This is a post by Clark Benson, I first heard of Clark while doing my daily routine of listening to the great business tips on Mixergy.com. Clark is a serial entrepreneur, currently involved with Ranker.com & was gracious enough to answer a question I had for him in the form of a guest post so everyone could benefit from it. This guy is the real deal, so listen up and you may learn something epic!
Is it ever a good idea to have several irons in the fire?
The answer is – maybe, with reservations.
I do not recommend running 4 businesses at once to anyone, it’s simply too much to both focus on and have some semblance of a life.There are different kinds of businesses – in a very simplified way I would define them as Growth Businesses and Cash Generators. Growth Businesses are ones that you want to build up and potentially sell, or at least build up to a point where they become powerhouses with 100s of employees.
Cash Generators are ones that can generate a steady stream of income but that aren’t likely to be sold and that probably have a finite market (for example, opening up a small café that you don’t really plan to ever duplicate in other locations).
I would never recommend trying to run multiple Growth Businesses at once. You can try to brainstorm or incubate multiple Growth Business ideas at once but as soon as you commit to one (ie start spending money on it or start spending all of your time on it) you should be 100% in. If you aren’t, you shouldn’t be committed to that Growth Business. There are simply far too many things you have to do to make a Growth Business succeed and these kinds of businesses never really have a point where you’ve done all you can – if you find that is the case, and the business isn’t going anywhere, it’s probably time to bail.
Sometimes, however, you need steady income from a Cash Generator to support being able to run a Growth Business. This may just be reality. If you can’t raise outside capital (which is never easy, unless you are well-connected), or if raising outside capital will be a massive time-suck, you may be forced to spend 20-70% of your time on the Cash Generator to pay the bills and support the Growth Business. The classic example of this are when software engineers pay the bills with consulting / development projects to get their internet startup built.
It is possible to run multiple Cash Generators at once. The key is simply to get one up to a point where they run themselves with relatively minimal direct supervision from you, THEN start the next one.
You know those books about how being an entrepreneur allows you to free up control over your time and stop being a slave from the corporate workweek? They are absolute bullshit when it comes to Growth Businesses, unless you happen to have that one-in-a-million idea that is so unique and simple and defensible and “right place right time” that it is just a quick win. If you have that idea, God bless you, but you are crazy if you bank on it. A Growth Business requires all-in commitment.
But you can have total flexibility and control of your life with a Cash Generator, or even multiple Cash Generators, as long as you go all-in to get them to the sustainable level first. And you can certainly have several irons in the fire – either Cash Generators or Growth Businesses – while you are in the exploratory stage, trying to figure out which ones to go for. In this case, Maren, you may be better off since you are female – many experts believe Women Are Better at Multitasking Than Men. But I have 16 years of entrepreneurial experience with businesses on a variety of levels, and I can’t stress enough that once you are sure you are committed to one, you need to focus, focus, focus.
Clark Benson’s latest – and “all-in” Growth Business is Ranker, a site that makes it easy, fun, and social for people to make and share lists – about whatever their interests or passions may be. Ranker launched less than a year ago and is already up to over 600K monthly unique visitors, with traffic growing rapidly from social media and SEO.
Ranker’s technology adds images and data so that you can express your opinion in list form in 5-10 minutes and publish a list on Ranker that you can link back to or embed on your blog (example: a blog about Famous Black Inventors just posted an informative list yesterday). You can also add your opinion to a Community List such as The Best Movies Of All Time and see how your opinions stack up to the crowd. With both aggregated “wisdom of crowds” lists and thousands of lists by both individuals and expert sources for topics like College Rankings, Ranker has already become THE source for the best top 10 lists on the web. Benson also has a 16 year old “Cash Generator” Almighty Music Marketing that his partner Joel Oberstein runs. AMM provides a number of marketing programs to the music industry, most recently a weekly email player showcasing new music releases.