Sequential Small Entrepreneurship

(or Appleseed Capitalism)

Not everyone wants to work for a start-up.

Not everyone wants to work for a well-established company either.

Maybe we shouldn’t expect the same leadership that excels in a start-up to continue to lead their companies as they mature.

Maybe we SHOULD EXPECT that the people with the right stuff to make a start-up successful and the people with the right stuff to shepherd sustainable growth year after year are two entirely different sets of people. Maybe it’s OK for the founding team to start to hand over the reigns after a few years and transition to other new projects. Maybe that should be part of the plan all along.

At the risk of being overly reductionist, there are two types of employees in this world: employees who love the challenge of breaking new ground even if it carries some risk, and employees who just want to keep their head down, do their job as listed, and receive their paycheck. Some people place great value on work that is novel and exciting and some people are more interested in security and predictability. Neither viewpoint is necessarily better and for most companies and individuals alike, there’s probably a time and a season for each.

So let’s embrace the dichotomy between these styles. Rather than thinking of an entrepreneur as someone who has one or two central companies and their subsidiaries and affiliates that they captain for life, the idea of serial entrepreneurship sounds very appealing for anyone who can see themselves getting bored once things settle down into a predictable rhythm. What’s more, if we plan for this and make good use of Ferris’s 4HWW strategies and similar to make the founding team functionally replaceable as quickly as possible, we can absolutely have an orderly and productive transition from an exponential growth startup culture to a long-term growth sustainable business culture. And we can do it with small teams as well as larger ones.

Furthermore, if a group of people is able to successfully launch a small business and place it on a sustainable growth trajectory, that’s a skill set that shouldn’t be left fallow and under-utilized. If you can plant the seeds for one healthy business and then step away, why not do the same for a second and a third? If the people responsible for the first success truly want to improve the world through sustainable capitalism, isn’t the smart move to go about planting as many healthy seeds as you can?

This is where we get to the loaded term I’ve been considering in association with this concept: “Appleseed Capitalism”. It’s got a nice ring that I think would resonate well with the public, but isn’t as descriptive as “Sequential Small Entrepreneurship”. Either way the goal is the same: Focus on churning out healthy sustainable small to medium business one after another every 2-5 years or so.

Think of these small businesses as little economic engines, not get-rich-quick schemes. The point is to grow at whatever pace market forces dictate, and to provide returns for both owners and employees through profit sharing or similar over the long term. Each company stays focused on its niche. There are no demands or expectations of exponential ROI on any timeline. The pace can be set by what’s sensible and what looks like the best choice when ALL stakeholders are considered. Investors will not be able to expect the same level of liquidity or the same best-case growth as the would with a moonshot startup, but instead they’re getting a lower risk small investment with excellent long-term potential and can know that they are contributing to a reformative adjustment of capitalism’s norms rather than contributing to our ongoing socio-economic problems.