First Time vs Serial Entrepreneurs
Michael Levin | Sunday, May 01, 2011 | Permalink
In his post, Fred Wilson discusses his experiences with investing in companies with new vs. serial entrepreneurs.
The best first time entrepreneurs have been stewing on their idea for quite a while. It is a personal passion of theirs and they bring to it a fresh take, a stubborn insistence on their approach, and they obsess about the idea 24/7. They often get the right product into the market at the right time and they capture the user's attention and usage with that product/market fit.
Where first time entrepreneurs often struggle is when the product works so well that they have to quickly build a company to support the product. Most of the time, the first time founder has not spent anytime thinking about what kind of company they want to build, what kind of people they want to surround themselves with, what kind of culture they want to create, etc. The first time founder often has no experience recruiting, managing teams, and building organizations.
Serial entrepreneurs, on the other hand, often struggle with the founding idea and getting to product/market fit. They start the second and third and fourth company because they love startups and they don't know any other way to work and be productive. But they often lack that passion around a singular idea that drives first time founders.
There are two main components of every successful startup: a good idea and strong execution. When VCs invest in serial entrepreneurs, it's usually early on and the entrepreneur has usually already proven their ability to execute effectively on a good idea.
However, companies started by first time entrepreneurs have yet to prove that they either have a good idea or can execute it effectively. A lot of these companies will fail before ever getting to the stage when they could catch a VC's attention. However, if they make it past this point, they have already proven their idea works in the market and needs the VC for large amounts of capital to scale their idea effectively.
With these two points in mind, it makes sense that serial entrepreneurs need more help with the idea and product/market fit, while the first time entrepreneur needs more help with scaling the business (recruiting, managing teams, etc.).