Multipreneurship, the future of entrepreneurship
Multipreneurship, the future of entrepreneurship
The framework for building businesses you've never heard of.
Hey all,
Last week, I had the chance to reconnect with my former boss, Nick. He was the CEO of the first startup where I was employed. Whenever I find myself mulling over major decisions, his advice is always valuable.
Lately, I've been contemplating where to devote my energy. I'm currently juggling my own startup, a handful of smaller projects, this newsletter, a YouTube channel, and a few other commitments. At times, it can be overwhelming, feeling as if I'm stretched too thin.
When Nick was immersed in his startup, he was wholly committed, not involving himself in anything else. He exhibited the same unwavering focus in his previous role at a large corporation. He’s the opposite of me. So, when I asked his opinion about my current predicament, his response surprised me. He said he regretted his tunnel-vision approach, arguing that it’s much more logical to diversify. He likened it to the strategies of a venture capitalist: "Think about it, if you're a VC, you're not betting your entire fund on one company, you're diversifying your risk among 100 ventures."
This provoked thought. It occurred to me that the current startup model has been heavily influenced by the venture capitalist model. We're often advised to pour all our focus into our startups, dismissing anything else as a 'distraction.' But you have to ask, whose interests does this narrative serve?
If a startup fails, the venture capitalist is fine, they have 100 other investments. But what about the entrepreneur? They're left to pick up the pieces, starting anew after years of investing themselves entirely into a venture that didn't succeed. All this while drawing a salary well below market rate - a rate often set by your VCs.
As this conflict of interests sat at the back of my mind, I came across the idea of 'Multipreneurship' by Greg Isenberg. He calls it the future of entrepreneurship, and I find myself inclined to agree. Let's take a look
N.B I’ve taken the headings and subheadings from Greg’s original tweet, and added some colour based on my own experience.
Multiprenership
1. Diversified Risk
Multiple ventures = multiple safety nets. Spread your chips and build resilience.
At the heart of this framework is a realisation. It's all too easy to view entrepreneurship through the rose-tinted lens of the success stories, a phenomenon Nassim Taleb would identify as survivorship bias. The vast graveyard of failures fades into the background because, in truth, failure isn't particularly captivating. There aren't many books, articles, or tweets detailing how Entrepreneur X invested 15 years into their startup, only to struggle in vain to find product-market fit.
The concept of Multipreneurship arises from acknowledging the world as it is, recognising the immense role that luck plays in this game. Often, the line between failure and success may hinge on a single event, a chance encounter, or a random external incident that propels a business towards success.
Spreading your bets across multiple ventures might diminish the odds of one of them blooming into a billion-dollar business. But it's not you who needs the billion-dollar exit—it's your VC. Multipreneurship is all about placing many smaller bets and, perhaps, intensifying your focus on a particular venture once it has proven to be a market winner.
2. Creator aligned
Creators are the new entrepreneurs. Marry their creativity with your venture, and gain access to their audience.
One of the biggest cash sinks for any business is acquiring users. Reportedly, over 40% of VC funding over the last 10 years has gone straight to Facebook and Google, with fast-growing startups throwing money at their ads platforms to reach their ambitious growth targets.
This spawns what can be termed the "VC hamster wheel". To sustain growth, you constantly need to secure more funding. Consequently, your equity continues to dilute, and the only viable path to significant earnings is through a massive exit. This, in turn, necessitates further growth, perpetuating the cycle.
Businesses that align with creators comprehend that collaborating with the right people on the right platforms can distribute your product at nearly no cost. This concept of a near zero-cost go-to-market strategy should be integral to your product development. If there's no cohesion between the creators and your product, it will become exponentially harder to place your products into the hands of paying customers.
3. Community Currency
Communities are the future. Grow them, serve them, and they'll become your strongest brand advocates.
I’ve waxed lyrical about the power of community-led growth. It’s what my startup exists to facilitate. I’ve made a tonne of videos on community-led growth on the new YouTube channel, and also done numerous Twitter breakdowns, so I won’t bore you with the details in this post.
The core of this point is you need to be viewing your customers as more than people who just buy and use your product. They are your marketers, they are your product managers, they are your customer support agents and their content writers. Or at least they have the potential to be if you can turn your customers into a community. It’s not easy to do, but if you set up your startup as a community-first one, life will get exceptionally easy.
4. Exponential Learning
Each venture is a lab. The lessons learned in one fuel the growth in others.
This is a significant point that I believe venture capitalists and others often overlook when advising founders to concentrate solely on one enterprise. The common belief is that any time not spent on your primary project will detract from its success. While this could be true if you were diverting time to perfect your cooking skills (which, by the way, you should do, slow-cooking a shoulder of lamb on a Sunday is one of lifes greater pleasures), I find it hard to believe that it would negatively impact your main venture if the time were spent trying to make something people want.
Through smaller ventures, I've learned skills and lessons that have directly benefited my startup. Launching a YouTube channel taught me about SEO, content marketing, video production, and identifying a niche. From my Kickstarter campaign, I understood the intricacies of dealing with physical products, and this newsletter has made me a better writer (and probably thinker).
Try choosing new projects that you believe will provide learnings that complement your existing ventures – the speed at which you can learn often determines how quickly your business can become profitable.
5. Cross-Pollination
Use the momentum from one venture to propel the others. Success breeds success.
This point is very similar to the above, except instead of talking about learnings, we are talking about cross selling between customers of your different businesses. If you have an agency, how you can build a small software product where your clients could be your first customer? How could you build a community that people would pay top dollar to be part of?
To be honest, I suck at this. I think it’s because if you’re trying different things based on interest, you don’t always have a clear customer persona in mind, and if you are building different products for different people with each of your businesses the chances of cross-pollination are very slim.
For example, my YouTube channel was focused on Notion users, this newsletter is focused people who love startups, my software product is designed for founders who want to scale without throwing tonnes of money at expensive marketing. There’s no tight thread that knots these users groups together.
That’s why I wrote last weeks newsletter on the importance of serving one particular customer you really love. Build everything around that and be consistent with it. If your whole lifes work is around making x type of persons life better, it doesn’t matter if you make 10 different businesses, you’ll always be able to bring the customers of one onto the next.
It’s hard to do, but I can imagine if you get it right, this is one of the most powerful factors in multipreneurship
6. Controlled Destiny:
Don't rely on VC whims. Run a profitable business and control your destiny. Prioritize EBITDA, not selling preferred stock!
One of the primary reasons nearly all VC-backed companies fail is that growth is prioritised over absolutely everything. Again, the VC does not want to hold a boring business generating $20k/month in profits on their balance sheet. They want a big sexy $100m+ exit or nothing. Because of this, founders are manipulated to take more money, to grow quicker, with the understanding they can always get to profitability later. Of course, the most likely scenario is you experience a few years of strong growth, then stop growing as quickly, and find it very hard to ever get to meaningful profitability.
Focus on your profit margins, it might be boring, you might not scale at lightspeed and get to a huge validation, but you’ll massively increase your chances of running a nice, boring company that benefits you financially.
7. Personal Growth
Juggling ventures is tough, but it pushes your limits. It's not just financial growth, but personal evolution.
Greg’s American, and has probably drunk a bit more of the Tony Robbins kool-aid than I have, but he definitely has a point here.
I was on a call with a friend of mine KP, last week, I can’t remember what he said exactly but it was something like ‘your business grows as a result of your personal growth, stop deprioritising it.’ While this isn’t true for all businesses, for the vast majority, the slog, the grind and the level of learning and growth you’ll need to succeed mean you really will have to grow as a person to make it.
8. Silicon world
It's not about being in Silicon Valley anymore, the true multipreneur leverages social to go fast.
I think for the VC-backed startups that want to go at 100 miles an hour in one direction for a 1% shot at making a proper dent in the universe, Silicon Valley is still the place to be. OpenAI, Apple, Google etc. couldn’t have been borne from remote teams. I think for the absolute best work to be done, you need the greatest minds in one room working for extended periods on hard problems.
Most of us aren’t trying to make the next Tesla. While I’m grateful to the crazy entrepreneurs who’ve sacrificed everything in their lives for a minuscule shot at shaping the future, I don’t think I’m one of them, and the chances are you aren’t either.
If you’re just looking to make fuck you money, build something cool, and have a good time doing it, being remote makes a lot of sense. If you are remote though, you’ll need to find a way to foster the connections you might be making if you were in Silicon Valley. If you are looking for the 80/20 rule here, it’s Twitter DM’s. I’ve honestly been astounded at the number of cool people I’ve made friends with or had calls with just from messaging them on Twitter!
As entrepreneurs, we often feel compelled to pour our energies into one venture, adhering to the startup narrative of 'focus'. But we should question, does this narrative serve us, or does it serve the venture capitalists betting on us?
Multipreneurship is a refreshing model. It applies a VC mindset to entrepreneurs own businesses. Spread your bets across multiple ventures, ensuring you're not tied to the success or failure of just one.
Multipreneurship is not just about financial security; it's a rich, immersive learning experience. You learn from varied ventures, gain insights from different industries, and develop new skills. It's about fostering connections with creators and communities, using them as your strategic partners in growth. It’s about having fun, being in control of your destiny, and not getting tunnel visioned into the success of one endeavour.
Big Love
Tom