October 9th, 2020 | How (Not) to Build a Business
I remember how once upon a time, I was impressed when someone was introducing themselves to me as a “serial entrepreneur.” Well, it’s not the case anymore — and let me tell you why.
Serial Entrepreneurs And Their Business Development Strategy.
Some people jump businesses like gloves. Online marketing business. Then, coaching business. Then, drop-shipping online business selling RTV equipment. Then, some other affiliate sales. Then, some content platforms with materials about health and how not to die too soon. Then, online webinars on how to become a better parent. Then, some recruitment tools. Then… Whatever is trendy at the moment.
This phenomenon is usually referred to as “serial entrepreneurship.” What it means is creating businesses one after another — and these businesses can be loosely related to each other. It looks impressive but in reality, it is just another example of how NOT to build a business.
I used to bump into those people at business meetups before the crisis. I used to look at their LinkedIn profiles and think to myself, “Man, this guy really tried everything, what perseverance! I wish I was that ambitious…” Or “This lady is superhuman! She built companies in ten different sectors. She must be so knowledgeable… What a great role model!”
However, after spending my time among entrepreneurs for the last few years, it became obvious to me why serial entrepreneurs get it all wrong. The difference between serial entrepreneurs and successful entrepreneurs has become even clearer in the corona crisis. Namely, businesses of many people in my circles fell apart recently. And all these people happened to be serial entrepreneurs.
What Is the Wrong Assumption Behind Serial Entrepreneurship?
So, why being a serial entrepreneur is not a good business development strategy? Well, it is for a few reasons.
The most straightforward answer to the question is that serial entrepreneurs believe that success is all about grabbing the opportunity: finding yourself at the right time and at the right place. No success in the previous project? Well, perhaps the topic was not trendy enough, or my product arrived at the market too late.
Or perhaps, my co-founders were the wrong guys for the job. The next time I’ll find someone better and everything is going to be just fine. So, let’s be this heroic, unflappable serial entrepreneur who always stands up again and starts anew… and let’s jump on some other topic straight away. If you throw shit against a wall ten times, something will stick, right? Let’s keep on trying. Well, this is not the best approach.
Three Main Reasons Why Serial Entrepreneurship Doesn’t Work As a Business Development Strategy.
The first reason is that the approach assumes that you don’t need to create any added value for your business; you just need to spot the opportunity, initiate the project, and motivate the people around you. And then, all the rest will be done by itself, or rather, by the hands of your teammates. I noticed that serial entrepreneurs often associate their value with those they know.
Yes, if you were active in business development for the last ten years, and you’ve been attending business meetups and conferences for all this time (and failed at ten different projects so far), you will casually know a ton of people.
But what’s the added value of that? I won’t count how many times I was invited to a business meeting, where the only thing that the person was talking about for the whole hour, was naming all the people they knew. Or rather, all the people they had ever spoken to. And most probably, they appended me to the list of contacts to brag about after our meeting…
The second reason why serial entrepreneurs never become truly successful is related to personal development. Or, a lack thereof. Namely, they not only lack the expertise that would bring a new IP to their company, but they also don’t learn while doing their projects.
Since every business they build has a different target group, the only know-how that they can transfer from one project to another, are very basic business skills such as the principles of online marketing or a growing network of causal business contacts. To come up with real innovation, or to even correctly diagnose the failure of the previous project, one needs to have some depth in knowledge about the subject matter in the first place.
All these observations bugged me for a long time. In business development, they always tell you that failure is a success in fact. Allegedly, investors think warmer about the budding entrepreneurs who can get over failure rather than those who succeeded with their first project. Is this true though?
If you don’t learn anything from your failures, but rather, jump on yet another business opportunity, what is the value of that to the investor? There is no value. There is a huge difference between pivoting, namely changing the business model for your business following the demand, and jumping the ship.
Lastly, such people don’t have any genuine passions or interests. They just want to capitalize on something. Whatever that something is. While in business, authenticity is a very important factor for success.
When potential stakeholders of your project talk to you — whenever it’s your potential business partners, clients, or employees — they need to have a strong feeling that you are authentic. Namely, that you have a personal mission, and that you are a real leader who is in the business for a little bit more than just money.
Serial entrepreneurs master the art of making mechanistic, generic sales pitches. Yet, they can never be as real and persuasive as people who have a mission. If you’d like to know how this works when brought to the extreme, place take a look at the Contrepreneur Bingo series on Mike Winnet’s YouTube channel.
What Is the Origin of This Phenomenon?
I feel that the Netherlands is full of business developers. Even IT meetups — where you would expect most attendees to be programmers and engineers — are full of them. They walk around and hustle, looking for investors or “team members,” namely people with the actual skills.
And, they try to get you onboard to implement their “million dollar idea” — in an exchange for a modest share of the cake. When you talk to these people, you will quickly learn that over 90% are these serial entrepreneurs. It’s enough to ask them a few quick questions to figure out that they lack any mission or expertise.
Where do all these people come from? I feel that the main reason is the illusion of abundance. The survivor bias in the media creates the impression that there are so many successful people — all these young millionaires online who seem to be just like us — that if you try for long enough, you will be successful sooner or later. No matter what.
And, everyone knows someone who got lucky in their life: invested in some speculative asset and won. Or, found themselves in the right time and place, met the right people, and eventually succeeded in business without even having much expertise. But this is like hoping that you will win in a lottery! It’s not worth spending your life like this…
Is Dropping Projects Always a Sign of Contrapreneurship?
Not always, of course. Building businesses require a certain degree of luck. Good projects often need to close their operations because of the external situation that they cannot influence. Well, the corona crisis is a good example of an extenuating circumstance. It’s not easy to figure out when is the right moment to pull the plug.
As Seth Godin has wonderfully explained in his famous book “The Dip,“ quitting smartly is also a factor for success. Every business goes through this hard phase of a dip after you already invested a lot of time and effort, but before you see the exponential growth. You need to learn whether or not you should quit in that phase.
Sometimes your market fit just isn’t good enough. With time, it becomes obvious that your business will not succeed no matter how good you are. I believe that in such a situation, you should think about how to create another business using your current expertise.
In this way, your business can best benefit from your prior experience. Otherwise, you will need to go back to the starting line, which means a year or a few years of working experience without any advantage for your business.
People who repeatedly jump into a completely different domain from one project to another, are either thoughtless opportunists, or they tend to put all the meaningful work on other people’s shoulders and that’s why they built no expertise to transfer between projects.
And sometimes, they change disciplines so often because they are difficult personalities. They make foes so frequently that they effectively have to start in a new tribe every single time. There is a massive difference between “pivoting” and “running.” In all these cases, I feel that these are the people to avoid in business.
What Is The Best Business Development Strategy.
I have these thoughts about serial entrepreneurs also because I recently had some online chats with good examples. Namely, people who are successfully developing their businesses after their PhD, Alican Noyan, and Lindy Ledohowski. I felt that in both these cases, the secret behind their success was that, they do exactly the opposite of what serial entrepreneurs do. Namely, they build upon the knowledge acquired over their lifetime.
Lindy is building her business, EssayJack, as a platform helping academics in building their academic publications. Lindy is an academic herself. She walked away from a tenure position as an English professor to start her own business. Thus, she was proficient both in drafting high-quality academic publications AND writing in English before she ever set a company in that direction. And since she kicked off with EssayJack, she never jumped the ship.
It was rather that, she pivoted and adjusted the business model and the marketing strategy to better adapt them to her clients’ needs. EssayJack has recently got acquired by Wize-r, yet another company serving the same purpose. The two companies merged and are now on the way to becoming the leader in the space of online writing education for academics.
Alican is building his business, IpSumio, based on applying machine learning paradigms to problems in healthcare, engineering, and science. He is a Master’s graduate in Material Science and a PhD who developed new methods for Hewlett-Packard in his PhD program. He also built additional expertise in machine learning on his own by taking online courses after his PhD.
Then, he integrated this new expertise with what he knew before and offered new services to his contacts from the academic world. And that’s how his business started. From what I know, Alican is now exploring new venues. He divides his time between short-term projects and more exploratory, long-term projects that might potentially lead to new startups.
So, How Not to Build a Business?
I have no doubt that Lindy and Alican are going to make it. Unlike serial entrepreneurs, they integrate all they learned over a lifetime into their businesses. They keep on learning, adjusting, and growing. And if I become a private investor in the future, I will invest in such people only. On the contrary, serial entrepreneurs will be an investment I will avoid like fire.
How Do I Build a Business?
In light of what was said before, it probably won’t come as a surprise that I chose to build my business, Ontology of Value, on solid fundaments. I started with personal development, by analyzing the problem I felt in my own skin, namely, the lack of career advice for PhDs at the end of their academic education process. I explored this problem, and wrote a book fully dedicated to the subject, “What Is Out There For Me? The Landscape of Post-PhD Career Tracks.” Then, I developed a professional workshop to help professionals and PhD graduates in crafting their new careers.
However, my journey didn’t end there. This is where it only started. After researching today’s job market in-depth for the last few years, I developed a new aptitude test:
which helps professionals in positioning themselves in the job market.
The test is based on Alfred Adler’s theory of human motivation and indicates what your natural profile as a value builder is, and where in the job market you can find your tribe: a group of people who think like you and who will appreciate you as a professional. I was developing this test for over two years, using a combination of field research, psychometrics, and machine learning (which I learned during 15 years of my higher education process, all the way from triple MS studies in Physics, Mathematics, and Psychology, to 8 years spent in Computational Neuroscience).
Please find all the information at the test website:
And, my future and the future of the company are all about building value for professionals and helping them self-navigate in the job market. The job market becomes more and more liquid and it requires great self-management skills to develop your career in an optimal way. I find great satisfaction in discovering and creating new tools to help professionals progress in their careers – and every new project is built upon the know-how and expertise gained in my previous projects. There is no piece out of place in the business development strategy of my company! I also recently shared my insights into the factors that help me develop my company as a PhD and the factors that make it harder in this video.
Would you like to read more about my view on the tribe of entrepreneurs? I wrote some more about it in the blog post “What I Learned Past Few Months… About Entrepreneurship and Entrepreneurs.” By the way, biz dev is also something I do after working hours as a hobby. I highly enjoy discussing business development strategies and brainstorming with my friends’ ideas. It’s also because I encountered many con artists in recent years. It taught me to recognize a lack of expertise and vile play early on. So, if you’d like to discuss your business ideas with me, please drop me a message!
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If you would like to read more about careers (for PhDs and other white-collar professionals) and effective strategies to self-navigate in the job market, please also take a look at the blog of my company, Ontology of ValueⓇ where I write posts dedicated to these topics.
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