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Saturday, October 11, 2014
Serial Entrepreneurs – The Founders Who Pursue Multiple Opportunities
Do most great entrepreneurs focus on one idea or pursue many? A quick look at billionaire entrepreneurs reveals that most of them are serial entrepreneurs.
Entrepreneurs are known for being able to focus on one thing to the point of making it a reality. Entrepreneurs are also known for their ability to recognize business opportunities when they come. These two qualities can be at odds with each other: focusing on one thing while looking around for more opportunities contradicts itself.
For many new entrepreneurs there is a real dilemma here. Should you start a lot of companies, or should you focus your whole life on one, like Zuckerberg?
To answer this question, we collected data on world’s top-earning entrepreneurs – the self-made billionaires who made money through starting companies. This year, there are 1426 billionaires in the world, according to Forbes. 960 of them are self-made, while the rest inherited their wealth. We focused on the business history of the 960 to figure out how they made their money. Specifically, did these billionaires make it from a single business, or multiple ones. After crunching the numbers we found that 830 of them made money from more than one business, while 130 derive their wealth from one business.
At the very least, it means that most of the top earning entrepreneurs in the world are serial entrepreneurs, having made money from two or more different businesses.
But what do we mean by “different” business?
How different of a business have these people done? We found the business ventures of the top five entrepreneurs with the most diverse backgrounds. As you look at their histories, you start seeing how they looked for opportunity but didn’t necessarily have a clear billion-dollar plan from the start.
How We Got Data on Serial Entrepreneurs
We analyzed profiles from Forbes Billionaires list and found self-made billionaires, who made money from multiple sources. From there we found entrepreneurs with the highest number of venture who are also the most popular as measured by Google Trends. We carefully analyzed the biographies of each billionaire-entrepreneur to compose a timeline of his ventures. For Richard Branson, to save space, we took only the most popular ventures, as the total number is 400 (according to Richard Branson Timeline of Ventures on Wikipedia). We also clustered very similar transactions as one venture.
The point at which each entrepreneur achieved a billionaire status is approximate. We used data from acquisitions of private companies, public offerings, and major stock price increases to gauge the time when these entrepreneurs hit the one billion milestone:
Sheldon Adelson became a billionaire after building a casino in Macau, China, and taking the company public. This transaction alone increased his wealth 14 times making him the third-richest American at the time.
Eric Lefkofsky owned 22% of Groupon at the time it went public at $12.8 billion valuation. Thus Lefkofsky’s net worth was over $2 billion.
Mark Cuban was one of the co-founders of Broadcast.com, acquired by Yahoo! for $5.6 billion, a transaction that most likely made him a billionaire. In 2011, Cuban was No. 459 on Forbes Billionaire list, with a net worth of $2.3 billion.
Elon Musk first became prominent as one of the co-founders of PayPal. When PayPal was sold to eBay for $1.5 billion, Musk owned 11.2% of the company, making him a multi-millionaire. He later became a billionaire, when the stock of Tesla Motors, a company he took public in 2010, rose 3 times. He owns a 32% stake in Tesla, which is valued at $5.82 billion, as of August 2013.
Richard Branson most likely became a billionaire from his airline business that includes Virgin Atlantic (founded in 1984), Virgin Australia(former Virgin Blue), and Virgin America. His second major income source was his record business, that he sold for $900 million in 1992.