I’ve been noticing a trend that might have started with folks in the entertainment biz in southern california since the beginning of time but certainly has been happening more and more since the web 1.0 downturn.
The trend is for the entrepreneur to work on multiple projects at the same time.
When I was working in Silicon Valley during the entire 90’s that was extremely rare. You didn’t see the founders of ebay, Danger, Yahoo, Netscape, WebTV, Macromedia, @Home, Excite etc run their companies and at the same time work on other separate businesses or projects.
But it’s happening more and more. We see entrepreneurs starting multiple businesses at the same time. And I could see why. They get to build a portfolio, hedge their sweat equity, and work on diverse set of interesting things.
This is a tough one for an investor to get behind. We want our very best entrepreneurs working on the company that we either have backed or want to invest in.
(I realize that many entrepreneurs will cry foul here. I mean after all, VCs get to build a portfolio so why can’t they. It may look like a double standard here but VCs aren’t running these companies. And we are focused 100% on our own company otherwise our investors wouldn’t invest in our funds.)
Ultimately in early stage investing we are backing people. I think founders that don’t want to commit 100% aren’t helping these companies reach their fullest potential. The companies don’t get enough time/focus, employees get mixed signals, end users suffer (and you know how important they are). Plus, every early stage company goes through it’s ups and downs. If not every day then every week it seems. If the founder isn’t 100% committed then it’s hard to deal with those ups & downs properly.
In the future I suspect we will see more of this. But I’m not sure it’s the best way to do things.
(clarification: to be clear the “portfolio entrepreneur” is a very different thing than the serial entrepreneur. I’m a big fan of the serial entrepreneur and I’ll take that one on in a future post).