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.
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.
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.