What do Henry Ford, William Hewlett, Bill Gates, Mark Zuckerberg (Facebook), and Jack Dorsey (Twitter) have in common? They didn’t focus on exit strategies; they focused on building a big company. Aren’t you sometimes stunned by the constant focus of companies on their exit strategy? I realize to raise money from investors you must give them a rational explanation of how they will see a return on their investment. It is an appropriate part of a well-developed business plan. But don’t bring that discussion back to the office to be revered as the focus of all efforts. Your employees will start making business decisions based on a short-term payout instead of long-term growth. Sprinters don’t win marathons, and building a valuable, sustainable, ongoing concern, fulfilling the needs of a large, profitable, customer base takes time. You can’t afford to distract your team from what makes your company grow: creating value for customers. If your employees focus on the exit strategy, it turns their concentration away from the customer, which, in turn, usually means a diminishing universe of unhappy customers.
Just to be clear, I don’t mean you shouldn’t work toward an IPO if you need it to grow the company. An IPO says you are in the process of building a big company, and you need others to invest in the vision. With those additional funds, you become big, or bigger. I do mean having your employees focus on being acquired disperses their energy. An old boss of mine once said if you are acquired by someone else, the employees should see it as something unavoidable… you were made you an offer you couldn’t refuse. On the way to building a big company, it just happened.
Let me assure you, if you keep everyone’s focus on building a big company, the exit strategy will take care of itself.