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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?

What are the six most profitable words of all time? Answer: do you want fries with that? In a reverse fashion, every entrepreneur should know the four best money saving words: what’s your best price? Most items are negotiable and you won’t get a discount unless you ask.

Cash is one of the top three responsibilities of a CEO (along with setting vision and getting the right people on the bus). It’s in this regard that the CEO needs to set the tone that getting a competitive price from suppliers is a core requirement. Everyone in the startup should have “what’s your best price” on their lips when talking to vendors.

Now, when doing pricing for our products I’m a big proponent of fixed prices with no negotiating. This strategy ensures pricing integrity across customers, reduced sales cycles, and increased customer trust. It works particularly well with Software-as-a-Service products. But, most of the world works with negotiable pricing and “what’s your best price” should be asked in every engagement.

What else? What do you think of using “what’s your best price” when negotiating?

After talking with hundreds of entrepreneurs in the Entrepreneurs’ Organization and the community, one of the more repeated themes that comes up is the search for recurring revenue. The pattern is as follows: entrepreneur follows his/her passion, startup gets some traction after two or three years, revenue is lumpy, school of hard knocks teaches entrepreneur that inconsistent revenue is extra challenging, and finally entrepreneur starts searching for recurring revenue. Numerous entrepreneurs have brought this up to me.

Here are some reasons why recurring revenue is desirable:

• Allows for more consistent cash flow
• Makes it easier to plan and forecast
• Provides for better sleep at night knowing payroll will be met (assuming break even or profitable)
• Enables easier year-over-year growth since the recurring revenue layers on top each year (assuming low churn)
• Values a company more substantially, all things being equal, to a similar revenue and profitability company that isn’t recurring

Recurring revenue is often more difficult to get going as the customer is financed over a period of time vs paying a lump sum up-front. In general, a recurring revenue business is the way to go, but much harder to achieve. The search for recurring revenue continues.

What else? Have you talked to entrepreneurs searching for a recurring revenue business?