The evolution of parallel entrepreneurship exemplifies today’s experimental economy


In today’s world planning is close to obsolete. Companies small and large must experiment to find what works and what doesn’t work. The lean startup movement has provided a clear model of how to iterate through trial, error, and finally success.

There have been many discussions around parallel entrepreneurship and whether it diffuses resources and energy rather than focusing entrepreneurial capabilities on a single endeavor, its rise is a sign of the times.

Entrepreneurs do not want to try a single venture, however many times they can pivot or iterate within that model. They want to try multiple ventures in which they can learn, cross-pollinate, and find what will succeed across the broadest possible domain.

An article in today’s New York Times titled Entrepreneurs Help Build Start-Ups by the Batch provides a good summary of the movement.

What is new is the number of prominent entrepreneurs and investors who are now going this route rather than staking their fortunes on single follow-up acts or taking less active roles as angel investors or venture capitalists.

“Venture doesn’t allow us to explore, only to accept and deny,” said Michael Jones, chief executive of Science, a builder platform in Santa Monica, Calif. He and a longtime entrepreneur, Peter Pham, started Science in 2011 with $10 million in venture backing, followed by $30 million from the Hearst Corporation.

Most of these investors-cum-inventors are motivated by personal passion to create companies. Under this model, entrepreneurs often tap their own networks and wallets to finance their ideas.

The piece addresses the issue of focus and how much attention can be paid to portfolio companies, constrasting it favorably with incubator models:

Company builders say they provide a missing link in the life cycle of start-ups and do so more effectively than incubators. “The primary difference is focus,” Mr. Camp said. “I plan on creating just a couple companies per year, and spending significant time with all of them.”

Hunter Walk, a former director of product management at Google, said, “What’s often needed at the early stages isn’t more capital in a vacuum, but people with operational experience who can give their full attention to these companies.”

At Advanced Human Technologies Group we are engaged in the relatively early phases of building a parallel entrepreneurship model. As many of the other models, we focus entirely on our own ideas, so they can be designed to fit with our capabilities and create a cohesive model rather than a scattered portfolio.

Some company builders invest in a mix of their own ideas and early-stage concepts that fit a particular theme. Others, like Mr. Palmeri’s company, focus almost exclusively on homegrown projects, though they will recruit co-founders and teams to expand the companies into independent entities.

“It’s a highly collaborative process,” Mr. Palmeri said. “By the time we look for outside funding, the idea may have taken many different shapes.”

The entire article is definitely worth a read as it covers the most prominent issues in the conversation around parallel entrepreneurship. As we evolve and learn from our own work in the space, we will be sharing more.