The Ups and Downs of Serial Entrepreneurs

Henry Thorne had invented a great machine. A robot that did what you wanted it to. You drag a mouse across a computer screen, the robot drags a vacuum or mop across the floor. The Cye, as he dubbed it, was the “Macintosh of Robots.” Wired magazine said so. So did the New York Times, Time and Esquire. Henry Thorne was a genius and was going to be a very rich man.

Problem was, no one wanted his great machine. He sold 300 of them, at $799 a pop, in the late 1990s. In entrepreneurial terms, Thorne had come up with a great solution to a problem that no one had. Thorne eventually decided building a robot no one wanted wasn’t such a great idea after all. Back to the drawing board.

Fast forward a decade. Thorne has helped create another great machine, he thinks. It’s a stroller that folds up on its own, using a simple package of robotic technologies. It could save parents from having to contort themselves into yogic poses to get the stroller, kids and groceries into the minivan. A problem lots of people have, a solution anyone can use. He’s hoping to launch it later this year under the banner of Thorley Industries, the Strip-based company he co-founded.

What happened between Cye and the powerfolding stroller?

“I learned I needed to spend a whole lot more time listening to customers figuring out what they were willing to pay for,” says Thorne.

Won't You Be My Neighbor?

Thorley is Thorne’s sixth company and that makes him a serial entrepreneur. Despite their linguistic association with Jack the Ripper, Jeffrey Dahmer or Hannibal Lecter, serial entrepreneurs are actually good to have in your neighborhood. They’re starting to pop up more and more in Pittsburgh, as a generation of inventors, entrepreneurs, and all-around risk takers that sprang up after the demise of Big Steel have taken the reins on their third, fourth, or sixth businesses.

That’s good for the local high tech climate, says Steven Zylstra, CEO of the Pittsburgh Technology Council. “You really start to come into your own as a region when you have people who have done it multiple times,” he says. Part of what makes Silicon Valley and other tech hotspots fertile grounds for innovation is their group of serial entrepreneurs who keep looking to start the next HP, Microsoft, or Google. Granted, they’re more likely to create the next dating website for dogs. But those in high tech say you’ve got to play to win, and there are more and more players in the game in Pittsburgh than ever before. Zylstra said he’s noticed a move away from a traditional reliance on big companies to move the local economy. “It used to be that we had all these large corporations that employed everyone. Parents dissuaded children from starting their own business because it just seemed nutty.”

Investors generally like serial entrepreneurs, even if their past efforts have come up short.

School of Hard Knocks

“There’s nothing wrong with having been in that seat and having failed,” says Catherine Mott, managing partner of BlueTree Allied Angels, the Pine-based venture capital firm. Mott’s company has provided startup capital to about a dozen local companies, about half started by a serial entrepreneur. Mott says these folks are much more equipped to deal with the obstacles startups face than a first timer. “(A startup) never goes according to plan. A wide-eyed entrepreneur going about this for the first time, they typically realize they’re not going to meet their numbers, the product is not perfected to the point where they expected it to be, and everything kind of falls apart.”

What’s important, Thorne and others say, is that with each company they start, they are learning valuable lessons to carry over to the next company they form. If at first you don’t succeed, try again like, six times.

Most first time entrepreneurs simply can’t appreciate how bumpy a ride start-up life can be, says John Shearer, CEO of Powercast, the Ligonier start-up he founded in 2003 that makes wire-free power source technology. New entrepreneurs tend to have fixed expectations of how well the company will function and who will make the decisions. It’s a recipe for disaster, Shearer says.

“Trying to do it all yourself, have all this control, trying to control who’s involved from an investment standpoint, is very naïve,” says Shearer. “You find out the more you learn, the more you don’t know.”

Sam Leinhardt, who’s on his fifth startup, puts it this way: “Serial entrepreneurs are masochists. We just get pleasure out of punishing ourselves,” says the CEO and President of Penthera, the mobile video technology company he co-founded and runs out of a re-modeled horse stable in the Strip. “With a small company, the downs can be catastrophic. If you have one or two customers and one of them disappears, you’ve lost 50 percent of your revenue. So many things can derail you. Odd things. Stupid things. (Investors) want to see people with welts on their body showing they’ve been through it before.”

Given the wear and tear typical of start-ups, why can’t these folks just start a nice company, settle down, and live happily ever after?

“There’s a real adrenaline rush that comes from taking an idea and bringing it into fruition,” says Mary Del Brady, CEO of RedPath Integrated Pathology, the Strip-based company that makes molecular-based tools for diagnosing cancer. Del Brady first started working in a start-up when she was 24. Now, 25 years later, she’s on her fifth start-up. In between, she’s worked for big health care organizations and has come back to the excitement of starting a company from scratch. It’s not for the faint of heart, she says.

“You have to really enjoy chaos. You have to be able to bring order out of chaos. Do I like chaos? No. But if I see the promise of something and know I have the skill set to make that happen, then that’s something I really enjoy.”