You could legitimately label many people as serial entrepreneurs, but Gary Kremen is in a class of his own.
Best-known as the founder of online dating site Match.com in the mid-1990s, the eccentric Illinois-raised electrical engineer has been involved with more than 50 startups. That's at least one for every year of his life or more than 1.5 per year since he was booted out of a summer internship program at Goldman Sachs during MBA school for being too disruptive. Kremen's current diet includes "just" six or seven companies simultaneously.
"I'm trying to cut down, it's like I'm in a 12-step program," he declares, his Midwestern drawl cutting in and out during our mobile-to-mobile conversation.
Still, Kremen actually believes that his most important startup is yet to come. So, when he's not chasing around his two toddlers, hiking to the highest point of every California county, or serving on the board for his local water district, his time is split among an astonishingly diverse array of businesses percolating around Silicon Valley. "I like companies that are capital-efficient, capital-light," he says, explaining his eclecticism.
The best-known of the current brood is fast-growing residential solar company Clean Power Finance, which Kremen cofounded to help installers automate the process of estimating, quoting and financing small rooftop projects, and where he still acts as an advisor. So far, the company has raised north of $65 million in venture capital and more than $500 million in financing that can be put toward individual projects. Some of the first money came from Google, Kremen and his cohort of fellow inventors, innovators and investors at Sand Hill Angels.
"My model now is, come up with the idea, get things going, and hand it off to someone who has better patience than me, better focus," Kremen says. "That's why I like working with other people in these angel groups, like Sand Hill Angels. There's always someone who is unemployed and wants to go do something."
Like many notable entrepreneurs, Kremen is drawn to problems that touch him personally. He started Match.com because he was intrigued with the idea of using data algorithms to find the right mate, buying the domain name for $2,500 on his credit card. Kremen reveals without compunction that he actually met his own wife several years ago through an even more unorthodox arrangement: he offered a trip for two to Hawaii to the person who could find him the right woman.
Although no parent will ever admit publicly to having a favorite child, Kremen returns often during our rambling 35-minute conversation to WaterSmart Software, a San Francisco developer focused on water management dashboards. After helping WaterSmart write its investor pitch, Kremen admits he couldn't turn his back on the idea given his state's water woes, so he incubated the company.
Another poignant example is CapGain Solutions, which Kremen created with his long-time collaborator and former roommate Michael McTeigue in 2012. The company exists solely for the purpose of helping investors unload "fallen angel" or "zombie" investments that are worth more dead than alive. (The actual registered name is Zombie Apocalypse Holdings.) CapGain helps people divest these relatively worthless assets, so they can recognize their losses and move on. It pays a minimal amount—in one case, just $1 for a company that had been delisted—with the hope that some future liquidation will yield a small payoff. If not, no big deal.
"The best problems are the ones you understand yourself," Kremen says. "So the problem I would have is that I would invest in a lot of things. A lot of them wouldn't work out, but they weren't quite dead. They were the living dead. It's true. So, I came up with the idea of buying these companies that still had Web sites and were still going, but people wanted income tax write-offs for them."
Just because Kremen seems to dabble a lot, it would be misguided to think of him as easy money. He specifically looks for entrepreneurs who are "grateful for help, a little less arrogant than the average. Now that there's so much capital out there, there have been some entrepreneurs that kind of get full of themselves. It goes in cycles: When there is a lot of money for companies, people get a little bit ahead of themselves. When there is less money, they get less ahead of themselves. That's not surprising."
We chat briefly about the crowdfunding craze, which essentially lets any individual put money toward a novel idea that has been ignored by traditional channels. He worries about the potential for fraud and mis-management within these take-it-or-leave-it schemes, but advocates the democratization of investment in innovation.
Kremen wears his own entrepreneurial scars and "spankings" like badges of honor. He walked away from Match.com with just $50,000 before the company hit big, but still considers it his biggest success so far. His largest disappointment was a now-defunct venture that got some splashy publicity in the 2012 timeframe called Sociogramics, which aspired to help people with minimal or bad credit histories arrange loans or financing sources. The idea came to Kremen after his own credit at a small community bank was cut off when the organization was taken over by a large financial services firm—despite the fact that his personal relationship with the bank was years-long.
What's next for Kremen? Chances are the next startups he champions, mentors or creates will be focused on under-appreciated but not necessarily "sexy" challenges like energy efficiency, demand response or water management. "As an entrepreneur, sometimes it's just about having an effect on someone, getting someone out of poverty or getting rid of a bad societal practice," he says.
The best advice I ever got: "I have ground rules. One is, don't get too greedy about it. Sometimes, especially for first-time entrepreneurs, it's better to take a single or double, because they will be treated better the next time if they make any money for someone. I'm a believer that the time you exit is when you're solving someone's problem, like a large company's problem, and they're considering buying you. You should consider exiting. Not everyone is going to be a billion-dollar company."
My biggest mistake: "Believing that founders should always be the CEO and that every founder is a great manager."
What I would tell my younger self: "Stay humble or become humble. Be open-minded. Be vulnerable. If you have a passion and vision, that's critical, but keep your mind open because you can go charging down the wrong path."
Photo credit: Clean Power Finance
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