Dangers Of Being A Parallel Entrepreneur

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Dangers Of Being A Parallel Entrepreneur

 


First off, I’d like to say that I’m not particularly fond of the term “serial entrepreneur”.  The only other context that I’ve seen the term “serial” used to describe something in mainstream language is “serial killer”.  Interestingly, even “Repeat Entrepreneur” doesn’t quite work because it reminds me of “repeat offender”.  Oh well.

Semantics and phrase associations aside, I’d like to take a look at the idea of being a “parallel entrepreneur” which I would define as having more than one entrepreneurial effort going on at any one time.  In my experience (and I’m guessing there are others like me), life doesn’t always work out so cleanly.  Though it would be ideal to wrap one thing up, put a nice little bow on it, and then start the other – it doesn’t seem to work out that way in real life.  As I’m in the process of winding down one thing, new opportunities come to mind.  Sometimes, I’ll end up in “parallel” mode whereby I wind up with multiple initiatives going on simultaneously. 

Thoughts On Being A Parallel Entrepreneur
 
  1. Don’t Ride Two Horses:  There are any number of metaphors (or is it analogies?) that explain why you shouldn’t try to do multiple things at once.  Though I’m not one for clichés, I must say that this one is true.  It is hard and often highly ineffective to try and do multiple “big” things at once.  Heck, it’s even hard doing one big thing at once and getting it right.  So, my first piece of advice, is to do your best to not get into parallel mode with two major initiatives.  It’s asking for trouble.  I’ve done it, and it’s not fun.

  1. Having A Day Job:  The above is not as dangerous if what you’re doing is keeping your day job (and a steady paycheck) while you explore a new entrepreneurial opportunity.  This is not being a parallel entrepreneur (because you’re not juggling multiple entrepreneurial initiatives).  Of course, you need to take appropriate measures to ensure that your “outside work” activity does not conflict (legally or otherwise) with your new startup.  Tread carefully here.

  1. Starting One, While Stopping Another:  This is one of the most common causes for parallel entrepreneurism.  You’re in the process of winding down one initiative (sale of the company, shutting down a failed business, new management, etc.) and starting up another.  I’m not sure if this is the same for everyone, but in my experience, winding something down takes much longer than you thought it would, and starting something new up consumes much more energy than you thought it would.  As such, where possible, it’s best to try and finish up the first before starting the second.  


For example:  I was in the midst of negotiating the sale of my first company (Pyramid Digital Solutions) to a large multi-billion dollar technology company.  By this point, I had really strong management in place so my day-to-day involvement in the company was minimal anyways (as an aside, I’d also joined a graduate program at MIT, but that’s a story for another day).  Based on my expected “closing date”, I kicked off things with a new startup.  As it turned out, getting the M&A deal done took much longer (12+ months) than I had ever expected.  Thankfully, I didn’t take any big steps, like building the early team, with the new startup during that time (though I was tempted to).  If I had to do it over again, I’d wait to finish one thing up before kicking off the next.  Entrepreneurs tend to over-value the “window of opportunity”.  There’s usually more time to get the new thing kicked off than they realize.
  1. Are You Hedging Or Leveraging?  One big question is, do you have two things going on at once because one is a “hedge” against the other, or is each initiative bringing value to the other?  Only you can really figure out the true answer to this.  (Though, it’s often tempting to rationalize something as being “leveraging”, when deep down inside, you know it’s a hedge).  If you are hedging, you may find that there is more risk in trying to do two things at once – and hence doing neither particularly well.  It’s hard to be equally passionate about two things at once and commit the necessary energy to both.  If one helps the other, great.  I’d also advise making one of the two initiatives the “primary” one.  It should always trump the other when things get tough (which they will).


For example:  I’m in currently in the process of building HubSpot, a new software startup.  We’re still in the early stages, so things are chaotic, exciting and lots of fun.  Simultaneously, I have OnStartups Enterprises (which is what operates this website).  I would label this more as “leveraging” vs. “hedging”.  The reason is that OnStartups, though operated as a business, does not make any direct revenue.  HubSpot is never competing for my time or energy with OnStartups (HubSpot always wins).  Finally, HubSpot does benefit from the existence of OnStartups as it is a great vehicle to find early clients and members for the HubSpot team.  Case in point:  I’m in discussions with an exceptionally talented individual right now that I’m hoping to bring on board full-time.  We connected via the OnStartups community and would likely not have met otherwise.

Summary of My Point:  With rare exception, it’s important not to try and have two (or more) initiatives going on that compete for your passion and energy.  Being a parallel entrepreneur with more than one equally exciting idea is a recipe for failure.  Pick one that you’re the most excited about and run with it.  If you do have multiple things going, make sure you’re honest with yourself and those around you as to what each opportunity represents and why they won’t conflict.

Posted by on Wed, Jul 05, 2006

COMMENTS

If you enjoy being a "parallel entrepreneur", you really are an investor/angel with a little more active participation: get things started then hand off to someone who will run with it full time.

posted on Wednesday, July 05, 2006 at 11:02 AM by


There is another "enterprise" that often gets in a way when trying to start a busines, making one a "parallel" entrepreneur: raising a child. It's much less stressful if you don't have children yet, or perhaps if your children have already grown up.

posted on Wednesday, July 05, 2006 at 2:36 PM by


Isn't OnStartups powered by HubSpace? in that case, it seems more like being your own first customer / eating your own dog food, than a parallel endeavour.

posted on Wednesday, July 05, 2006 at 5:25 PM by Shannon


Shannon:

Indeed, OnStartups.com is running on the software platform created by my new startup (HubSpot). So, there are definitely synergies there.

As you noted, it's a great way to be my own first customer. Also, as you'd expect, HubSpot runs on HubSpot too.

posted on Wednesday, July 05, 2006 at 5:31 PM by


Great article and I see a lot of similarities to my entrepreneurial experiences. I would be interested in hearing your take on being a Parallel Entrepreneur in relation to people like Richard Branson.

posted on Thursday, July 06, 2006 at 12:10 AM by Brad Stewart


I think that point 2 - "Having a Day Job " is an important point of discussions. Many of the "want to be entrepreneurs" think about and pro bably start working a bit on their dream project while working having their day job intact. The initial planning and testing of their business plan is while doing their job.
And as Dharmesh has correctly mentioned it can prove to be quite difficult to balance these two things. The most important reason I feel (and have experiences) that this is difficult is because you tend to like your own future business plan and endeavour much much more than your day job. And this is where the imbalance creeps.
Any other people who are in the same phase? Kindly share your thoughts.

posted on Thursday, July 06, 2006 at 3:24 AM by Aayush Puri


I think this post is most relevant to me as each of the above points is directly applicable to me.

1. I am working on two projects concurrently. Despite both projects being related they at the core remain two different projects. I know the pains which come with this. Every time I work on one project the other one is put on hold. Selecting one of the above projects is easier said than done as both the above projects mean a lot to me. Add to that I just finished reading "Losing My Virginity" by Richard Branson who inspires you to keep doing different things.

2. Yeah! I do have a day job that I have to fulfil. The worst part about having a day job as well as working on another project(s) is that everyday I have to shift from one mode to another. This transition can take more than a couple of hours everyday.

Somehow, I know that I might not be doing complete justice of either of my projects but I find it extremely difficult to give up on either. What to do?

posted on Thursday, July 06, 2006 at 4:59 AM by Aks


I'm currently working on my software while still holding onto my day job. I have been at it for the past 6 - 7 months now.

It's pretty exciting in the first 3 - 4 months. That is when you move fast and code the core components. You feel pumped I tell you because you're doing what you're really good at and there's no one to throttle your flow.

Then you begin to ask questions about whether the thing will succeed and whether you're burning away time that could be better utilized gaining expertise in other more valuable stuff (like finance, mathematics, etc). My C++ application I'm guessing will need approx. 100K lines - I'm currently at 33K after putting in some 20 - 22 hours per week. My day job is really soul wrenching at times, and you don't know what it's like to come home crushed after a 10 hour day and put in 2+ more hours into your project.

posted on Thursday, July 06, 2006 at 7:44 AM by RV


100K lines of code and that too in C++ -- thats pretty huge. It would have certainly taken a bold decision from your part to pursue such a personal project of yours!
BTW I had some questions for you RV:

1. Do you ever feel like that the code you are writing is not that good as you can write just if you have more time at hand to devote to your personal project? Things like code review/refactoring are things that I find extremely difficult to do in my own personal projects. Do you skip these tasks for the sake of meeting some deadlines that you might set of your own or do you follow the reverse path?
2. In such an unstructured mode of developing software I am sure that none of the conventional/agile project management methodologies work in such an environment…but have you tried to come up with some guidelines that you follow and have benefited from them?

posted on Thursday, July 06, 2006 at 9:31 AM by Aayush Puri


How apropos: I drafted, and then chickened-out on posting, a topic in the OnStartups forums yesterday on just this. The "big" startup I am driving has hit some funding delays after our first funding deal fell through (for the very best of reasons, I hasten to add).

In the meantime, I've had another couple of great ideas, one of which I am working on pretty seriously (yay! coding again! :-)

The way I'm "justifying" it is that it will only take a couple of weeks of serious effort to get this new idea kick-started. After that, there are three scenarios: 1) the "big" venture starts happening and I truly don't have enough time for the "fun" one, and 2) the "big" one fails to happen (and, for reasons of past pain I am refusing to go into it one unfunded - been there, done that)) but the "fun" one takes off in some measure, or 3) both take off.

#3 is the "nice problem" - in that situation I can afford to hire some hands to take care of the "fun" project which will largely need maintenance rather than serious input by then;

#1 and #2 I don't have to worry about right now - I have at least a couple of weeks before I have to make any serious decisions on this.

or am I just Hedging :-)

posted on Thursday, July 06, 2006 at 11:34 AM by Mike Morris


In all honesty, it doesn't sound like you're leveraging or hedging... It sounds more like you're playing.

Have fun! But if you're serious about your 'big startup', how can you just ignore it for two weeks? Speed isn't the only thing, but momentum lost is hard to regain.

posted on Friday, July 07, 2006 at 10:39 AM by Shannon


Hello Aayush.

I am actually a lot more productive writing code alone than I am in my current team. Contract based design, unit tests (where sensible), RAII, rigorous error checking for function calls, proper documentation, code re-factorings that make progress a lot faster - the works. "Wasting" time on such fancy stuff without doing any real work will simply not go down well with my current team.

My personal motto is not to redesign something unless there is a distinct advantage to be gained by redesigning. I need to see progress to keep me going, and progress doesn't happen if you keep tinkering with stuff that already works. For this reason alone, I sometimes put up with smelly design (but go back to fix them when I'm in the mood..).

posted on Sunday, July 09, 2006 at 5:10 AM by RV


Interesting topic.

I agree on the leveraging vs hedging point. This has to do with focus, which is key to success for anything in life.

I must add that even if one has the right motivation (leveraging) for working on 2 projects, they need to have the rare ability to execute well on multple projects at the same time. I see very few people having this gift. I know many who think they have it, but they don't. I am talking about Steve Jobs type people.

But if you are such a talent, then parallel entrepreneurship can be a lot of fun.

posted on Tuesday, July 11, 2006 at 5:22 AM by Parallel Entrepreneur


I wonder how big a startup has to be to count as a parrallel entrpreneur effort. I just finished reading the Long Tail which talks about a lot of small efforts or pieces of content that make some money. The author has a day job at Wired, started a blog, and wrote a book. Does the Blog and book count as parrallel efforts? What about all the people that post photographs on stockphoto, multiple products on ebay, create objects for Second Life, bid on projects on ifrreelance.

These are essentially becoming multiple small businesses. Some may become large efforts like "The Long Tail" book. Otheres may stay in realm of hobby to part time job (ebay sales).

We may need to look at other industries like Real Estate development for ideas as most reasonable sized developers have multiple projects going on simultaneously in different corporate structures and markets.

To end the rambling I believe that concepts like "The Long Tail" and Web 2.0 are going to change our defintions related to the resources required (time and capital) to create businesses that generate positive cashflow and potentially large growth.

posted on Wednesday, January 03, 2007 at 8:51 AM by DanO


I appreciate the sentiment of the post, but strongly disagree. It takes some real effort to segregate your ventures, and hiring teams that are very focused on each business, but I have found Great success in being a parallel Entrepreneur. I have found the efforts are able to leverage off of each other and share momentum. There reason there is mutual funds in investment is to diversify. The same principle can hod true in starting small businesses.

posted on Saturday, November 17, 2007 at 10:03 AM by Rich Christiansen


I just found this article using the Google search of the blog. Before commenting here, Dharmesh, is this a subject you've discussed subsequently? It's been two years, and in the current economy, I think those people who still have jobs :) -- or who might be offered one, soon :P -- would really think hard about quitting.

posted on Thursday, April 23, 2009 at 12:50 AM by Tariq Nisar Ahmed


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