Dan: How important is it to focus on one business venture at a time?
In the early stages of starting a business it may be tempting to work on multiple businesses at a time in order to hedge your bets. If you’re on your own as a solo founder and don’t have any particular obligations, it may be a decent way to experiment and find what business is most viable before you make a full commitment*. However, once you take on additional obligations such as a co-founder, employees or investors, it’s important to focus on that one business.
As an investor, we look for teams that are truly passionate and dedicated to their business. Life in a startup can be tough, and it’s hard to find enough hours in the day to work on one startup, much less two. Company culture can suffer, as it may be hard for those around you to give 100% when you’re spreading yourself across multiple companies.
While there are exceptions to the rule (Elon Musk, Jack Dorsey), these are typically entrepreneurs that have had a track record of huge successes and have the ability to attract top notch talent in order to fill in the gaps when they can’t be there. Even then, their track record can be mixed.
If you do decide to focus on more than one opportunity, be sure to be transparent with those you work with. It’s best to set expectations in order to minimize any potential conflict that may arise down the road.
* That said, when the time comes to focus on one business, I’ve seen founders delay the decision too long as it can be tough to make the call as to which business has more opportunity.
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