Some research downplays the success of serial entrepreneurs, finding that they often fail in their subsequent ventures despite their previous start-up experience, which allegedly might have provided the learning to guide future entrepreneurial success.
After researching business success and failure patterns for 25+ years, I am not surprised by these disappointing findings about serial entrepreneurs. According to the patterns that emerged from my research, businesses succeed by building upon strengths. And, building on strengths has important implications regarding the success of serial entrepreneurs. If the required strengths are missing, a new venture can suffer. That’s why merely repeating the process of doing additional start-ups without building on the strengths required for that particular new venture generally does not lead to success.
Why, then, has there been previous research indicating that entrepreneurs are less likely to succeed on their first try? Does that earlier research conflict with the evidence that serial entrepreneurs are not necessarily successful in their subsequent start up attempts? As I see it, no, it does not–because there is an explanation. And, the explanation centers around strengths.
A number of first time entrepreneurs may have virtually no idea at all what to expect when starting their businesses. With such serious lack of preparedness, these first timers can easily make devastating mistakes that might be avoided by entrepreneurs who have done it before and have a better grasp of what to expect. So, strengths gained from experiencing the prior start up can help somewhat.
But, previous start-up experience is not always enough. As I said earlier, merely repeating the process of starting a business generally does not lead to success unless the new start-up is built on strengths specifically required for that business. And, this is where serial entrepreneurs can fall short. They often do not have the strengths required for the particular business they will be starting next, nor can they readily acquire those strengths. As a result, those missing strengths can stifle their success, despite their previous experience as entrepreneurs.
The reverse is also true: some first time entrepreneurs can be very successful despite their lack of previous start-up experience. The success of these first timers is often fueled by their bringing prior strengths so deeply related to the new venture that their lack of previous start-up experience is not a serious impediment.
Thus, the research indicating that entrepreneurs who tried before are more successful is essentially telling us that having previous business start-up experience does offer a bit of an advantage. However, even with that advantage, serial entrepreneurs still need the strengths specifically required for their next venture. Yet, serial entrepreneurs don’t always have the required strengths, and may not be able to readily assemble them in an effective manner. So, research finds that serial entrepreneurs aren’t necessarily successful in their subsequent ventures.
Yet, none of this implies that serial entrepreneurs cannot succeed. Some serial entrepreneurs will build on prior strengths effectively, and those serial entrepreneurs can be quite successful. And, some serial entrepreneurs may be more successful because they are better able to harness what it takes to transfer prior experience to their new ventures. Furthermore, in some cases, even struggling serial entrepreneurs may experience some success via damage control, where they ultimately find a buyer for their poorly performing venture, sometimes at a fairly good price.
Additionally, some serial entrepreneurs may move on to their next venture merely due to their own personal preferences so they can experience success on their own terms. The business they previously started may no longer interest them, and they may view it as a success to shift toward something more appealing, even if the shift appears less lucrative financially. As a result of this kind of shift to something more appealing, the entrepreneur may become more passionate about the new venture. In some cases, this passion can ultimately become a strength that leads to greater success later on.
In conclusion, merely being a serial entrepreneur is not necessarily associated with success in future entrepreneurial attempts. An important key to success with those subsequent entrepreneurial efforts is putting together those new ventures in a way that builds on prior strengths.