One of the questions I get on a regular basis when talking to other entrepreneurs is “why do you have multiple companies?” In general, I’m against having parallel startups because it takes so much time and energy to make one successful, let alone several. For me, the opportunity presented itself because my first company was in a great spot with a management team that had worked together for several years and complemented each other well. This freed up my time to explore new product ideas to solve problems I had encountered — there were many itches I wanted to scratch.
Here are some pros of having parallel startups:
- Ability to work on wider range of projects and challenges
- Centralized back-office for HR, accounting, and office management
- Shared office space for better economies of scale (e.g. great internet connection, snacks, games, etc), pseudo co-workers, and more
- Increased idea and experience sharing among the startups
- Better likelihood of getting the market timing right, which I believe is one of the most critical elements
- Startup-specific stock option pools
Tomorrow I’ll talk about the cons of having parallel startups, the biggest of which is that without sufficient resources and dedication by team members, a startup won’t make enough progress to become viable. Having parallel startups can work well with the right pieces in place, the most important being either a successful startup with a complete management team or extensive resources to fund the ideas for extended periods of time.
What else? What are some other pros of having parallel startups?