UK: SME - Serial entrepreneurs.

UK: SME - Serial entrepreneurs. - For most of us, the idea of starting a business from scratch is a daunting prospect - for some, however, the thrill of it is something to be enjoyed again and again.

by Roger Cowe.
Last Updated: 31 Aug 2010

For most of us, the idea of starting a business from scratch is a daunting prospect - for some, however, the thrill of it is something to be enjoyed again and again.

Some people just can't stop launching new ventures. While many executives are probably terrified at the thought of striking out on their own, there is a special breed that is happy doing it not once, but over and over again. They have been dubbed 'serial entrepreneurs', a little unfortunately given that the adjective is more usually attached to adulterers and killers.

They are not just money men buying into a good idea but ideas people who enjoy the thrill of building something up from scratch. They have thrived in an increasingly favourable tax climate and, having made their millions, many are now moving on to becoming venture capitalists themselves, helping up-and-coming businesses.

The breed is typified by the exuberant Chris Evans - not the media star but the scientist son of a Port Talbot steelworker, who has made a mint starting up biotech businesses Celsis and Chiroscience and taking them public. Not content with that, Evans has since moved into car security technology with Toad, and founded a seed capital company, Merlin Ventures, which is investing in a wide range of small businesses. 'I'm at saturation point,' he announced last year, but that has not stopped him heading up an EU representative group, at the behest of Tony Blair, which is looking at the ways in which legislation should meet the needs of small and medium-sized businesses.

Home computer guru Herman Hauser is another of these serial entrepreneurs.

A co-founder of Acorn computers, he has been involved in the start-ups of at least 37 other businesses in Cambridge's Silicon Fen and is now taking the notion a step further with the Amadeus Fund, a £50-million venture capital operation, which aims to back the high-tech initiatives of self-starters like himself and Evans.

The high-tech industry and the very different but equally volatile pub sector seem to be particularly fertile ground for entrepreneurs who can't give up. Technology addicts include Cliff Stanford of Demon Internet and Peter Dawe (see box, page 93). Pub founders include Hugh Corbett, now running Tup Inns after selling Slug & Lettuce and Harvey Floorbangers, as well as the founder of the Firkin chain, David Bruce, and Michael Cannon, who refused to go away after Devenish was acquired from under him.

Serial entrepreneurs are over-represented in these industries for very good reasons, says John Bates, director of the Foundation for Entrepreneurial Management at London Business School. 'It happens in any industry where there is change,' he says. 'What creates opportunity is change - technological, sociological, demographic or legal. Entrepreneurs also thrive on discontinuity and that is particularly evident in electronics, bioscience, and retailing.'

Surprisingly, Bates argues that serial entrepreneurs are less unusual than people might imagine. 'One thing we know about entrepreneurship is that it is actually not that different from what makes corporate executives successful.' He draws a parallel between those who set up one business after another and company doctors who roam big corporations turning round failing units and launching new ventures. While operating in different worlds, these fixers share common characteristics, notably leadership skills aplenty.

'They tend to be the starters - people who are extremely good in the early stages of a business, less so at the maintenance work,' Bates says.

'They are brilliant at leading from the front and not so good at being in the background making sure the machinery works. They are people who are on the arrow-point going forward.' While the caricature of the entrepreneur depicts them as loners unable to fit into big business requirements, Bates insists this is not the case. He says they are actually very good at creating teams, and need partners who keep things ticking over smoothly. 'They tend to be the lead person in the team, very good at transmitting the vision, especially a vision of something that doesn't yet exist. But there is often a partner, implied or otherwise. They tend to be very strong personalities but the smart ones build a team and then the team can move on from one venture to another.' Richard Branson is a classic example.

Pub entrepreneur Hugh Corbett says the team is partly what keeps him going. 'It's good to bring people on, to give an assistant manager a chance in a small pub,' he says. 'My managers are in their twenties and they keep pushing me, keep coming up with ideas. It's great to have people around you like that.' Corbett is clearly one entrepreneur who would not be happy in bureaucracy. 'I'm not good at sitting behind a desk - in fact I don't have one. I tried working in an office but it was like being in school, sitting, gazing out of the window.'

Corbett's early career history is very different from the mould. Bates says entrepreneurs typically get hooked as a result of early profit responsibility.

This gives them the 'high' of running their own business even while working for somebody else. But Corbett, like Peter Dawe, did not start down the path to serial entrepreneurship in this way. The boss of Tup Inns has been a landlord of one kind or another for 30 years but his working life began as a cog in an accountant's office. 'I hated it. I gave up after 18 months,' he recalls.

His journey to the world of pubs only began seriously when he got a job as a waiter and finally found something he enjoyed. That eventually led to buying his own hotel and, from there, to founding the Slug & Lettuce pub chain - pubs that broke the mould in the early 1980s by being bright and airy, with good food.

Most people would have gained satisfaction enough from building that chain and converting an investment of under £30,000 into more than £2 million in just a few years. If they were to sell out and leave the business, like Corbett, they would probably not choose to go through the pain of doing it all again - twice. Corbett and serial entrepreneurs like him seem to enjoy the nightmare of not knowing whether it will work. They are like gamblers who must bet but are not intrinsically interested in the winnings.

While money does matter - and protestations to the contrary must be taken with a pinch of salt - it matters only up to a point. Corbett says he somehow lost all of the £1 million or so he personally extracted from the Slug & Lettuce deal, which explains why he couldn't just walk off into the sunset. He admits he does not want to be poor. 'I like to have enough in my back pocket to go out and have a good lunch. But,' he says, 'you can only eat and drink so much and you can only wear so many clothes.' Cashing in some of his chips was the main reason behind the sale of Harvey Floorbangers but avoiding boredom has always been his main motivation.

Money becomes a mere measure of performance or status, just as some executives gauge their standing by their company car, says Bates. 'Serial entrepreneurs are motivated by money as a scorecard, as an indicator of the value they have added.' He points out the apparent impossibility of the idea. 'If you did a net present value calculation of setting up your own business say at the age of 32, it would be hopeless because of the risk,' he says.

'It's the most bonkers thing you could do in your entire life.'

Yet more and more people are doing this bonkers thing, over and over again. One way or another, they are all trying to prove something - their innate ability, the value of their ideas, the idiocy of partners who have ditched them or, as Chris Evans has admitted, sheer megalomania - the desire to be 'in control'.

Advisers to people such as Evans say the serial entrepreneur is a special person but, they admit, there is always an element of them being in the right place at the right time. David Wilkinson, head of entrepreneurial services at accountants Ernst & Young, says his clients tend to be people who are most comfortable in dynamic, informal environments. Unlike people who set up one business and stick with it, they don't have the possessiveness of the single-business entrepreneur. 'They are people who are not particularly good in a systems-based, complicated management structure. They are more autocratic in their approach and they are used to having a hands-on role.

But they don't have the sense of possessiveness of some entrepreneurs - the "this is my baby" attitude to life,' he says.

The idea of setting up one business after another is a relatively new phenomenon. Jim McMahon, head of entrepreneurial services at PricewaterhouseCoopers, said it is a 1990s thing, which stems from the changes of the 1980s. 'Previously, people who made money bought a big estate and gave up business. But, during the '80s, business became sexier. Being an entrepreneur was something that could be aspired to,' he says.

If being a serial entrepreneur is trendy, then it is a fashion that might die with the recession forecast in the next couple of years. Yet, given the serial entrepreneur's temperament, it is more likely that the successful ones will use a recession to snap up weakened companies and add even more strings to their bows.


Children of businessmen

Some seem to be imbued with business thinking from an early age, which eventually emerges even if they don't set up their own business at a tender age

A will to win

These are the children who are determined to win the football match or the egg and spoon race rather than just have fun

Love of responsibility

They will show no fear when asked to take on daunting tasks or responsibility for performance

A need to be in control

They don't like being at other people's beck and call, having to argue and lobby to get their way

Leadership skills

The ability to build a team, even though they are determined to be its leader


These are the people who know everyone worth knowing in their industry, and make sure they are known by those key people as well

A background in a volatile industry

Experience of rapid change and successfully dealing with it is important

Early success

Leaving them with financial independence at a relatively early age

A track record

Which will give confidence to venture capitalists and others who might put money in the next enterprise


'I want to change the world,' says Peter Dawe. 'It's my way of getting life after death, if not immortality.' Dawe is a high-tech entrepreneur who made a fortune from the internet and has since spawned a series of other enterprises. His current businesses span media and telecommunications and, in case that isn't enough of a challenge, he is trying to build a new Cambridge - right next to the old one - as a radical solution to its much-debated growth problems.

His entrepreneurial flair comes from his father, he says, who was a newsagent.

But the shopkeeper's spirit lay dormant in young Dawe for quite a while.

He took a 'numbers degree', in statistics, maths and computing, and embarked on an suitably appropriate career as a local government accountant.

Local government is hardly the most obvious starting point for an entrepreneur and that was even more the case in the late 1970s. Dawe's transformation began with a move into management services, which led to his installing some of the first desktop computers. His expertise attracted the supplier, Cambridge Micro Computers, who offered him a job, completing his transition from the ordered world of accounting and bureaucracy to the uncertainty of a dynamic small business.

With the growth of computer networking in the mid-1980s, Dawe decided to strike out on his own. In 1986, he founded Unipalm, which specialised in linking different computers together, and this in turn led to the internet.

Unipalm Pipex brought a commercial internet service to the UK for the first time in the early 1990s and the business has really taken off with the growth in internet use as the decade has progressed. Unipalm floated on the stock market in March 1994 but Dawe left two years later, after selling his stake.

He is very proud of his record at Unipalm and clearly still a little sad at leaving it all behind. 'It was inevitable that I left. Nine years of a white knuckle ride takes its toll and I needed to take six months off,' he explains. 'Apart from which, after a takeover, the new management has to establish a pecking order and trash the old managing director.' He made £36 million from the deal, quite enough to finance the rest of his life soaking up the sun in the Bahamas. But he was only 42 and you don't change the world sitting by a swimming pool, even with a mobile phone and a laptop computer linked to the internet.

'There were plenty of other things I wanted to achieve,' he says. 'Anyway, what I'm doing now, I define as a hobby. I can disappear to the Bahamas any time. And if I don't like something, I can just walk away - which I have done with some of the non-executive directorships I've had.' His 'hobby', as he puts it, occupies his time between 9 and 6, four days a week, 40 weeks a year. He claims he was always more in control of his work than many entrepreneurs, but admits that, while he might physically have been at home during weekends, his mind would usually still be in the office.

Like most of his breed, he says he is not motivated by money, quoting a possibly apocryphal US businessman who apparently said: 'The only difference between $5 million and $50 million is that, with $5 million, you can do what the heck you like. With $50 million, you can do it in a jet.' Yet, adds Dawe ruefully, with $500 million, you can go into politics, a calling he is obviously enamoured with. He recognises that he would always find it difficult to give up business. 'I can't be bothered to argue with people.

It's easier just to found a new business and go and do it yourself,' he says. 'I find it easier to change the world when I am in control. I cannot foresee stopping being active, although the sorts of things I do might change.'.

Find this article useful?

Get more great articles like this in your inbox every lunchtime