Simon Dawson/Bloomberg NewsSean Parker, 32, was a co-founder of Napster.Sean Parker, the 32-year-old billionaire and former president of Facebook — played by Justin Timberlake in “The Social Network” — was sitting on the top floor of his town house in the West Village of Manhattan last month, lamenting that too few entrepreneurs continue taking big risks after their first great success.
“Every good entrepreneur I know ends up in the wasteland of being a venture capitalist. It’s really frustrating,” he said.
Mr. Parker was sitting, or more accurately, slouching, on a couch next to his best friend and business partner, Shawn Fanning. Together, they founded Napster in 1999, the online music service that upended the entire industry before closing and filing for bankruptcy after losing a court case over piracy.
“How can you as an entrepreneur that’s had success, has a reputation, ever build the courage to go and do something again?” he asked, almost rhetorically. “Most entrepreneurs don’t remain entrepreneurs. It’s just too psychologically draining to have to constantly start over.”
More than a decade later, however, Sean and Shawn are at it again. The two recently started a video chat service called Airtime. (Think Skype, mixed with Facebook and a twist of Chatroulette.)
Mr. Parker and Mr. Fanning are the exceptions to the successful-entrepreneurs-still-working theory. Sure, there are a handful of serial entrepreneurs out there in Silicon Valley: Jack Dorsey started Twitter and Square, for example, and Elon Musk, who was behind PayPal, now runs SpaceX and Tesla.
But the career trajectory of many tremendously successful entrepreneurs in Silicon Valley often looks like a rocket ship that stops in midair. Less charitably, Mr. Parker suggests some could be called one-hit wonders.
“The list of people who have started from scratch over and over and succeeded systematically over a long period of time is incredibly short,” he said. “The only person I can think of off the cuff is Jobs who had Apple, Next, Pixar, continued doing Pixar and Next and then Apple again, which is really a different company.”
He said that the tendency of great entrepreneurs was either to become merely an operator of one company or, like Sumner Redstone, move into an investor-ownership role.
The Silicon Valley version becomes a venture capitalist. For example, Peter Thiel, who co-founded PayPal, has gone on to be a successful venture capitalist through his firm Founders Fund, investing in other companies’ businesses, like Facebook and Spotify. But Mr. Thiel hasn’t endeavored to start a new company himself. (He did start a hedge fund, but that’s still investing.) He happens to be in business with Mr. Parker, who is a partner in the fund, which also invested in his Airtime.
Marc Andreessen, a longtime star of Silicon Valley, co-founded Netscape in 1994. He started two companies after that: Loudcloud and Ning. Both had modest success, but neither was comparable to Netscape. Mr. Andreessen became one of those venture capitalists Mr. Parker dreads, but with an extremely successful track record of having invested in some of the most promising technology companies, including Facebook, Groupon, Twitter, Zynga, Pinterest and Instagram (which was sold this year to Facebook for $1 billion).
Perhaps surprisingly, Mr. Andreessen said of Mr. Parker’s theory: “I sort of agree with him.” In an interview, he said many “former entrepreneurs crossed over to be V.C.’s and it hasn’t worked out well.” He added, “You don’t want to be Michael Jordan playing baseball.”
Mr. Andreessen said he differentiated his decision to pursue investing from that of other entrepreneurs-turned-investors, because he approached it as an entrepreneurial effort to “rethink the model of venture capital.” He has sought to reimagine the way a venture capital firm works from top to bottom, and so far, it appears to working quite spectacularly.
Still, to Mr. Parker, most entrepreneurs who seek out investments do so as “a total cop-out.” He explained his thinking: “You have a whole portfolio, you only focus on your successes, you ignore your failures and you get to continue looking like a player, but you’re ultimately not in control of anything.”
He continued: “Everything is probabilistic, nothing is deterministic, so you never have that satisfaction of knowing that you’re in control of an outcome. So you spend all of your time managing your reputation, managing your relationships and you spend almost no time thinking creatively or doing the things that an entrepreneur is good at doing.”
If it sounds as if Mr. Parker is talking only about others, he’s not. He’s also talking about himself.
After stepping down from Facebook in 2005, he joined Mr. Thiel’s Founders Fund and for several years worked on making investments, including in Spotify and Votizen.
He also worked on Causes, a site to raise money and awareness for issues and nonprofits. That venture only muddled along, and he said he did not commit to it wholeheartedly enough.
He said the biggest challenge for any new start-up by a previously successful entrepreneur was focusing too much “on downside protection, which is just assuming failure from the outset.” Being worried about failure and its effect on one’s reputation, he said, is “very dangerous.”
He said he was reluctant to start a new company like Airtime until just recently.
“The expectation thing definitely weighs on me. There’s a sort of fear of launching something and failing,” he said. “I had to decide I am going to try to go the road less traveled and just be an entrepreneur that’s willing to go back and start things from scratch.”
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