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The myth of the serial entrepreneur

Before Hacker News, and the wealth of Paul Graham essays that came with it, there was, for me, ignorance.

Of course, I'd heard about the "dotcom boom", and, being a geek, I stayed relatively on the bleeding edge of tools and web-based startups. Hell, I even knew about Ruby on Rails and Basecamp. But the landscape of "learning about startups" was largely made up of the typical books you find in your average library, about "how to deal with your company finances", "10 steps to marketing success" and other dispiriting works, along with more inspiring but largely useless biographies of successful businessmen.

So, when I stumbled upon this treasure trove of startup lore, it shaped my view of entrepreneurship for years to come. Thank you, Paul, for putting so much valuable insight online.

That said, today I want to, ungratefully, attack one theme that was common in those early essays, back in 2007 and earlier. Before I do this, it's fair to point out that Paul's view of this may well have changed since this was written (5 or more years ago!). There are many things I believed 5 years ago that I wouldn't stand behind today.

Some quote-fodder

In the seminal Why to not not start a startup, written in 2007, Paul said, about serial entrepreneurs:

This is my excuse for not starting a startup. Startups are stressful. Why do it if you don't need the money? For every "serial entrepreneur," there are probably twenty sane ones who think "Start another company? Are you crazy?"

I've come close to starting new startups a couple times, but I always pull back because I don't want four years of my life to be consumed by random schleps. I know this business well enough to know you can't do it half-heartedly. What makes a good startup founder so dangerous is his willingness to endure infinite schleps.

There is a bit of a problem with retirement, though. Like a lot of people, I like to work. And one of the many weird little problems you discover when you get rich is that a lot of the interesting people you'd like to work with are not rich. They need to work at something that pays the bills. Which means if you want to have them as colleagues, you have to work at something that pays the bills too, even though you don't need to. I think this is what drives a lot of serial entrepreneurs, actually.

In How to make wealth, written even earlier, in 2004, Paul said:

Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast.

In the excellent How to start a startup, in 2005:

My final test may be the most restrictive. Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for four. And maybe end up with nothing-- though in that case it probably won't take four years.


If you're the sort of person who would like to solve the money problem once and for all instead of working for a salary for 40 years, then a startup makes sense.

These may seem like innocuous points, lost among a sea of advice that is still invaluable and top of the class to this day, but for me at least (and probably for others), they shaped a perception of the serial entrepreneur as the exception. "Normal entrepreneurs," whatever those may be, just do one startup (or a few, until they're successful), get rich, and retire early, moving on to other things.

The strange thing is, of all the entrepreneurs I know, and of all those I've heard of, I don't know a single one that would fit this "normal" pattern.

Entrepreneurship is addictive

It doesn't matter whether your previous businesses were successes or failures. It seems that once you've got the bug of entrepreneurship, once you've tasted the freedom and excitement of running your own business, you simply never go back to working for others again - or, if you do, it's only temporary, a stop-gap measure, to tide you over until you figure out how to get started on your next idea.

Is it because entrepreneurs are unemployable? I don't think so, though I have no evidence either way. My view, looking at those entrepreneurs that I know very well because they are friends, is simply that starting businesses is a lot of fun, very rewarding, enables you to work with great people, and basically is much better than all the alternatives.

Also, as Derek Sivers puts it:

Then I realized why I need to start a new company. Not for the money. Not because I'm "bored". But because a company is a laboratory to try your ideas. (The word "laboratory" is defined as a room for research, experimentation or analysis. I think of it as a sandbox or playpen.)

If your startup is unsuccessful, you may have to go and get a job for a while to pay the bills, but based on what I've seen, it's almost certain you'll be starting something again soon. If your startup is successful, and does make you wealthy, it's even more likely that you'll be starting something again.

Any non-serial entrepreneurs in the house?

Can you name any non-serial entrepreneurs? I can't think of any of the top of my head... all entrepreneurs seem to be serial offenders. Max Levchin, Evan Williams, Justin Khan, Steve Jobs, Jack Dorsey, Mark Pincus, Peter Thiel, Elon Musk, Kevin Rose, Sean Fanning, Sean Parker, Marc Andreessen, Mark Cuban, Jason Calacanis, Ryan Carson, etc...

Lesser known examples are also serial. All the entrepreneurs I know personally have started several businesses, or are still on their first business (i.e. they're unknown data points).

Aha, you might say, what about Bill Gates, Mark Zuckerberg, Helwett and Packard, Disney, Larry Ellison, and a bunch of other similar single-company entrepreneurs?

Well, first of all, you can hardly claim that they compressed 40 years of working life into 4. You might say they compressed 400 years into 40. And I think it's fair to say that if they could compress 1000 years of work into 100, they'd do just that.

Secondly, of course, if you build a $100b company, you're not going to quit it willingly to go start another. However, if we want to know what would happen to Larry Ellison if he was kicked out of Oracle before his time, we only need look at his friend Steve Jobs. When Jobs was kicked out of Apple, he started Next and took over Pixar. Serial entrepreneur? No doubt.

Ironically, even Paul Graham himself is a serial entrepreneur! After all, what is YCombinator if not a business! If anything, one might claim that Paul is more of a serial entrepreneur than all the others combined. He's actually started a business that allows him to get involved in a hundred new businesses every year. He's not founding all of those directly, but he sure as hell is a founder of YC - which is most likely "consuming his life" in a similar way to what a startup would do.

The same can be said of apparent exceptions like Morten Lund, who then went on to start a VC fund. VCs are businesses too, and it can be argued that they are meta-businesses. You don't become a VC because you want to do less entrepreneurship, but because you want to do more.

A change of perception

I'm sure some people will suggest some counter-examples on HN, and I have no doubt some of those will be valid exceptions, people who really did decide that they were happy doing other stuff, like having a job, becoming a painter, or sitting on a tropical island for the rest of their life, after running a successful startup. But then my point still stands: those are the exceptions.

What does this mean in practice? It means that entrepreneurship is a long-term game. I means you should never sacrifice your future startups for your current one(s). It means you should not take unreasonable personal risks for your current startup. It means you should not think of your current startup as an insane, one-shot attempt, like jumping out of a plane. It means you should not burn relationships, piss off people, take damaging shortcuts - because you're in this small world of entrepreneurship for a long time to come. It means you should always act as if your behaviour as a founder will be with you for the rest of your career - because it will.

More from the library:
Read advice in between the lines
How to keep your sanity during launches
Friends and Family financing