First published in the Sunday Times on 9th August 2015.
For a founder, running a business is not the same as any other job. It is likely to be an all-consuming passion, a whirlwind, an obsession, and a high-stakes gamble. It is more than just their work and their fortune — it is their identity and their life’s purpose. So when they sell, it can be devastating — but also sometimes a great release, after the years of stress and responsibility.
Yet once entrepreneurs have sold out, what do they do? For some, it will have been the first time they have really made money. So they go ahead and buy the presents they promised themselves as a reward for all the toil — a bigger house, a ski chalet, a boat. They travel the world. One-shot founders feel no need to prove themselves a second time; they do not long for the status or challenges.
But many get bored quickly, missing the sense of adventure and meaning that building a company gave them. And some suffer chronic seller’s remorse, describing the emotion after their exit as almost like mourning. So they hear the siren song, return to the fray and become serial entrepreneurs. They have experience, a track record, contacts, confidence and cash, which all help them do it again.
An example is Marcia Kilgore, the creator of spa chain Bliss, who subsequently started the beauty products business Soap & Glory and trendy sandals supplier Fitflop. Others become what might be termed portfolio entrepreneurs, who own several companies simultaneously — Sir Richard Branson being the most famous example.
Those who hunger for repeat wins are sought-after by financial backers — they know that seasoned management are more likely to succeed than novices. Research by private bank Coutts suggests 54% of owner-managers set up a second venture after selling their first, while only 27% retire completely. To me this makes sense; the rush of business ownership is not easily replaced by a life of leisure. James Averdieck, founder of the dessert company Gü, said after selling for £29m in 2010: “I created a bit of a void. It was my life. It’s nice making money but it’s great to build something and I felt a bit flat.”
Some evidence suggests serial entrepreneurs are responsible for one third of all successful ventures. But certain backers worry that the second or third time around, founders are not as hungry. Age takes its toll in terms of energy, and typically people become more set in their ways as they get older — and thus less likely to create a radical breakthrough business.
Certain entrepreneurs pursue a different career altogether. A remarkable switch has been the reinvention of Michael Green, former boss of Carlton Communications. I knew him when I was an analyst in the 1980s and he was an all-conquering, hard-driving media mogul. He is now a psychotherapist with a practice in Mayfair — and an improved sense of humour.
Another entrepreneur who transformed his enthusiasms is Peter Kindersley, the co-founder of Dorling Kindersley. After disposing of his illustrated books business to Pearson in 2000, he turned to the land and now owns Sheepdrove organic farm. He also bought Neal’s Yard Remedies in 2005. Both are causes he believes in strongly.
Few will ever match the remarkable career of John Freeman, another media chief. It is wonderfully described in a new biography, A Very Private Celebrity, by Hugh Purcell. He explains how Freeman served as an army officer, a Labour MP, a pioneering TV interviewer, editor of New Statesman magazine, ambassador to Washington, chairman of London Weekend Television and ITN, and a university professor of politics in California. To have such a diverse life you need to be brilliant, lucky, never look back, start young and keep going. His glittering progression should act as a reminder to us all: never allow yourself to be pigeon-holed.
Of course, some entrepreneurs never give up their original business. Sumner Redstone, the 91-year-old chairman of National Amusements, CBS and Viacom, said in an interview last year: “I will not discuss succession. You know why? I’m not going to die.” I think delusions about their mortality are not uncommon among founders, who all too often imagine they possess superhuman traits. Unfortunately, some entrepreneurs refuse to surrender control until they are forced to step down. Abdication in such circumstances can be especially traumatic, and typically leads to an unhappy retirement.
Certain admirable entrepreneurs devote their lives to philanthropy once they have made it; Bill Gates is the most impressive example of our era. He has encouraged others, such as Warren Buffett, to give away their fortunes, too, and to do so wisely. He follows in the footsteps of the steel magnate Andrew Carnegie, perhaps the wealthiest man in the world in 1901. Carnegie spent the final 19 years of his life giving away 90% of his money, saying: “The man who dies rich, dies disgraced.”