What does it take to build multiple successful companies?
This article originally appeared at Indiez.io
Building a company takes a lot more than just some diverse skills and a network.
While startups are born and die every single day, very few of them survive the long haul, and even fewer reach the highest level of success. It’s easy to see why it’s an elimination game.
Too many give up after their first failure/setback. However, there are serial entrepreneurs who have built not one but multiple successful companies, one right after the other.
At Indiez, I have spoken to over 100 serial entrepreneurs. These entrepreneurs have a knack for hacking all aspects of building a successful company — team, product, growth, and so on.
Most importantly, they are unafraid and take smart risks! They don’t give up even when they meet a series of failures.
Looking at some of the biggest examples, there is a lot to learn from the journey of some serial entrepreneurs like Max Levchin, Jack Dorsy, Ev Williams and the like.
In this blog, I’ve compiled some of the greatest lessons from their stories, which I found extremely inspiring and relevant.
1. Experiment, generate data and learn
Max Levhin, Former CTO of Paypal and now founder of Affirm, strongly believes that ‘data’ has the power to blow up the old ways, and to build anew.
Be it reinventing how to prevent fraud at PayPal as a 25-year-old CTO, or now creating a new kind of consumer finance for the millennial generation at Affirm, he relies on ‘data’ as the raw material for each successive cycle of making and destroying.
How?
At PayPal, to build an anti-fraud software, they generated a lot of data by first losing a lot of money from fraud. He calls it ‘paying tuition’. Every week, PayPal lost millions of dollars to fraud, while Max and his team worked to integrate that data into their fraud detection models.
Similarly, at Affirm, they’re spending half a million dollars a year on very risky loans that may have negative returns. Those loans will provide the rich data for Affirm’s underwriting algorithms.
Serial entrepreneurs strongly rely on the power of experimentation to generate data that they can draw strong insights from.
2. Don’t wait too long just dreaming
Jack Dorsey, founder of Twitter and Square, believes that the real learning happens when you get to that space where you actually have something to play with. That’s one of the biggest and most common learnings that all serial entrepreneurs talk about.
The faster you can get to making it, to building the idea and writing that code, the faster you will be able to answer your questions and attract people to your idea. Jack also suggested to not talk with anyone — VCs, investors, customers, other people you are trying to hire — until you’ve got something to show.
3. Differentiate by creating friction
Ev Williams, founder of Twitter and Medium, has learned from his experience that some amount of friction is a great way to differentiate your product from the rest.
Getting started with Twitter, for instance, was tougher than just making an account. “If it’s hard to figure out, and you figure it out, you’re cool,” Ev says. He used that same strategy for Medium by making it an invite-only platform in the beginning.
This is specially useful if you are competing in really crowded markets. That’s the reason a lot of community platforms start as invite-only. Another great advantage of this strategy is that it allows you to slowly test and improve your product with a limited number of users.
4. Be an excellent leader
Mark Pincus, founder of Zynga, shared a cool thing in an interview. He said he likes to convert all his employees into CEOs.
He puts white sticky sheets on the wall, and then puts everyone’s name on one of the sheets, and says, “By the end of the week, everybody needs to write what you’re C.E.O. of, and it needs to be something really meaningful.”
Over time people start taking more and more ownership of their work. This brings about huge positive changes. Like his receptionist went on to take more and more responsibilities to ultimately start managing all office operations!
A great leadership lesson to learn there was — If you give people really big jobs to the point that they’re scared, they have way more fun and they improve their game much faster.
Serial entrepreneurs are great leaders who believe in empowering others.
5. The best skill is life long learning
Mark Cuban, self-made billionaire and the star of ABC’s hit show “Shark Tank,” spends his spare time reading up on computer programming and artificial intelligence. He truly believes that the greatest skill is having this knack of life long learning.
In an ever changing world, you can not win if you stop learning.
For instance, irrespective of what you are studying right now, if you are not getting up to speed on deep learning, neural networks, etc., you lose!
As we see more technological advances over the next 10 years than we have over the last 30, it’s just going to blow everything away. You’ll need to be at the edge of everything to stay at the top.
6. Bring in the revenue ASAP
You might enjoy positive customer reviews, press mentions, and industry awards for a while. You might even become happy if a hotshot angel investor or VC firm takes a chance on you. But without a viable path to profitability, your business won’t be sustainable!
Tanisha Robinson, CEO of Print Syndicate, scored $4.25 million in venture capital last year to fund her company’s expansion, but she wasn’t relying on such financial infusions to feed herself and her staff of 140. “If the capital market dies and nobody can raise any money, we’ll still be here,” she says. Her company that designs novelty clothing, accessories, and home goods did $4 million in sales in 2013, its first year!
It all comes down to this — It’s not enough to identify a market opportunity. You also have to gauge customer enthusiasm for the product or service you want to sell and then SELL it to them.
7. Always have the hustle mentality
Companies with smaller budgets are forced to think creatively and work to fix problems rather than throw money at them.
Shaun and Gary Tuch, founders of Professor Egghead, initially spent more than $75,000 on print and online advertising to expand their interactive science and engineering classes for kids to multiple locations. But, they didn’t get expected returns.
Interestingly, when they cut their marketing budget by 75 percent, it forced them to focus on more affordable ways to reach parents, educators and potential partners through Twitter, Facebook, YouTube and science, technology, engineering and math conferences and associations. And within six months, they generated enough interest to open two additional locations.
Sometimes, the solution is so simple we don’t find it because we’re too focused on looking for something fancy.
Successful serial entrepreneurs have hustle mentality and make things work anyhow, even with limited budgets.
8. Have the right attitude toward failure
Eric Lefkofsky, CEO of Groupon, has a series of failures including Brandon Apparel Group and Starbelly, which led him to the brink of bankruptcy in 2001.
But with persistence, a series of failures can turn into a series of successes. Later, he started InnerWorkings, a print procurement company that was a success. Lefkofsky insists there was no magic to what worked and what didn’t. He kept working and trying new things until eventually he developed InnerWorkings and things clicked.
That’s the attitude serial entrepreneurs have toward failure. They treat failure as a necessary part of their journey. For them, it’s not win or lose. It’s always win or learn.
9. Be obsessed with the problems that you are solving
While it might seem like serial entrepreneurs are obsessed with building companies, what they are really obsessed with is solving problems.
Mark Zuckerberg believes that the best companies get built when founders drive some kind of social change, even if it’s just local in one place — not when they start out because they want to make a bunch of money or have a lot of people working for you or build some company in some way.
Mark Cuban says entrepreneurs should be obsessed with their companies from the start — not looking to sell and move on.
Successful serial entrepreneurs don’t start a company unless it’s an obsession and something you absolutely love.
We hope this was a nice little dose of inspiration for you. Now go out there. Take that plunge, take that leap of faith.
If you want a problem solved, there’s no reason why you won’t find a solution.
Your passion and belief to build your idea are central to everything you’re doing. Learn from the data, and move on.