The Science And Psychology Behind What Drives Serial Entrepreneurs

By some counts, serial entrepreneurs are responsible for a third of all new businesses. Clemson management professor Wayne Stewart has studied their hearts and minds.

The Science And Psychology Behind What Drives Serial Entrepreneurs
[Image: Flickr user Nuruzzaman Babu]

Ask any entrepreneur how much blood, sweat, tears (and soul) they’ve put into their startup, and you’d get an imprecise answer at best. The long hours, the lack of resources, the simultaneous product and customer-network building–not to mention fundraising–often make the venture a one-time enterprise.


For some, the slip into a steady gig feels less like success and more like a life sentence. They prefer to exit stage left and start all over again. You could chalk it up to them being driven by the “not enough” trap or the restless by-product of too much fragmentation and a dearth of even five minutes of stillness in our current business culture. But you’d only be partially correct.

Turns out that while the mind of the entrepreneur has been carefully picked by scientists who discovered they do think differently than managers, serial entrepreneurs haven’t been under such close scrutiny.

That surprises Wayne Stewart, associate professor of management at Clemson University. Stewart’s research shows that habitual entrepreneurs have been around since the beginning of the Industrial Revolution (any time between 1780 to 1840, depending on who you ask), and they are a noteworthy group.

“We’ve seen some evidence that one-third of all ventures are initiated by serial entrepreneurs,” he tells Fast Company, “And that those ventures have higher growth.” Think: Dustin Moskovitz who founder-hopped his way from Facebook to Asana; Amit Kleinberger of Menchie’s, and veteran of three startup-to-IPO ventures Phil Fernandez of Marketo.



Three things, says Stewart. Simply put:

They are more driven by success, more likely to take course of action that is uncertain, and to do something unproven.

Starting multiple ventures flexes these founders’ risk taking, achievement, and innovation muscles. Though men scored higher than women on the risk-taking trait, both genders had an equal drive to innovate and achieve, Stewart’s research found.


In addition to these three common characteristics, Stewart says serial entrepreneurs tend to have a pretty tight focus on creating wealth and developing personally along with their idea for a product or service. But they may also be restless.

“If you are going to end one venture and go to another, you’re [probably] bored once you are into a daily decision-making managerial role,” says Stewart.


Serial entrepreneurs may also have the itch to keep honing their ideas, he says. “Some research suggests entrepreneurs refine their vision with experience,” explains Stewart. Like Twitter’s Jack Dorsey (which evolved from Odeo podcasting to Twttr) the founder may be working on a business and doing ok but the experience offers them a way to see how their original idea can be chiseled (or pivoted entirely) and turned into a whole new business.


Another piece of the psychological puzzle of serial entrepreneurs that’s not been investigated yet is failure. Fast or slow, failure often pocks startups’ first years. How to deal with a setback may be unique to serial entrepreneurs.

When we talk about subject of failure, what we don’t do [is talk about] how individuals respond. I suspect serial entrepreneurs are much more tolerant of failure. They have a much more rugged sense of self. They are more likely to pick themselves up, dust themselves off and say: I’ve learned this, I’m still capable, so I’m going to go at it again.

Stewart’s working on a paper right now on a theme that’s intimately tied to trip-ups: core self evaluation. He describes it as a mental combo pack that pulls together how the individual sees themselves and their ability to handle different circumstances and their sense of internal control (or belief in fate) over what happens. Those who have a higher self concept, says Stewart, generally tend to be more aggressive.

His hunch–which he’s quick to point out is currently just a general working hypothesis–is that serial entrepreneurs have tougher skins than one-time founders. In the real world, multiple-venture founders such as Redbubble’s Martin Hosking are channeling their energy from previous catastrophes into successful new enterprises.



A study released last month from the University of Western Ontario suggests that serial entrepreneurs aren’t always able to turn those lessons into successively better ventures. Following Americans who founded more than one venture over the course of up to 25 years, author Simon C. Parker found that the entrepreneurs’ performance didn’t improve in subsequent startups.

The findings show that serial entrepreneurs obtain temporary benefits from spells of venturing which eventually die away. This implies that venturing generates benefits that spill over from one venture into subsequent ones, and it can provide a rationale for public policies that encourage re-entries by entrepreneurs, even if those entrepreneurs performed poorly in their first ventures.

Setbacks are inevitable, whether this is the founder’s second company or sixteenth. Stewart believes that serial entrepreneurs may have a better innate ability to quiet the negative thoughts that might plague a less resilient soul with self doubt.

There are ways in which serial entrepreneurs tend to think about their belief in their ability to handle the startup, their belief of the desirability of the venture, launching, and making it successful. These belief systems are informed by experience. To the degree that they come back to those fundamental traits, serial entrepreneurs are more psychologically durable.

What do you think it takes to be a serial entrepreneur? Share your thoughts in the comments below.

About the author

Lydia Dishman is a reporter writing about the intersection of tech, leadership, and innovation. She is a regular contributor to Fast Company and has written for CBS Moneywatch, Fortune, The Guardian, Popular Science, and the New York Times, among others.