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Is “Serial Entreprenuer” Just Code for Serial Failure?

By: Ned Stringham

Have you noticed that just about everyone you speak with these days is a ‘serial entrepreneur?’ It’s the vogue thing to be. Like consultants in the late 80’s and venture capitalists in the late 90’s, everyone is trying to spin their story, but as before, the substance is often lacking.

The odds of building a successful company these days is about equal to being struck by lightning. Even looking at the track records of venture capitalists over the last decade shows how hard it is even for the most experienced people around to pick the winners. Data from Venture One shows that less than 5% of all venture capital firm investments paid back more than 1.5x their original investments over the last ten years, and these odds have only been getting worse. If that is the record of the pros, imagine the odds of success for all startups. There is a lot of capital being destroyed by the craze for serial entrepreneurship. In fact, failing is now supposed to be a positive thing. Somehow losing people’s money once isn’t enough. Yes, this is a bit harsh, but I am trying to make a clear point: you need to be irrationally optimistic to give entrepreneurship a try.
So what is causing this wave of irrational optimism? It seems to me to be 3 three things:

1.Rock star like status and obscene amounts of wealth garnered by those few who have succeeded. There are not a lot of feature stories about the failures. The media would have you believe that success is easier than it is.

2.We all want to be our own boss. We value that independence and apparent freedom.

3.There is no room for the middle manager in business today. Technology has largely replaced that need. This leaves many people unemployed without real options. Entrepreneurship is seen by many as one of the few paths available to take.

The message here is not to reject entrepreneurship; instead, make sure you understand what you are trying to do. Don’t accept the common thinking. Challenge the basic assumptions and make sure you are ready for the ride–wherever it might take you.

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