Serial Entrepreneurship

 

Serial entrepreneurship refers to the repeated behaviours of entrepreneur. 

 

 “There are two types of entrepreneurs: novice entrepreneurs, who launch a business for the first time, and habitual entrepreneurs, which include serial entrepreneurs, who launch businesses sequentially, and portfolio entrepreneurs, who run multiple businesses concurrently.” (Plehn-Dujowich, 2010)

 

Plehn-Dujowich suggests that serial entrepreneurs differ substantially from first time entrepreneurs. They argue that the serial entrepreneurs develop new capabilities over time that makes them more effective entrepreneurs. For instance, they may develop heuristics that guide their decision processes that reduce the analysis task needed to assess risks. These types of advantage lead to equal or higher success rates for serial entrepreneurs and a higher likelihood of sticking to entrepreneurship as a career choice.

Serial entrepreneurship theory starts with the idea that entrepreneurs need to decide whether to stay in business, leave the business to start a new business, or leave the business to enter employment.

The process of starting businesses then exiting them to start new ones that seem even more promising is the serial entrepreneur’s way. Each business is a stepping stone to the next, a means to an end, not an end in itself. A policy implication that stems from the study is that reducing the cost of shutting down a business is just as important as reducing the cost of stating a new business. 

Some scholars have argued that serial entrepreneurship is temporal portfolio entrepreneurship since most entrepreneurs would like to launch more than one business but may feel unable to deal with more than one at a time. Perhaps entrepreneurs may prefer to learn from each experience sequentially rather than deal with too many variables all at once (Sarasvathy, Menon, & Kuechle, 2013).

 

Sources:

Plehn-Dujowich, J. (2010). A theory of serial entrepreneurship. Small Business Economics, 35(4), 377-398.

Sarasvathy, S. D., Menon, A. R., & Kuechle, G. (2013). Failing firms and successful entrepreneurs: Serial entrepreneurship as a temporal portfolio. Small business economics, 40(2), 417-434.