As the founder of Customer Lobby, I regularly get asked “what is your exit strategy?” More on this later….
We are in another internet bubble again. There are lots of companies that are being started with the idea of being sold quickly and where the primary motivation of the founder(s) is money. As has been the case with all bubbles/booms thus far, this bubble will come to an end. The entrepreneurs as well as the investors and customers that believed in them will be in crisis. Why? Not only will funding be much harder to come by, motivation to keep going without the hope of a near-term pay-day will be hard to find.
For background, earlier in my career, I was a venture capitalist, a private equity investor and an investment banker. One would think that an exit strategy would be very top-of-mind for me in creating and building a company. It was and is not.
I have some unsolicited advice for would-be entrepreneurs: if you can’t honestly say that your primary motivation is that you want to help (fill in your target customer base here) do (fill in what you want to do to help here), then seriously reconsider what you are doing. The truth is that running a business (even a very successful business) is often tough. There are always set backs, delays, problems, etc. In the hard times, if the only thing that is motivating you is money, it sucks. Trust me, I have been there.
Don’t get me wrong, I like money and I like the idea of being rewarded for doing right. However, money is not a key motivator for me with one exception: I really like the idea of helping to create wealth for the managers and employees of our company. But in the times of my life when money has been a primary motivator, I have not been as happy as I am now.
My motivation? I want to build something that matters. I want to work with smart, happy people who share a common goal and enjoy working toward it. I want to help our customers in ways they expect us to. I want to help our customers in ways they don’t expect us to and, often, don’t even know about. I want to believe in what I am doing. I want to sell something that I know is a great value for those that buy it. I want to learn from my mistakes and make new ones.
So what is my exit strategy? Without directly answering the question, here is a story that illustrates my thinking. As a private equity investor in 2002, I tried to buy part of GoDaddy from its then owner Bob Parsons. Bob had founded/sold a company to Intuit before he founded GoDaddy and, as a result, was very wealthy. For many reasons, it was a very memorable meeting for me. Bob’s response to my interest in buying part or all of GoDaddy was to say “Why would I sell? I need the company more than it needs me.” I am not there yet, but I am trying.