Thread by @dunkhippo33

Today I want to talk about the portfolio construction of an entrepreneur’s career.

What is it? What does it matter?

Some thoughts >>

1) When I was growing up in Silicon Valley in the 90s, I noticed a lot of entrepreneurs would have 1 company and that would be that - especially if you were successful.

The general sentiment was that doing a startup was exhausting so you should make yours count.

2) But that sentiment started to shift in the 00s & has shifted in the last 5-10 years dramatically.

Entrepreneurship is now a way of life. Once an founder, always a founder.

You may need to make $$ between shuttered ventures but a lot of entrepreneurs get back at it.

3) In fact, you now see ppl leave VC to become entrepreneurs.

Before, VC was the place you retired before you actually retired. Now you see people moving in and out all the time between founder to investor and back.

4) I think part of this shift is due to a few things:
-faster failures

-rise of acceptability in becoming an entrepreneur

-bigger outcomes / entrepreneurs own their own destiny a lot more now than decades ago

-better safety nets (can take $$ off the table at the series A)

5) So if you know you’re going to be an entrepreneur for life, how should you play it?

Maybe you have 30+ solid working yrs as an entrepreneur (depending on when you start and how long you live).

6) And instead of putting a lot of pressure on any one given idea, think about your career as a portfolio.

7) Your average home run company takes 10-15 yrs to scale. But most companies that don’t get off the ground are abandoned within 1-3 years.

Realistically you probably have 5-10 at bats in your career depending on the order of operations and what is working / not working

8) 5-10 at bats is still risky and sounds like a small portfolio size, because a typical VC portfolio has at least 10 companies on the low end.

But there are some things that are less risky for an entrepreneur than for a VC.

9) Namely, your past swings are learning moments that affect your future swings. And hopefully your swings get better over time.

This is not something you get as a VC because investors don’t run companies.

10) So you may not need a large portfolio to mitigate downside risk like a VC needs.

What will you learn along the way? How to:
-size up business opportunities better
-hire well
-talk with and get customers
-create good products or services
-communicate well
-etc

11) You should feel like you are getting better in all of these areas.

And if you don’t, then you should figure out what you’re still struggling w and find other ppl to plug in gaps

12) An example of this is that I realized I’m not very good at socializing / networking which is pretty critical for most entrepreneurial roles, but my business partners fill that gap, as they do this really well

13) I’ve talked more about my learnings from venture to venture here:

https://twitter.com/dunkhippo33/status/1327001073769345029

14) Furthermore if you think about entrepreneurship as a career rather than a one and done, you behave differently in the ecosystem.

Ppl who reject you now may be future partners. Ppl whom you hire today may acquire your company tmrw.

Having a long term mindset is impt.

15) In addition, entrepreneurs often ruin their health in doing a startup. But you need to be healthy & be able to execute quickly for the next 30+ yrs. You can’t get destroyed in the first 3.

So what you do differently if you knew you were starting companies for 30 yrs?

16) And if the thought of doing a startup doesn’t excite you for the next 30 yrs, then you’re probably doing something wrong / something unsustainable w how you’re working on your current venture.

17) Opportunity costs are real. By thinking in 30 yrs, you have to understand that by doing one opportunity now it means you are not doing anything else. Choose your idea wisely. It’s ok to wind down ideas that don’t have product market fit.

18) To be fair, there’s always the question of do I continue to try to find pmfit with what I’m currently doing? Or move onto something new?

No right or wrong answers but I discuss this here:

https://twitter.com/dunkhippo33/status/1415077655557283840

19) But whatever you decide, I think it’s helpful to think that you “only” have 30 solid yrs to build your career portfolio, so is this how I want to spend my time? Or should we move on to another idea?

20) Statistically speaking, any one startup that you’ll do is likely to fail, but if you have a career portfolio, you increase your odds of success of one of them working out on some level - esp if you are learning a lot & carry over those learnings from one venture to the next.

21) Lastly, 30 years is an interesting timeframe because it’s long enough to tackle big things but also short enough that you have to pick your portfolio of companies wisely.