How (Not) to Build a Business.
Updated on February 7th, 2023
October 9th 2020
This text was fully written by humans.
SUMMARY / KEY TAKEAWAYS
Many seemingly impressive entrepreneurial careers are much darker when you look closely.
Because of the illusions of abundance, many people go for business career without proper background and extra value to give.
You should be careful when it comes to working with “serial entrepreneurs” who seem to be jacks of all trades. In this article, we explain why this is so.
Table of Contents
- Serial Entrepreneurs And Their Business Development Strategy.
- What Is the Wrong Assumption Behind Serial Entrepreneurship?
- Three Main Reasons Why Serial Entrepreneurship Doesn't Work As a Business Development Strategy.
- What Is the Origin of This Phenomenon?
- Why Is It So Hard To Tell The Difference Between an Amateur and a Real Expert?
- Is Dropping Projects Always a Sign of Contrapreneurship?
- What Is The Best Business Development Strategy?
- So, How Not to Build a Business?
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.
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.
Whatever is trendy at the moment, business development managers are very active.
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.
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: 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 to business development strategy. 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 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. Serial entrepreneurs do not provide any intrinsic value to the projects but rather, they tend to 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? Have you ever experience the situation when you were invited to a business meeting and met someone who spent the whole hour on naming all the people they knew? Or rather, all the people they had ever spoken to.
Lastly, serial entrepreneurs tend to be conformists. They just follow the trends without taking risks. 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, 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.
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 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.
Why Is It So Hard To Tell The Difference Between an Amateur and a Real Expert?
Telling the difference between the two is hard because 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.
What Is the Origin of This Phenomenon?
Even IT meetups — where you would expect most attendees to be programmers and engineers — are full of business developers. 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. And, 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 if they lack any mission or expertise needed for a successful business development strategy.
Where do all these people come from? 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 in the business development plan. 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. 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, these are the people to avoid in business.
What Is The Best Business Development Strategy?
Examples of people who are successfully developing their businesses after their PhD, Alican Noyan, and Lindy Ledohowski. In both these cases, the secret behind their success is 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 to 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. 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?
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. They work on their personal development as well as professional development all the time.
Please review also our another article on how to develop a consultancy business “How To Launch a Side-Kick Consultancy Business — Right Here, Right Now?“
We recommend also to read before you make your choice the following article: “Business Development Responsibilities: Looking for a Co-founder? Read This Before You Make Your Choice“.
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Please cite as:
Bielczyk, N. (2020, October 9th). How (Not) to Build a Business.? Retrieved from https://ontologyofvalue.com/how-not-to-build-a-business/
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