I recently heard a mentor colleague of mine refer to their client as a serial starter. That statement got me thinking about where much of the advice offered to entrepreneurs really comes from. Is the advice from a serial starter or a serial entrepreneur? In fact upon reflection, over 90% of the people I see as clients and even some of my peers that call themselves serial entrepreneurs are actually serial starters as they have yet to have a truly successful business venture.
Here is how I define each:
- Serial starters are the people who have started several enterprises but have yet to successfully finish developing any of them. These serial starters tend to lack the needed commitment. When the going gets tough or mundane, they tend to quit and move to the next venture. I believe that the vast majority of folks who consider themselves to be serial entrepreneurs (including many business advisors and influencers) are in fact just serial starters. Serial starters have played the game of business but not won.
- In contrast, serial entrepreneurs are people who build a series of successful businesses and realized the full potential of each business. They stick with each business through thick and thin until it either reaches a natural conclusion or a successful exit through a sale or the founder passes along the business to a stage 3 or stage 4 CEO before they move on to the next business. While serial starters have played the game of business, the serial entrepreneur, in my definition, has not only played the game but has also won the game.
Let’s face it, it is easy to start a new venture. Like a new toy, a new venture can be fun and motivate at first. Then, after a few months, it may no longer be much fun because that’s when the real work begins. The founder’s motivation often drops as they change gears from creating something new, which is always exciting, to operating the actual business, which is often boring with flashes of sheer terror thrown in.
The constant sales call with their accompanying rejections, dealing with cash flow issues, unreturned emails, employee issues and/or sourcing problems, each serves to suck the fun out of a new venture. Serial starters grow weary of the effort associated with operations and look to the next business idea, rather than finishing what they started.
Serial entrepreneurs differ from serial starters in what I have sometimes heard referred to as “grit.” Wikipedia defines grit as the “perseverance and passion for long-term goals”. It is grit that banks look for when they provide small business loans to a business only after the founders have proven that they have what it takes to weather a few storms.
There were several times during my business career when I was so worn down with business issues that I wanted to just quit, but I never did. There was one time when a major contract was suspended by the customer after about 6 months as they reassessed the program’s direction in light of an acquisition. The projects suspension left us in such as cash flow lurch that I don’t think I slept for a month while I negotiated longer payment terms with vendors as we tried to hammer out a settlement agreement for the project’s early termination. Some days, I felt so burned out by this incident that I considered just closing the doors, but my grit didn’t allow me to. Instead, I lived in daylight compartments and vowed each day to live just one more day until the settlement was eventually agreed to and we reached the light at the end of the tunnel. About a year to a year and a half later, we sold the business to a public traded company and achieved a successful exit where we all made a lot of money. Several years later, we did it again and achieved another successful exit.
I don’t want to imply that you have to sell your business to be considered a serial entrepreneur. Sometimes a business comes together to solve a particular problem and when the goal is accomplished reaches a natural end. However, when it comes to business advisors, I think there is a real difference between a serial starter and serial entrepreneur.
Taking business advice from a person who just played the game of business and started a bunch of businesses that they folded when the going got tough or never got any traction may not be the advice you should bet your future on. However, taking business advice from a person who won the game of business and started a business and uses his or her grit to complete the journey and see the business to its natural end, whether it is the sale of the business or achieving the business’s objective I think is a better bet.
Are your advisors’ serial starters or serial entrepreneurs?
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