Serial Entrepreneurs: A Unique Breed of Entrepreneurs - Dissertation Example

Serial Entrepreneurs: A Unique Breed of Entrepreneurs Introduction A usual matter in the field of entrepreneurship has been the two major kinds of entrepreneurs—the ‘opportunist’ and the ‘craftsman.’ The ‘opportunist’ is driven by a desire for profit and the challenge of building a profitable, successful company, whereas the ‘craftsman’ is driven by a need for independence. Serial entrepreneurs are both opportunist and craftsman; they are a unique type of entrepreneurs (Welsch 239). Serial entrepreneurs take pleasure in the challenge of frequently, persistently, and constantly setting up new enterprises. Numerous entrepreneurs have succeeded in this setting, making the most of the ever more positive, advantageous tax environment, and generated massive profits. This paper focuses on the philosophy, motivation, and mindset of serial entrepreneurs that differentiate them from regular working class citizens. Serial entrepreneurs, also known as habitual entrepreneurs, were already present since the advent of industrialisation. Starr and Bygrave (1991) emphasised that a widely recognised definition of serial entrepreneurship is absent, even until now. The most widespread definition claims that serial entrepreneurs are “those entrepreneurs who have sold or closed their original businesses but at a later date have inherited, established, and/or purchased other businesses” (Welsch 239). Or, basically speaking, “they own one business after another but effectively own only business at a time” (Welsch 239-240). These entrepreneurs usually want to abandon an original enterprise when entrepreneurial prospects are believed to have been worn out. Once they abandon the venture, they look for new entrepreneurial prospects. Serial entrepreneurs start quite a few ventures, some of which thrive and others fail. Many scholars have attempted to gather information that reveals common attributes of serial entrepreneurs. Cowe (1998) reported that serial entrepreneurs have a tendency to be starters, individuals who are exceptionally skilled in the initial phases of a venture, but not that good at the maintenance task (Welsch 242): “They are brilliant at leading from the front and not so good at being in the background making sure the machinery works.” Other researchers claimed that they are usually the leaders and unusually skilled at communicating and inspiring an idea. Birley and Westhead (1993) believe that serial entrepreneurs are often young when they embark on their first venture and are degree holders. According to Welsch (2003), they are generally younger than other entrepreneurs, more probably spent their own resources at the opening of their ventures, more probably have role models, and more probably keeping a tradition alive. Westhead and Wright (1998) stated that serial entrepreneurs are apparently interested in gaining financially or building up wealth and achieving credit for their entrepreneurial efforts. They are much more likely than neophytes to have worked in small organisations before the launching of their enterprise. Several of the general attributes that many researchers have disclosed are that serial entrepreneurs have had an excellent track record, usually have an experience in an unstable business environment, are diligent workers, are exceptional leaders, have a desire to be on top of things or in control, have a devotion to duty, and are strongly determined to succeed and win. Philosophy of a Serial Entrepreneur Serial entrepreneurs have fascinating philosophy about work, life, people, and business. This philosophy arises largely from life’s early experiences and in the workplace. Serial entrepreneurs are completely persuaded that the ‘business must make money’ (Rasul 88). If they fail to make a business profitable, both the customers and the business are negatively affected. Serial entrepreneurs have explored the nitty-gritty of business, they have a broad knowledge about how business operates, and they have a considerable understanding of how their ventures could be successful. They give their best effort to guarantee that their products considerably increase the value of their firms. As stated by one serial entrepreneur: “The only reason I exist in this company is to make money for the company. If I don’t make money for the company, then there’s no reason for me to be here” (Griffin et al. 123). Serial entrepreneurs are swollen with pride when their products are in demand because their product innovations were accepted by customers, who were eager to shell out cash to purchase them, and they have made the business more profitable and thriving. They are often aware of the effect of their product’s effect on the firm. Serial entrepreneurs are predisposed to believe that new technology is a very important part of the business. They are highly technically skilled. Yet, they are concentrated on customers and view technology as a way to meet the needs and demands of their customers. For serial entrepreneurs, making customers willing to purchase their products is their major sign of success (Skorman 42). Technology often is needed to achieve that success, but serial entrepreneurs have a tendency to not get too preoccupied on the technology. And although serial entrepreneurs often will patent their ideas, they claim exclusive rights for the ideas that they think can make the business profitable. They fight the temptation of merely working on interesting new ideas. Rather, they prioritize the things that will make their business successful and highly competitive in the marketplace (Cowe 90). Prioritizing the customers, serial entrepreneurs apply technology to work out actual problems. Because of their customer-oriented philosophy, serial entrepreneurs usually are focused on the ‘greater good’. In short, they try to strike a sense of balance between the needs of every stakeholder—customers, employees, company, and so on. Focusing on the greater good is a major philosophy that characterizes sensible, judicious individuals, indicating that serial entrepreneurs are prudent in how they contribute to the welfare of humanity and the world (Griffin et al. 124). There is a selfless, philanthropic philosophy to these serial entrepreneurs. One serial entrepreneur eloquently explained this philosophy (Griffin et al. 124): I’m always trying to serve the greater good. And that’s the simplest thing. However, it’s a broad greater good and it encompasses short-term and long-term processes, people in business, risk, and everything else. There’s a greater good that integrates everything. Somehow that keeps me grounded and going. And maybe it’s hard to quantify it, but it certainly exists in whatever fuzzy or nonfuzzy sense. And that lets me cut through all decisions. It just makes life impeccably easy; even though there are lots of inter-balances. But I’m always serving the greater good. Prioritizing the greater good for the business is associated with the dedication of serial entrepreneurs to profit. These people aim to build ventures that give them the opportunity to work out fascinating problems. According to Mayer (2009), this dedication to the greater good for their organizations usually develops early in their careers. Motivation and Mindset of a Serial Entrepreneur Entrepreneurs are predisposed to have unique motivations for their preferred endeavours. Serial entrepreneurs have a tendency to possess greater inclination towards innovation or novelty, intense risk-taking behaviours, and a greater desire for success than do neophyte entrepreneurs. They are at times, but not all the time, motivated by potential monetary gain (Welsch 240). Westhead and Wright (1998) discovered that the motivations given by serial entrepreneurs were different from those mentioned by portfolio entrepreneurs. Portfolio entrepreneurs are called ‘parallel entrepreneurs’ and ‘multiple (business) entrepreneurs’ (Welsch 240). These entrepreneurs have built several businesses but still have possession of the most current enterprises launched before the launching of their new businesses. Wright and colleagues (1997) have reported that the motivations of serial entrepreneurs for starting up enterprises change over time, with financial interests becoming less of a priority in later enterprises and several owners of subsequent companies usually want less uncertain or risky ventures. Many researchers also emphasised that serial entrepreneurs are highly motivated by achievement, innovation, and risk. A frequent motivation of serial entrepreneurs for an initial venture is the disappointment stemming from being involved in political and bureaucratic organisations. Several researchers also discovered that monetary prospects were a strong motivation for serial entrepreneurs in their initial ventures and that less uncertainty and risk became a top priority in succeeding ventures (Cowe 90). Researchers also discovered that usual motivations for subsequent start-up were the need to carry on with the mission of building a successful organisation, and the need to gain from tax breaks or incentives (Stoddard 93). Birley and Westhead (1993) found out that serial entrepreneurs began their initial ventures due to a tendency to emphasise self-accomplishment, personal autonomy, and job fulfilment. They also admitted that they have a desire for recognition, personal growth, greater riches, tax incentives, and to pursue their role models. Westhead and Wright (1998) discovered that serial entrepreneurs stressed the desire for personal growth and autonomy. After establishing an enterprise, an entrepreneur could be more reluctant to embark on riskier projects and could cut down the amount of personal resources that s/he is eager to invest in a new enterprise. Several serial entrepreneurs proceed immediately to their next project and some embark on an indirect course of action through lengthened vacations, terms of employment, and other ventures. They may embark on a new enterprise or look at acquiring a current business. Westhead and Wright (1998) claimed that serial entrepreneurs may acquire instead of build their later enterprises so as to gain ownership of bigger enterprises. The researchers also reported that there may or may not be a weakening in the stress on profit or monetary gains in the later enterprises and that personal wealth, desires, and motivations affected the search effort. Most urban and rural serial entrepreneurs admitted that they would like their later ventures to expand in both employment and profit. Wright and colleagues (1997) found out that serial entrepreneurs have a tendency to be driven by autonomy, the need to manage their own organisation, and profit generation for their initial projects. For their subsequent enterprises, the major motivational aspects are more likely to be the desire to create a thriving, profitable business, or revive a failing organisation, regulate their financial uncertainty, and confront the task of keeping on improving and expanding their entrepreneurial projects. The idea that certain entrepreneurs may take part in several business projects-- either all at once or in sequence-- has been clearly accepted by several scholars over the recent decades. Contextual settings and environmental concerns, like phase of the business life cycle and location of the business, are specific concerns which appear to have an influence on serial entrepreneurship. The motivations for serial entrepreneurship can be somewhat varied, and involve a desire for financial gains, a sense of responsibility, autonomy, the certainty that it “adds to the excitement of life” (Skorman 6), and the need to help local communities. Serial entrepreneurs possibly possess resources or wealth and abilities that other budding entrepreneurs do not have. It may sensibly be believed that they will have acquired broader experience in building and managing a business, and hence surpass most of the ‘learning curve’ difficulties normally confronted by novice entrepreneurs (Skorman 6-7). Nevertheless, this does not consistently seem to be the case. In contrast, there are several findings to prove that serial entrepreneurs are capable of easily acquiring sources of financial support for their subsequent ventures, perhaps due to a ‘better track record’ (Stoddard 41). One of the most current researches on serial entrepreneurship has been the study of Westhead and colleagues (2005 as cited in Mayer 20-21), who look at the portfolio and serial entrepreneurs in private companies in Scotland, levels of performance of companies run by neophyte, organisational strengths, financial assets, and search process. They discovered that portfolio entrepreneurs are more likely to have greater resources and experience than other entrepreneurs. Within the group of serial entrepreneurs, they discovered that majority of the respondents are more likely to manage their subsequent enterprise, had started on the enterprise as a new business instead of inheriting or acquiring an old business, and were family-based ventures. Sarasvathy (2003 as cited in Mayer 21) examined literature about serial entrepreneurs and their levels of performance, supposing that one company’s success created the motivation to embark on a new one. He found out that even with an unsuccessful venture, a serial entrepreneur may discover other prospects and give it a shot one more time if s/he did not think it was a personal letdown. Furthermore, he argued that the formation of new ventures could be the motivation of the serial entrepreneur who views him/herself as successful, and that an unsuccessful business attempt did not bring about reluctance or distaste to try again. He believed that building several businesses reinforced a serial entrepreneur’s anticipation of success, experience, and knowledge. He also proposed that numerous serial entrepreneurs did not view business failure as a sign of unsuccessful entrepreneurial endeavour. Amaral and Baptista raised the following question (Mayer 21): What distinguishes serial entrepreneurs who switch directly from owning a first firm into owning a second firm, from serial entrepreneurs who only re-enter business ownership some time after the first entrepreneurial experience, and what are the individual, organisational, and environmental variables influencing the choice of becoming a serial entrepreneur? They argued that the serial entrepreneur was more skilled at seeing business prospects after the initial venture than an entrepreneur who owns only one company. Furthermore, Amaral and Baptista (as cited in Mayer 21-22) discovered that professional credentials, paid work, experience in owning a business, and age enhanced the possibility that the entrepreneur would turn into a serial entrepreneur after having a thriving initial venture. Motivation largely related to attaining purpose, mastery, and independence mostly determines much of the everyday actions and decisions of serial entrepreneurs. Serial entrepreneurs are driven by their own interest in resolving issues, the bliss of a breakthrough, the mastery of business skills, and the internal fulfilment of building something new that brings about positive changes in people’s lives (Westhead & Wright 73). These aspects motivate serial entrepreneurs to look for and embark on new ventures and maintain them overtime as they confront organizational and technical challenges. This infectious, real, and wholehearted motivation drives other people to pursue the serial entrepreneur’s goal. Significantly, these three attributes work together and affect one another (Stoddard 44). Indeed, scholars have tried to make a distinction between motivation and personality, especially at the very intrinsic aspect of motivation. Several scholars even claim that intrinsic motivation and personality are actually two sides of the same coin. Motivation, which is intrinsic to a certain extent, can be considerable influenced by extrinsic aspects like managerial abilities and organizational culture. In contrast, personality is almost unchangeable (Rasul 85). Philosophy is built through early experiences. Motivation, personality, and philosophy work together to create a holistic image of a serial entrepreneur (Rasul 94); these aspects explain why serial entrepreneurs will exert their greatest efforts to be skilled at embarking on new ventures. When pursing a new venture, serial entrepreneurs examine both what they know, and what they do not know. Then they try to gain mastery of what they have to know by investigating thoroughly and studying rigorously. Serial entrepreneurs aggressively look for information across numerous issues and subject matters, ranging from competitors and markets to customers, from specific knowledge about the organization’s capacity and strategy to wide-ranging entrepreneurial knowledge. They gain this knowledge mostly through independent learning, while also gaining the technical and industrial knowledge from whatever field seems to be suitable to their expertise (Starr & Bygrave 227). If there is anything serial entrepreneurs have to learn, they master it, regardless how remotely unrelated a field to their education and experience. Conclusions Serial entrepreneurs embrace powerful philosophies about people, life, business, and their own contribution to the society. They have definite, precise perspectives about the function of profits and companies and about their role in the larger capitalist marketplace. Serial entrepreneurs place great importance on customers. Even though they strongly embrace the idea that businesses exist to generate profit, they at the same time intensely value the welfare of the customer and the larger society. Works Cited Birley, S. & P. Westhead. “A comparison of new businesses established by ‘novice’ and ‘habitual’ founders in Great Britain.” International Small Business Journal 12.1(1993): 38-60. Print. Cowe, R. “Serial Entrepreneurs.” Management Today (1998): 90. Griffin, Abbie, Raymond Price, & Bruce Vojak. Serial Innovators: How Individuals Create and Deliver Breakthrough Innovations in Mature Firms. Stanford, CA: Stanford Business Books, 2012. Print. Mayer, Margery. What Motivates a Serial Entrepreneur to Start New Ventures: A Multiple Case Study of Serial Entrepreneurs in Silicon Valley? Ann Arbor, MI: ProQuest, 2008. Print. Rasul, Shaf. Secrets of a Serial Entrepreneur: A Business Dragon’s Guide to Success. New York: John Wiley & Sons, 2010. Print. Skorman, Stuart. 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