Running two startups simultaneously

I'm 24 and I started an ecommerce web marketing business about two years ago. I finally have enough cash flow to hire someone and accelerate growth. I'm also a mobile developer. At this point, development is more of a hobby than a startup. I have a few apps out there, but they do not produce nearly as much revenue as my web marketing business.

In both businesses, I've partnered with different companies and formed revenue share agreements. Investing my labor and getting a "piece of the pie" is a lot more intriguing and exciting to me than straight contractual work.

Although my web marketing business is more mature than my mobile development endeavors, I'm much more interested and passionate for development. I have a solid network for future opportunities in both businesses.

Is it a bad idea to try to grow both businesses simultaneously?

Well, it depends on which definition of "startup" you have. :)

Perhaps these companies are smaller operations, which are mostly about you having a good time and learning a lot. In that case, as long as you don't over-promise to your partners and business associates, then no problem.

However, what I most likely think of when I hear the term "startup" is what Steven Blank defines as a "Scalable Startup" : "A scalable startup is designed by intent from day one to become a large company". If you try to run two Scalable Startups at the same time, then you're crazy. Running just one Scalable Startup is bordering on too much work for a human, two at the same time is ludicrous. And additionally, should you want to add outside investors they wouldn't permit this -- they would insist on you using all your creative energy on the company they invest in.

Is it a bad idea to try to grow both businesses simultaneously?

That depends on what your goals are. But it's likely to (likely, not guaranteed to) result in lower total wealth creation. All other things being equal, having your attention on two business models at the same time lowers your impact.

There is nothing wrong in what you're doing. You're working, earning a decent living, learning new and cool stuff AND enjoying it all! Few people can claim that, so good job! If you are ambitious, then I would suggest keep an eye for something that might be a "big" business. Know that you might have to stop doing what you are doing to pursue that. Keep your lifestyle reasonable where you might have the financial freedom to pursue it at a later date. Balance that out with "life is too short, enjoy it " and you're good to go

A personal note - I tried two "scalable startups" in a CEO role. While I knew I'd have to pick sides a few months down the road, but even during that time, it was nuts!! "Thankfully" Qualcomm came out with a very different technology for same application we were targeting. I was confident they would leapfrog us in a generation(about 12 months) because their method was fundamentally different/simple. So we decided to shut that shop. Incidentally, Qualcomm's next revision WAS a leap ahead of us, so it was a good decision to terminate in hindsight.

One scalable startup is what I'll do from now on. It's what I'd recommend even if you can work 18 hour days for 90 days and even if you're brilliant. Only way to manage multiple scalable startup is IF you have the cashflow to HIRE quality people under yourself (to effectively scale YOURSELF up). As a senior employee that's still easy. As a CEO/Founder, it's very very hard.

Where you mentioned being "more interested and passionate for development" swayed me. I would definitely run both simultaneously if you're finding your interest lies more on the mobile side of things.

A few things could happen:

1) The mobile side languishes, and you lose interest, where you'd still have your other business.

2) The mobile side takes off, and you can sell your web marketing business.

3) Neither takes off, but you're still enjoying yourself because you're doing something you find interesting.

I don't see a lot of downsides with any of those options.

It's tough to be focused on two things at once. So if you're going to focus on the mobile side, you really should make sure to find someone that can take your place on the web marketing business. I've been working on that for the past six months and it. is. awesome. to find a great replacement. This has allowed me to still focus on the business, but now I can focus on growth instead of day-to-day ops.

While money can be a factor, most entrepreneurs I know (including myself) start a company because they really believe in something and are willing to go through great lengths of achieving that. Being an entrepreneur usually involves working for many hours a day but always in having heart for your product. There's no better explanation for this than the book 'What They Don't Teach You At Harvard Business School' by McCormack.

If you start 2 companies, you have to split your attention. Sure, you can hire someone, but he just doesn't have the same heart and respect for the company as you have. If you decide otherwise, you will most likely end up being an angel investor in one of the companies you once started... which is of course something you can also do right from the start. Considering the outlook and the different options, why would you start 2 companies in the first place?

Which is why I simply wouldn't. Starting a company and growing it usually requires way more time and money than you originally estimated - and in my experience, splitting your attention just makes things worse for both companies... There are good reasons why every book on startups tell you the number one error you can make is lack of focus -- starting two companies is exactly that.