Both love to build businesses, but they can be radically different personalities. One embraces the possibility of risk, the other guards against it; one doesn’t like to get bogged down in the day to day and thinks 3 days a month is sufficient time to give a project provided you ask the right questions; the other frets about a weekend away. One thinks education is bunk – the other most likely studied beyond degree level, trying to squeeze every last drop of knowledge out of the system before they began what they saw as a one-time, lifetime project. Meet the serial entrepreneur and the one-time entrepreneur. Chalk and cheese?
There are always exceptions to the rule but based on evidence provided by a ground breaking study carried out by the Centre for Entrepreneurs on behalf of Coutts Bank, called “Beyond the first business, The Myths, Risks & Rewards Of Being A Serial Entrepreneur”, you might conclude that you’d always find the serial entrepreneur in the kitchen at parties, whilst the one-time entrepreneur, if they came at all, would probably hole up in the study, armed with a smartphone and laptop.
The study, completed at the beginning of March this year, quizzed 135 entrepreneurs, 76% of whom were “serial” entrepreneurs, and 24% one-time founders. 16% were under 35, 51% between the ages of 35 and 54, and 33% aged over 55.
The objective, according to Dylan Williams, Managing Director at Coutts, was “to understand the way the serial entrepreneurship story is changing between generations.” Millennials are starting businesses earlier, the research shows, and that means, according to Luke Johnson, Chairman of the Centre for Entrepreneurs, “by encouraging more first time founders to do it a second time, we should see more startups and higher survival rates, along with improved economic growth, job creation, living standards and innnovation.“
These are lofty ambitions, clearly, so does the research support the view that one-time founders should step away from the day-to-day and “do it all over again”, once they have built their first successful startup?
A lot of yes and a little bit of no. As suggested, serial entrepreneurs and one-time only founders appear to have quite clearly differentiated priorities, preferences and ideas about business. Predictably, serial entrepreneurs are less afraid to fail, and where one time founders see risk, serial entrepreneurs see opportunities.
Serial entrepreneurs think more about how they might exit their companies, and are more likely to have faced the reality of a business closure, the research shows, whereas one time founders are more familiar with stock market listings and international expansion, having grown their businesses for longer than their counterparts.
Curiously, neither list personal financial gain amongst their chief motivations for running a business, enjoying the competitive side and the contribution they are making to society more than the financial rewards on offer. Both say that external barriers, such as a lack of funding or time constraints, represent bigger obstacles that any internal issues, such as relations with staff or a lack of appropriate knowledge or expertise.
This is positive news and demonstrates that the entrepreneurial spirit is as healthy as it has ever been; in fact, millennials are starting more businesses before the age of 25 than their older counterparts did, but they are also more impatient to exit, with 63% wishing to do so within 5 years as compared to 46% of those aged 35 and over.
When it comes to the mind-set of the serial entrepreneur, the study is revealing; 91% of those questioned who have started 6-10 businesses say that they are confident in their business abilities, compared to just 67% of one time founders; only 13% are afraid of failure, compared to 40% of one time founders, and there are other clear differences.
60% of one-time founder’s prefer to focus on one thing at a time (just 20% of serial entrepreneurs agreed), and only 45% of one-time founders declared themselves to be financial risk takers (73% of serial entrepreneurs agreed they were). Intriguingly however, serial entrepreneurs (91%) overwhelmingly agreed it was important to plan for the unexpected (versus 61% one-time founders) and just over half confessed to being easily distracted by new opportunities (only 16% of one-time founders were).
So it would seem there is work to be done to persuade the one-time founder to be more open-minded and more of a risk taker, but as Luke Johnson points out, they may find relief in the knowledge that being a serial entrepreneur doesn’t have to mean starting business after business from scratch; it can also mean taking a position on a board, mentoring other founders, or investing as a business angel.
What motivates today’s founders? As you might expect, one-time only founders enjoyed the day-to-day, whereas serial entrepreneurs enjoyed the challenge of growing a business, and making a contribution to society. One time founders enjoy this aspect too, but get more caught up in the day to day, and particularly value their relations with other staff members.
73% of serial entrepreneurs said they had sold a business, and 64% had experienced closure (versus one-time founders 30% and 9.1%), whilst both sets of founders shared similar concerns, namely lack of financing and time constraints. Serial entrepreneurs were generally less concerned about a lack of experience, knowledge, or a lack of support from those around them. In other words, they back themselves in most situations.
So, do the stereotypes hold up? Perhaps. Every founder is different, and every industry also, so it can be hard to make sweeping judgments. Several things are clear however; Britain needs entrepreneurs, not just to set up and run innovative and wealth generating businesses, but to keep pushing, keep challenging themselves and not to be afraid of embracing new experiences.
The report concludes with 6 case studies of successful entrepreneurs looking at what, and what not to do when considering setting up a business. They are well worth any budding founder’s time.
As The Prodigy were fond of saying, so might it befit the serial entrepreneur; “I’ll take your brain to another dimension; pay close attention!”