor? In some cases, it truly is an accomplishment. But in many cases, this self description is merely a cover for being a serial failure at starting and running a business. I’m always tempted to ask, “How much did you sell your last business venture for?” Sadly, I fear the answer may be zero or a loss. Or they might have just shut down without selling.
True, being able to call it quits on an idea, project, profit center, or entire business that is not succeeding, and move on to something else, takes guts, especially if it took a hefty investment of time, effort, emotion, and money. However, if that effort was jettisoned without a careful analysis of why it didn’t thrive and how to avoid the same result in the future, the potential for becoming a serial failure increases.
You’re No Fun Anymore
Launching a new business is a fun, exciting, adrenaline rush. Then, when faced with the daunting daily tasks of accounting, administration, management, marketing, etc., entrepreneurs can get disenchanted with the whole thing, even to the point of just giving up and closing the business. Serial entrepreneur/failure alert!
As I emphasized in my book, Small Business Failures Solopreneurs and Self-Employed Consultants Need to Avoid!, this behavior is akin to running a kid’s lemonade stand. It’s something fun to do... for now. But when it gets tough, or when something more exciting (like another new business opportunity) comes along, the business comes to a screeching halt.
Consequences of Being a Serial Entrepreneurial Failure
While there may be less financial loss associated with rapid and frequent starting and closing small businesses these days, there are a number of issues that this behavior can cause:
It Becomes a Habit. Entrepreneurs who are addicted to the rush of a new business launch have their focus trained on the next new shiny object venture. Like addicts, they’re always looking for a bigger, often riskier, hit which can jeopardize their futures in so many ways.
It Can Hurt Or Confuse an Entrepreneur’s Brand. This is the “So what are you today?” problem. The entrepreneur has so many business identities that it’s difficult for customers and colleagues to figure out what he is or what he stands for because it keeps changing. Though mega entrepreneurs (e.g., Richard Branson) have pursued many different types of ventures in their entrepreneurial careers, for the majority of small scale entrepreneurs and solopreneurs, having too many business identities is not a way to build trust and sales.
It Can Drain Resources. This is like the stop-and-go traffic problem for cars. It takes a lot of energy to get going from a complete stop. So the car's fuel efficiency is lowered in stop-and-go driving. Same for businesses. Though today it's easier and less expensive to start a small business than it’s ever been in history, new ventures can take a huge toll in terms of time, talent, stress, and cash. This results in low or no profits that can be used to sustain the business for continued success and, ironically, even lower the business’ ability to invest in more new ventures. A vicious cycle.
It Becomes an Excuse. Not making a profit? With the huge investment in serial ventures, it’s not surprising. So it becomes easy to emotionally justify being unprofitable and a failure.
What’s the ROI?
Ever watch the reality show Shark Tank? (Must-see TV for me.) The investor “sharks” are looking for how their investment in any featured entrepreneurs’ business will make them a profit. They’re looking for ROI.
Entrepreneurs would be well advised to think more like the successful shark investors. This means not being in love with the process of starting businesses, but being in love with the outcomes!
Thinking about outcomes may also entail thinking about exit strategies. What conditions will prompt a business closing decision? How will be business be closed? These are not motivating questions for those who just like starting businesses, but necessary ones to ask nonetheless.
Questions & Answers
© 2017 Heidi Thorne