Serial Entrepreneurs And Their Business Development Strategy.

Some people jump businesses with gloves.

Online marketing business.

Then, coaching business.

Then, a drop-shipping online business selling RTV equipment.

Next, 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.

And then, some recruitment tools.

Then…

Whatever is trendy at the moment, business development managers are very active, which is the opposite of actually learning how to identify new business opportunities that fit.

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 — not a real business development strategy for entrepreneurs at all.

These people usually get lots of attention at meetups. You meet them and you think to yourself, “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.

It means 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. 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. Decades of research back up just how risky that logic is: in an experimental study published in the American Economic Review, Camerer and Lovallo found that overconfidence reliably drives people to enter competitive markets at rates that outstrip what the actual odds would justify — exactly the dynamic behind repeatedly betting on “the next idea” (Camerer & Lovallo, 1999).

According to the U.S. Bureau of Labor Statistics, only about half of new business establishments are still operating five years after opening, a statistic that argues for real business intelligence for market analysis over enthusiasm, so treating each venture as a cheap lottery ticket carries a far higher cost than the “keep trying” narrative implies (BLS, Business Employment Dynamics).

Well, this is not the best approach to business development strategy, and it is nothing close to a real business development strategy for entrepreneurs who want to last. Your professional development will also be at stake.

Three Main Reasons Why Serial Entrepreneurship Doesn’t Work As a Business Development Strategy.

1. No Added Value.

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 learn something new, 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. Since they are neither architects nor builders, serial entrepreneurs do not provide any intrinsic value to the projects but rather, they tend to associate their value with those whom they personally know.

Yes, if you were active in business development for the past few years, you will know a ton of people.

After all, you’ve been attending business meetups and conferences for all this time.

And you failed at ten different projects along the way. But what’s the added value of that? 

Have you ever experienced the situation when you were invited to a business meeting? And did you ever meet someone who spent the whole hour naming all the people they knew? Or rather, all the people they had ever spoken to.

Yes, serial entrepreneurs have the mindset of lifelong learners… but to succeed for real, one should develop a mindset for lifelong doing instead.

According to Gompers, Kovner, Lerner, and Scharfstein in the Journal of Financial Economics, entrepreneurial success is strongly persistent: founders who have already succeeded once are far more likely to succeed again than first-time founders, which is exactly the kind of pattern business intelligence for market analysis is built to surface or those who have previously failed, which suggests that outcomes track accumulated skill rather than repeated attempts (NBER Working Paper No. 12592).

Lastly, serial entrepreneurs tend to be conformists. They just follow the trends without taking risks, which is the opposite of how to build a competitive business strategy. There is a ton of public interest in web3, Metaverse, NFTs, AI — you name it — and so they re-pitch their business proposition and follow.

As Michael Seibel and Dalton Caldwell from Y Combinator pointed out, conformism is a major problem in today’s tech in general. Despite an enormous interest in entrepreneurship and in the startup world, while at the same time few people can think independently and can solve real problems.

2. Lack of Personal Development.

The second reason why serial entrepreneurs never become truly successful is related to personal development as well as professional 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 from working on 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, one needs depth in knowledge about the subject matter.

The same goes for correctly diagnosing the failure of a previous project.

All these observations bugged me for a long time. In business development, they always tell you that failure is a success in fact, but that only holds if how to build a strategic business plan was ever part of the picture. 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? Knowing how to identify new business opportunities is not the same as chasing every one of them. 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 — the first is how to build a strategic business plan, the second is just restlessness.

3. Lack of Genuine Passion.

Lastly, serial entrepreneurs don’t hone any genuine passions or interests. Or rather, their only passion is a hustle: they just want to capitalize on something. Whatever that something is. While in business, authenticity, itself an underrated piece of business growth strategy for entrepreneurs, is a very important factor for success.

When potential stakeholders of your project talk to you, they need to have a strong feeling that you are authentic. This holds true whether they are your potential business partners, clients, or employees. 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 — the foundation of any real business growth strategy for entrepreneurs. This lines up with the research: a study in the Journal of Business Venturing found that perceived entrepreneurial passion shapes angel investors’ funding evaluations, though the effect is strongest among investors who are more intuitive or mentorship-minded — a reminder that authenticity reads differently to different audiences, but it does read (Journal of Business Venturing).

Serial entrepreneurs master the art of making mechanistic, generic sales pitches, instead of doing the harder work of how to build a competitive business strategy. Yet, they can never be as real and persuasive as people who have a mission. Want to see how this works when brought to the extreme? Take a look at the Contrepreneur Bingo series on Mike Winnet’s YouTube channel.

Why Is It So Hard To Tell The Difference Between an Amateur and a Real Expert?

Telling the difference between the two is hard as both beginners and experts speak similar business language and look at the problems in general terms. But the underlying reason is different. 

While beginners do not know the nitty-gritty details of the business, experts have so much experience and know so many mechanisms behind business that they take a helicopter view at problems and summarize the conclusions in simple terms.