In this solo talk, Dharmesh Shah reflects on his biggest entrepreneurial mistake: attempting to run two startups at the same time. He recounts how his first company, started at age 24, was thriving—cash‑flow positive, profitable, and repeatedly featured on the Inc. 500 list—when he launched a second venture without fully resolving the first. Shah outlines five concrete reasons why founders should not split their focus across multiple startups: (1) the inherent difficulty and low odds of success for any startup are amplified by divided attention; (2) the original team feels abandoned, while the new team perceives a lack of full commitment; (3) mastering distinct industries and building domain expertise simultaneously is nearly impossible; (4) evaluating whether a failure is due to a weak idea or diluted focus becomes impossible when juggling two ventures; and (5) investors will almost never fund a founder leading two companies, forcing a choice and complicating talent acquisition. He concludes with a clear, actionable recommendation: focus on one startup at a time, dedicating all mental and operational energy to a single set of customers and problems.
Chapters
One of the questions I get most often is, what's been my biggest mistake as an entrepreneur? And that's a tough question because I have to choose between a multitude of mistakes I've made over the course of, you know, multiple decades and 3 startups. But this one definitely makes the top 1 or 2. And the mistake was trying to do 2 startups at At the same time. So I started my first company when I was 24. The company did well. It was, you know, cash flow positive and profitable. It grew really fast. It made the Inc. 500 list of the fastest growing companies 3 years in a row. 6 years into the company, things were going well. I had a management team in place. And then I had the bright idea of saying, oh, you know, lots of exciting things going on. I've been in the financial services software space for a long time. I'm not that Excited about it. I'm gonna do this second startup. Starting the second one without having brought the first one to some sort of kind of resolution and trying to be the kind of founder CEO of 2 companies was officially my biggest mistake. Here's some really good reasons why you should not try to do this. First one is that startups are hard generally. Odds of success reasonably low for some definition of success. The odds go down dramatically if you're not focused on one of them. Thing number 2, when you start the second company, the first team, the company in that team is going to feel abandonment. They're going to be like, okay, so why is he now doing this new thing? Does he not love us anymore? Does he not care about this company? The new team, as I was building it out, however small, felt like they weren't getting my full attention because I still had this, you know, growing company that was a decent size at the time. So neither team is happy. Reason number 3 is that You know, it's really hard to kind of dig in, especially if the kind of ideas are somewhat unrelated or in different industries or different types of businesses. It's really hard to dig in and learn that domain. That's really what it takes is to kind of build the expertise and kind of build the industry contacts, and you get to kind of know the people and know the market. It's really hard to do that for, for 2 companies at the same time. Reason number 4 is part of the motivation as you're doing this startup is you're trying to figure out whether there's there there. You know, is this idea sufficiently good? And when you have 2 startups, let's say one or both fail, you will never really know whether it was because the idea wasn't that good or market wasn't there or it's because you just were not focused. It's just hard to know. And so you want to kind of take that off the table. This is what it takes for a startup. You want to put everything you have into that one idea, that one startup. And then in the event that it doesn't work out, you know that it wasn't because of a dilution of focus. It was just maybe the idea wasn't good. Maybe you made some execution mistakes. It can be any number of things, but at least it wasn't that you were trying to ride 2 horses at the same time. Reason number 5, I think we're up to. If you ever decide to raise capital, angel capital, venture capital, whatever it is, I will say it is borderline impossible to do so if you're trying to lead 2 companies. The very first thing, if they take the call in the first place, if they figure out you're running 2 companies, the first thing that investors are going to ask you to do is to pick one. There's like slim to zero chance that they'll allow you to run both companies and invest in just one of them. It just doesn't, doesn't make sense. As you come across people, which is what most startups are about, is it, you know, meeting exceptionally talented people, your odds of doing that are lower because you're not exactly sure which company to talk to them about. And you will feel some amount of confusion around it because like, I met this awesome person that's an awesome engineer, designer, whatever it is. Well, if you've got 2 companies, which one do you direct them to? Everything is now much, much harder because you sort of have to make the choice. Does it relate to this thing or that company? So short advice is don't do it. Don't do what I did. That's the one thing I would try to redo. You want to wake up Every morning thinking about a startup, an idea, a set of customers whose problem you're trying to solve. You want to go to bed at night thinking about an idea, a set of customers, and their problems you're trying to solve, not trying to divide it up amongst multiple ideas. You think once again that you might be spreading your bets and, you know, you're just going to put enough investment in to figure out which one's the better idea. I understand the rationalization, but it just doesn't work. It really doesn't. So anyway, that's my mistake. Advice is one startup at a time. Be completely focused because startups are literally all-consuming.
