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October 2, 2024
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Business on repeat: why serial entrepreneurs are changing the rules of the game
From the study GradusIn 2023, it became known that since the beginning of the full-scale war in Ukraine, only 2% of traditional businesses and as much as 18% of startups have opened. The significant difference in the figure shows that Ukrainians do not give up, and startups can be the key to economic stability.
The launch of young enterprises is often the result of the work of those who continuously create new and new companies. Today we will talk about serial entrepreneurs — how they launch new projects, manage several companies and build strategies for the success of their businesses.
Who are serial entrepreneurs?
A serial entrepreneur in the Cambridge Dictionary is defined as a person who starts several businesses in a given period. However, in practice, it can be someone who constantly moves from one startup to another, creates businesses, and then either sells them or transfers them to team management.
Instead of dedicating themselves to one business all their lives, serial entrepreneurs try to realize themselves in different areas, often even in different markets or regions. They are united by several key qualities: a constant desire to find new opportunities, willingness to take risks, adaptability and flexibility in decision-making. Serial business attracts people with a visionary type of thinking, who find it easy to come up with ideas and feel the needs of the market. The adventurism inherent in the launch of a company drives a serial entrepreneur, who often has deep expertise in product development, team search, and marketing activities.
One of the most famous examples of serial entrepreneur in the world is Virgin Group founder Richard Branson. He started a business in the 1970s selling defective records under the Virgin brand, which later grew into the full-fledged Virgin Records recording empire. But his ambitions did not stop there. Branson has always been on the lookout for new opportunities: he launched the airline Virgin Atlantic, then Virgin Mobile, Virgin Galactic, and even tried himself in the rail business through Virgin Trains. Contrary to risks and failures, for example with Virgin Cola, his ability to constantly find new niches makes him the perfect example of a serial entrepreneur who is not afraid of challenges and is always ready for the next big idea.
Why do some entrepreneurs choose the path of starting several companies? In fact, it is not a very common practice, because according to a study Kaufman, more than 40% of entrepreneurs spend years working or managing their first business, and less than 1% have founded up to 10 companies in their lifetime. Serial entrepreneurship attracts those who seek diversity, new challenges and opportunities for growth. It allows you to create several businesses, develop different skills and form a powerful network of contacts. The advantage here is diversification: founders can operate in different industries, reducing risks and increasing investor interest. However, this path is not without challenges. Balancing between multiple projects can be tedious, and finding new ideas can lead to a loss of focus. In addition, there is a risk of overspending resources when an entrepreneur invests excessive funds in a dubious project, hoping for its success.
Key strategies of serial business
Serial entrepreneurs use strategies similar to conventional ones, but taking into account the specifics of several projects. This creates new opportunities and challenges:
1. Creating an Ecosystem
A serial business can be transformed from multiple sources of income into a true self-sustaining ecosystem. Not every project can be financially successful, but they can maintain the profitability of the flagship project. For example, the owner of a marketing agency and an IT startup can get a symbiosis from the cooperation of both companies, where the expertise of the two teams will reinforce the value proposition of each project.
2. Diversification
In serial entrepreneurship, it is good to borrow the rules of effective investment. One of the most famous — “Don't put all your eggs in one basket” — also applies here. Given the state of the market, risks and available capital, decisions can be made to reinvest, as well as withdraw profits to invest in a new project or scale up. Risks can be reduced by developing different directions, which makes it possible to test new niches and projects.
3. Liquidity and risks
Even the most risky and daring entrepreneurs must have exit strategies. Remember the Indian saying: “When you realize you are riding a dead horse, the best strategy is to get off it.” It is necessary to define the criteria for assessing success and “exit the game on time”, preserving liquid resources. Doing business does not always lead to scaling, and therefore it is worth considering options for sale or transfer of management.
Even the most successful entrepreneurs face setbacks. Alexander Kosovan, founder of MacPaw, shared one of the following examples: developing a product to personalize the iPhone without prior market research. After spending two years creating it, the team realized that there was no demand for this product, and the project had to be closed. Careful analysis before launch and willingness to admit mistakes, even if significant resources have already been invested - this is an important case for serial entrepreneurs, for whom one defeat should not become an obstacle to the implementation of their ideas. Remember that most well-known entrepreneurs have cases of failed startups, thanks to which they were able to identify more profitable and profitable niches for doing business.
Managing multiple companies
To manage several companies at the same time, it is necessary to possess both certain personal qualities and master unique management skills.
1. Multitasking and delegation.
Delegating does not mean simply giving a task, for example, to a developer in a technology startup. It is impossible to simply rely on engineers, because the visionary also needs to understand the coding base, UI/UX design, and the basics of data analysis in order to effectively make informed decisions and understand the essence of work roles in your enterprise. It's not enough just to hire talent — you need to speak their language.
2. Structuring time.
Time is not just money, but an asset. Effective management of multiple projects requires extra effort in time management. Use productivity tools, work with clear deadlines, plan many months ahead, evaluating your own engagement opportunities for each of the projects. It is necessary to achieve the synergy of short-term tasks with the long-term goals of companies, in which automated productivity improvement systems, such as dashboards, will help.
3. Building a strong team.
Of course, in any business, an important role belongs to the management team. However, it is in serial entrepreneurship that it is important that everything works without the constant presence of the founder. A common mistake is to work with the same people from project to project. A fresh look and expertise in certain niches play an important role in building a new team.
4th. Financial literacy.
A general strategy for launching a product can be built on cash flow management. After all, in a serial enterprise, you can both attract share capital and take loans. And you can independently finance a new project, reinvesting the profits from the current enterprise. It is important to use fintech solutions to optimize cash flows. For example, in commerce, software to track inventory levels in real time and free up cash will help. It is equally important to be able to predict the movement of cash. For example, for an IT startup, you can predict the outflow of funds for advertising and plan cost optimization or set an additional budget for this period.
Practical tips for future entrepreneurs
For those who want to try to become a serial entrepreneur, here are some fresh statistics. According to the study Opendatabot30.7% of Ukrainian companies created by mass founders open in the wholesale trade. Another 6% — in the field of land and pipeline transport and 5.5% in the field of security services. The geography of enterprises is as follows: almost half of the companies (44.1%) are registered in Kyiv — 1766 businesses or 44.1% of the total number. For conducting serial entrepreneurship, Lviv region (8.4%), Kyiv region (7.6%), Odessa region (5.8%) and Dnipropetrovsk region (4.3%) are also chosen.
Of course, it is not necessary to register a business in the metropolitan region for the business to go successfully. However, when starting, you need to accumulate not only all your knowledge and finances, but also build a strong network of contacts. Invest time in networking, which will allow you to search for both team members and potential investors. In LinkedIn times, it is worth taking advantage of every opportunity and confidently declaring to the whole world that you are working on your business. An interesting, relevant and verified idea of your business will definitely attract the attention of partners and future customers.
Author: Iryna Zhdanjuk
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