People start a business for different reasons. Some are former employees who got tired of rendering service to someone else’s vision. Others might have realized that exchanging your time for money is ultimately a limited form of income generation. And some believe in their idea and are brave enough to follow where it might lead.
How do you envision yourself a few years from now? If the answer is “selling my business,” then you might be headed down the road to serial entrepreneurship. While this path can prove extremely lucrative, getting it right isn’t a straightforward matter.
Defining success
With such variance in their underlying motivations, each entrepreneur will have their own definition of success. Becoming a serial entrepreneur won’t appeal to you if you’ve found your passion in the venture you’re running. It’s also incompatible with the long-term goal of leaving a legacy in the form of your business.
But every entrepreneur shares a common objective: finding a business model that works. Investors want to recoup their funds, and then some; founders need to make the whole venture worth their time and effort. And not everyone gets to nail that the first time around.
We all get better at doing things through deliberate practice and effort. And running a business is no exception. But companies can stagnate or fail for various reasons; grinding it out won’t help you learn if your idea doesn’t have an audience, for instance.
Serial entrepreneurs can move on from one venture to the next, take those hard-earned lessons, and apply them to a different situation with greater potential. This experiential learning increases the odds that founders will succeed.
Pitfalls of the wrong approach
However, the concept of the serial entrepreneur can be misinterpreted. With the wrong approach, a founder might not be able to reap the benefits.
For instance, there’s nothing wrong with negotiating a successful exit. You’ve invested far more energy in running a business than any employee. And you’ve also taken on far greater risk. Making money from the eventual sale is justifiable compensation, and it will help tide you over until you find something new.
But potential issues arise when an entrepreneur’s mindset becomes too focused on the financial part of their exit outcomes. It clouds their judgment and can lead to bad timing or even an incorrect decision to hand over their company to someone else.
In the big picture, becoming a serial seller does little good to the company itself. It promotes short-term attitudes and thinking. If you’re always looking to cash out while the financial picture is rosy, you probably won’t expend as much effort into finding solutions or ways to evolve and grow.
Ultimately, the loser of this flawed approach to serial entrepreneurship is the founder themselves. They don’t learn the hard lessons because they don’t have the mindset of grit and determination to see through tough times or absorb failure. And their capability for innovation is stifled; this negative effect will carry over to future endeavors.
Looking for the best outcome
The path of the entrepreneur is difficult compared to that of an employee. But it’s also liberating. You get to call the shots. Win or lose, you live by your decisions.
In this spirit of freedom, no one should feel bound to entrepreneurship. You shouldn’t feel obligated to continue running your business for the rest of your life.
That said, you need to know when to call it quits and do so for the right reasons. Otherwise, you risk developing bad habits that could compromise the next business opportunity. You can also end up jeopardizing your company, both the people and the concept itself, of the chance to make a real impact in the world.
How do you get it right? Be honest with your motivations and assess your skills. Are you holding back your business? Is there another individual who could take over the helm and lead the company to greater success?
Equally, consider the amount of energy you have left to give, and what lessons you’d be able to take away from the experience when it’s all over. If mistakes were made, would you be able to learn from them and avoid a repeat failure? Do you feel burned out, or are you just disappointed because you’ve conflated passion with external measures of success?
The best exit outcome would be a win for all involved. But if that’s not possible, you can at least try to come away with intangible benefits, and not just financial ones; this will set you up for future success.
