After experiencing some early success as an entrepreneur, I started investing in other ventures/sectors, hoping to leverage some of my newly-earned capital. It was the ‘smart’ thing to do, or so I was told.
I invested in various industries, despite having little to no experience in them. I fooled myself into thinking I was bright enough to understand these other ventures and sectors after a couple meetings and a day or two of ‘due diligence.’
It sounds ridiculous in hindsight, of course. But…
In a way, entrepreneurship became more about having my fingers in many different pies than it was about building within my area of expertise. It was a weird phase I went through, and a costly one, but I wasn’t alone in this cavalier entrepreneurial behaviour.
Over the years, I’ve seen it happen with many entrepreneurs who achieved a big win. They became seemingly desperate to expand into other businesses/industries, instead of building on what they had success with (and within). Many of us are encouraged to do it so to avoid having all our eggs in one basket — despite that basket (our business and industry) being our personal breadbasket.
It’s a great line from a friend of mine – a truly innovative entrepreneur in his own right.
What does it mean?
The odds of failure decrease dramatically for an entrepreneur when he is obsessed and focused on one business and sector. However, when he stretches into various industries and enterprises, run by other people who are not within his sphere of influence, the odds of failure/loss increase…
This isn’t to say you, the entrepreneur, shouldn’t invest in other ventures, but you must be disciplined enough to stick to what you know. Strangely, conventional wisdom encourages the exact opposite.
What makes this discipline so challenging after successfully building a great business or exiting a company you founded, is that you will be inundated with offers, opportunities, and tempting ventures outside of your area of expertise.
Whether we want to admit it or not, when we have a pocket full of discretionary cash to put to work, the FOMO of a bright new idea/startup is powerful.
My advice, which has been bought and paid for, is simple…
I think you should absolutely parlay capital from your own business success into other ventures. But stay in your lane. You know your industry. You’re a success story within your niche. Why stray outside of that space?
Invest in other entrepreneurs within your industry. This is valuable for two key reasons:
PS – Entrepreneurship can be a bit of a maze sometimes. Let me share my best insights with you. Subscribe to my newsletter below.