Parallel entrepreneurship goes mainstream


Back in the 1990s I became enamoured of Bill Gross’s IdeaLab, which was spinning off new web companies initially housed in its own support ecosystem. I loved that it generated and developed its own projects rather than looking outside for ideas.

Since then I’ve closely followed what I’ve thought of as “parallel entrepreneurship”, in contrast to the usual concept of serial entrepreneurship: establishing many ventures rather than doing them one by one.

Despite many leading lights saying that founders should be focused on one venture, I’ve always believed that it is possible – albeit extremely difficult – to launch and run multiple simultaneous ventures.

I certainly don’t have the patience or attention span required to focus on one project or arena of work, and indeed no interest in doing so. I acknowledge that I am far more motivated by living a fun and interesting life than maximizing my net worth, so I may not be a good role model for those seeking fortune. However even so I believe that parallel entrepreneurship offers great potential for massive financial success, despite its challenges.

Leena Rao at TechCrunch has just written a very nice piece The Rise Of Company Builders which describes the state of the phenomenon. While she prefers the terms ‘company builder’ and ‘studio model’, she also points that Twitter co-founder Ev Williams uses the phrase ‘parallel entrepreneurship’ in describing his attraction to the model.

The article mentions some of the other players in the space, including John Borthwick’s very interesting Betaworks, recent arrival Science, and Monkey Inferno. Rao writes:

Entrepreneur-turned-investor is a classic story arc in Silicon Valley but recently the plot has earned a twist. Certain operators are foregoing the traditional path of joining a traditional VC to instead create a studio-like holding operation. By doing so, they remain engaged with the grit and grassroots challenges of building a startup. They remain company builders.
Each model differs slightly. Some take bigger chunks of equity than others. Some of the studio creators take co-founder titles on certain startups. Many studios not only create and incubate ideas in-house, but also make seed-stage investments in startups outside of the company. But at the heart of what each of these studios is doing is using entrepreneurial expertise and in-house resources to help generate ideas and build companies at scale.

The advantages of the parallel entrepreneurship model include being able to use common platforms and resources, experience and lessons learned being readily shared, and the ability to experiment more as your entrepreneurial portfolio is diversified.

The disadvantages potentially include lack of executive attention if the model is not well constructed, and it being harder to find outstanding individual startup leaders, some of whom may be more inclined to come up with their own ideas even if their chances of success are lower.

Our own AHT Group (website soon to be updated to reflect current activities) is shifting towards a parallel entrepreneurship model. While we are currently comprised of just three primarily service-oriented companies, as much of our energy and attention as possible is going into building the platforms that will allow us to launch multiple companies in the near future. Not a lot of our activity is yet publicly visible, but we expect to launch a number of interesting new ventures before long.

Interestingly, Pollenizer and BlueChilli, both also based in Sydney, each have globally distinctive and very interesting parallel entrepreneurship models.

I am not at all surprised to see the parallel entrepreneurship model getting broader traction and moving into the mainstream, despite ‘focus’ still being one of the words most bandied about in startup-land. Most should resist the temptation of multiple ventures, but despite the extreme management challenges, the model is more viable today than ever before.

I expect to share a lot more on parallel entrepreneurship coming up, both on the broader phenomenon, and our own experiences as we go down that path.

  • Hey Ross, thanks for this. The term ‘parallel entrepreneurship’ is a bit of a distraction in my view. I think all startup studios like Pollenizer, Science-Inc and Betaworks still, in the end, have a focussed, obsessed ‘founder’ at the heart of the business that then gets the additional benefit of the resources and know-how around the studio. I suppose I am a parallel entrepreneur in that I am focused on the ‘how’ that helps each of our portfolio companies, but the companies themselves are a collection of vested founders that work on that business alone. Here’s our latest evolution:

    • Thanks Phil, very interesting to see your new model.

      I will think about it more, but perhaps you’re right that ‘parallel entrepreneurship’ is the wrong frame for this, and ‘company builders’ is a lot more accurate. Indeed you’re not running lots of ventures, you’re providing the framework which enables the parallel ventures, each one driven by entrepreneurs.

      Whatever the best way of thinking about this, I am sure this broad model – with all its manifold variations – is going to rise dramatically as an enabler of value-creating entrepreneurship.

  • A ‘Company Builder’ can create studio models to segment the product/s to a wider audience and market.

  • Rob Rawson

    I think the idea of multiple businesses at the same time is more for investors or incubators. For an individual entrepreneur it’s usually a disaster for them to work in more than one business at the same time. There do seem to be exceptions. For example Richard Branson has dozens of businesses. However I do not actually think this is an exception. He is acting more as an investor and is not running any of these companies.

    I personally struggle with this issue however as our business is a start up ( started in April last year), however we have two different parts of the business, global recruiting and a SaaS product. Related products, but I’m always trying to evaluate this question of focus.

    • Thanks Rob. Your, Phil’s and others’ comments are helping me to think about this, though more thinking still to do 🙂

      This is partly about semantics. To my mind someone who sets up one business or multiple businesses is an entrepreneur. If they are purely passive then they are an investor, but if they set up and are involved in any way they are an entrepreneur, even if it is primarily run/ managed/ built by someone else.

      So this ultimately comes back to leverage (which in some cases we could call delegation). In your case it sounds like you need two people who are fully hands on in each business. For others who have set up multiple businesses, it is an issue of being able to find people who have the talent and enthusiasm to run each business. That is harder, as Phil points out in his post, as you want people who feel ownership of the idea and venture. But it is still possible.

      I describe myself as ‘Founding Chairman’ of my companies. I am the founder and am an entrepreneur. But (in theory) I should not be running these companies, just helping to shape them.