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Serial entrepreneurship: a continual learning process

by Andrea Bowen, University of Surrey

"PERHAPS NOT SURPRISINGLY ALL OF THE ENTREPRENEURS INTERVIEWED HAD EXPERIENCED SPECTACULAR FAILURES AS WELL AS SUCCESSES. IT APPEARS THAT AS MUCH WAS LEARNT FROM BUSINESS EXIT AND FAILURE AS SUCCESS."

Serial entrepreneurs are nowadays being heralded as major contributors to the economy and wealth creation through their continual pursuit of new usiness ideas and opportunities. As such there is an increasing interest in how they go about identifying new ventures and what has been learnt from the pursuit of each subsequent idea or opportunity.Interviews with a small group of well established and successful entrepreneurs in the industry has shed some light on what has been learnt from each attempt to pursue a business opportunity.

These entrepreneurs are experienced and have a diverse range of business interests including demonstrably, successful hotels, restaurants and leisure facilities such as golf courses.Most of the entrepreneurs spoken to had learnt a great deal from exiting businesses and this knowledge directly contributed to and influenced subsequent opportunity recognition. Perhaps not surprisingly all of the entrepreneurs interviewed had experienced spectacular failures as well as successes. It appears that as much was learnt from business exit and failure as success.

What lessons were learnt?

Many of the entrepreneurs interviewed stated that experiencing one success after another often led to overconfidence.This does suggest they were initially overly optimistic about their own abilities and perhaps unaware of gaps in their knowledge or experience.

One of the entrepreneurs commented,

“I mean I thought at that stage that I could walk on water; you know you think you’re being very successful, that everything you do is going to be a success and you don’t really take into consideration any outside factors that may cause problems for you in the future.”

Business failure forced them to reassess their abilities and consider their aims more objectively.None ofthese entrepreneurs considered giving up after failure; in fact it could be argued that the business opportunities they pursued after a period of substantial failure were often more creative; and failure had made them even more motivated to make a success of subsequent ventures.What, perhaps, distinguishes the serial entrepreneurs from many others who have tried, failed and given up is their inextinguishable resolve, and their ability to rationally apply the lessons learned over one or more business ventures (including failure) to their next project.

Significance of networks

In most of the instances these entrepreneurs had taken substantial risk and lost significantly.However, they all appear to have reflected on the failed venture, refocused if necessary and tried again, in many instances starting with nothing more than their reputations - which were not always fully intact. It should be noted that over time their views towards risk may have changed but not to the extent whereby they became risk averse. Risk-taking became increasingly influenced by their perceptions of manageable risk coupled with effectiveness at decision making. After business failure this process was more rigorous, using more information sources, and a strong sense of belief that the benefits to be derived from the opportunity heavily outweighed the potential negative consequences.

Their personal and support networks played a crucial role in opportunity recognition, as they facilitated much broader and far reaching sources of information and access to resources, particularly funding capital. Each subsequent venture afforded more contacts and enhanced their networks.They actively sought to develop extensive networks and alliances across industries and attracted key facilitators /management staff which also assisted their ability to notice and exploit opportunities.

There is often a stigma attached to business failure and most of the entrepreneurs had experienced this to some extent.However in instances where the business failure was due to external factors such as general economic downturn they could rely on their pre-existing reputation to facilitate other business opportunities.This was not always the case and in instances where their reputation had been severely affected by the business failure, trust became an even more important factor. Even in such instances their remaining network contacts could be used to facilitate new opportunity recognition.This suggests another key reason why many of them overcame the stigma of business failure was their continual striving to build up a strong reputation built on trust and the effective exploitation of personal and professional networks to facilitate this.

In order to identify new opportunities many of the entrepreneurs were continually scanning the market, not necessarily overtly, constantly assessing the suitability of ideas/opportunities as they presented themselves. In all of the cases they responded very quickly to initial ideas and there were very short lead-in times from opportunity recognition to business development.This process was further refined in latter years as they developed support systems and built up reputations; which particularly facilitated access to funding.

What the serial entrepreneurs were increasingly learning to do was to quickly assess the perceived manageability of the risk of the opportunity, make informed decisions about overall feasibility, and use their networks effectively. This would suggest that serial entrepreneurship is an iterative rather than purely instinctive process.This in turn poses the question of whether all entrepreneurs have the potential to exploit multiple business opportunities if they chose to do so.

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