I’ll admit, I’ve fallen horrible victim to the entrepreneur’s trap of trying to work on multiple startups at once. During the 2000’s I once had 5 startups that I was running at the same time. I used to think it was a badge of honor, that I could manage so many priorities at the same time.
I learned over time, it’s just a horrible strategy that works for pretty much no one and will likely lead to startup failure.
I get tons of emails from aspiring entrepreneurs that are some version of “Hey Wil, I’m working on these 2-3 startup ideas and trying to figure out which one to pursue. What do you think?”
I’ve answered this question so many times that I figured I may as well just give you the detailed version once and for all.
TL;DR – Like shots of Tequila, it sounds like fun but it’s a bad idea. You’ll probably do it anyway, so I’m just warning you that it ends poorly.
“If I spread my risk across a few startups, I’ll wait to see which one hits, and then I’ll focus on that until it becomes a rocket ship. It worked for Mark Zuckerberg with WireHog versus Facebook. It should work for me.”
The implication there isn’t that you’re optimizing for success as much as you’re trying to hedge against startup failure.
The reason the “hedge against failure” method doesn’t work is because instead of trying to find a good bet, you’re lowering the chances that any of your bets will work at all.
That’s because success with a startup isn’t the same as being dealt a hand of cards that might be crap or it might be blackjack.
Unlike pure gambling, the success or failure of a startup is infinitely tethered to the amount of effort and focus an entrepreneur puts into its success.
More time = more success. Less time = less success.
Putting in half an effort on one startup idea and half an effort on another is almost like saying “I’d like to guarantee both of these will fail by taking away the one thing I can do to make them succeed – my focus and energy.”
In order to understand why reducing your focus on any one thing is such a problem, you first have to appreciate why creating a startup is unlike any other use of your time, including your current job.
The very nature of a startup is that you’re creating something from nothing. The amount of effort to create is exponentially more than the amount of effort to manage. Working at a corporate job has it’s own challenges, but you’re not inventing your job as you go.
The best analogy I can give is this – creating a startup is like building a house from a bunch of trees with no blueprint and a hand saw. You’re inventing the outcome from scratch and working furiously to not only see if it works, but to provide the shelter you need to see it through. See what these entrepreneurs have to say about the reality of working at a startups.
Comparatively, working at a regular job is like remodeling the inside of an existing house – all the structure is there, you’re just improving upon it which has real challenges. But at the end of the day, you’re doing it inside a house that someone else already built.
Imagine in that scenario you said “I’m going to go ahead and build two houses at the same time and see which one turns out better.” While you’re doing that you’re increasing the likelihood that you’ll never complete either and that you’ll be cold and wet with no home.
That doesn’t sound too awesome.
Startups don’t succeed as random whims that turn into something amazing. You’ll read about stories like this where a company “just tried this one thing” and it turned into Slack or Twitter or Facebook.
No Founder will tell you that they built a company with half of an effort. They may have had to work on something else to help pay the bills (which actually just made success harder) but they won’t tell you “it happened magically while I spread my bets.”
Assume that for every startup success there are 100 failures. Among those 100 failures you’ve got dozens of teams that put their heart and soul into the company and it just didn’t work.
Deciding whether you want to work on that one mobile app that might be the next Instagram or that one services business that might get you better paid than your current job is a hard decision – I get it.
But the fact is you have to make a decision if you want to actually be successful. Hedging your bet across multiple startups is akin to saying “I’m not really planning on any of these being successful” which is a bit of choice unto itself.
I hope you choose just one thing and rock it.
Also worth a read:
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.