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This first appeared in the Wall Street Journal’s Accelerator series.
A few our entrepreneurial heroes work on more that one company at a time. Steve Jobs (Pixar, Apple), Elon Musk (Tesla, SpaceX), Jack Dorsey (Twitter, Square), and Reid Hoffman (LinkedIn, Greylock). And we regularly hear of entrepreneurs who are working at companies that acquired their first company who are now working on new companies while still at their acquirer.
It’s takes an extraordinary talented entrepreneur to be able to do this. So, should you try to emulate this? “Mostly” no.
If you are working on your first company or you don’t have a clear track record of success, put all of your energy into your first venture. Go all in, unambiguously. Your employees will expect, and respect this. Your customers will hope for this. Your investors will require this. And, the likelihood of your success will increase.
That said, I encourage every entrepreneur to have their own equivalent of Google 20% time, where you spend 20% of your time on something other than your primary company. If you are a first time entrepreneur, invest this energy in things that directly benefit your company. Find a peer group like Entrepreneurs Organization and invest time and energy in learning from and giving to your peers. Invest some of your 20% time in your local startup community, taking lessons from my book Startup Communities: Building an Entrepreneurial Ecosystem in Your City, which will have immediate positive impacts on you and your company’s reputation in your local ecosystem. Or invest actively in your own personal development as an entrepreneur through reading, spending time with other entrepreneurs, and actively engaging with accelerators like TechStars.
Once you’ve had some success, even if you are still running your first company, start expanding the definition of what “mostly no” means. I encourage every CEO I work with to serve as a director on another entrepreneur’s board. If you’ve made some money, don’t be afraid to make some angel investments in other companies. But stay focused on your business or else you might find yourself in a position where you suddenly don’t have the success you think you do.
Once you’ve sold your first company, or taken it public, you can start diminishing the definition of the word “mostly.” Some entrepreneurs love to be involved at the inception stage but don’t want to run companies. Others like to have a portfolio of companies they are working on at the same time, with one being the primary company. An example of this is my long-time friend and entrepreneurial collaborator Rajat Bhargava. We’ve now done nine companies together, with four of them currently active. Rajat is CEO of one of them (StillSecure) and a major shareholder and board member of three others that he’s helped co-found that I’ve funded (Yesware, MobileDay, and SafeInstance.) But this is an exception, build on a collaboration between entrepreneur (Rajat) and investor (me) over almost 20 years.
While it’s often tempting to start multiple companies, especially as you start to have some early success with your first company, resist this temptation, mostly.