So, you’ve got an awesome business. After a couple of years of incredibly hard work, things are finally going great. You’ve got backers. You’ve got customers. And now, for some reason, all you can focus on is creating an exit strategy. It’s what the industry tells you that you need to do. But it just doesn’t make sense. At a time when startups are feeding the economy, we need a shift in focus. It’s time for entrepreneurs to stop obsessing over their exit strategy and build a great company instead.
Why there is more to business than a fast exit
While there is no shame in seeing a lump sum payday for your efforts, there is a strong argument to be made for looking to the bigger picture. And re-evaluating accepted pearls of wisdom.
People spend several years specialising and becoming an expert in their chosen field and following a sale, there is a risk that the new venture may not work. Why obsess over changing your career and interests into something that may not be successful, as opposed to continuing to increase your expertise in your current field and create legacy?
You don’t need to be successful before you’re 25
If you read any entrepreneurial press, you’d be forgiven for considering yourself a failure if you’ve hit 26 without making your fortune. According to all the benchmarks, you should have created a game-changing business, sold it for millions, and moved on to your next big thing before you’ve reached your quarter century. But that’s a lot of unnecessary pressure to put on yourself.
25 is really young. Half the population still don’t know what they want to do with their lives at that stage – and the other half will probably change their minds later. According to research conducted in 2013, the average man doesn’t become fully emotionally mature until age 43. Women, at age 32. So, why put that extra pressure on yourself? Of course, most of us have the drive to attain money. It is one of life’s essentials. But there is nothing about developing and running a profitable business that could be classified as unsuccessful. We need to redefine what we mean by success.
Shaping a mission around business growth can be more rewarding than a fast sell
Redefining success means acknowledging the value of your efforts. And for most startups and entrepreneurs, creating a sustainable business with a strong strategy should be something to celebrate.
Of course, in some cases, getting a business in a fit state to be sold is the only viable option. If you don’t have the capital to take your business in the direction you wish it to go, or you know that your product will flourish under a bigger brand’s umbrella, then selling makes sense. And provides its own satisfaction. But working with your business, building it to the best it can be, provides more.
It also opens the opportunity for a better deal further down the line. If you focus on making your business a success, your exit – if you wish for one – will look after itself.
Acquisitions are an easy out rather than the desired outcome
And yet entrepreneurs are still taught to work with an exit strategy in mind. Why? Because in the scheme of things, acquisitions are easy. If you sell your business as soon as it becomes potentially viable, you avoid some of the hardest graft. And fine, that might really appeal to you. But the satisfaction of seeing your tiny, nebulous idea grow into a going concern under your leadership is incomparable. Growth should always be a startup’s goal. An acquisition can always come later. Some books that focus on building great companies that last a lifetime include Built to Last by Jerry I. Porras and Good to Great by Jim Collins. Recommended reading if you aspire to create a legacy with your business.
Once upon a time, building your own business was something to aspire to. If you created a company that could sustain your career or even half of it, you were successful. But for some reason, we’ve switched. Developing an economic ecosystem that values fast turnaround over long-term success.
It’s time to realise that building a business and continuing to grow both the business and your expertise within that role, IS a worthy purpose. If we want to return sustainability to startups, entrepreneurs need to stop focusing on their exit strategy and instead commit to sustained development, being the best in their field, and maintaining their legacy.