I guess I have to start with an apology – it has been a little while since my last posting. Not that you would care, do you? But I do care a great deal about your comments – guys, thank you so much for your thoughtful comments lately (and I thought that nobody actually reads my blog & it’s more an exercise in collecting my thoughts)! It’s much appreciated and I love to discuss my viewpoints with you.

Anyway – let’s get to business. Talking about which – part of my business is to talk to entrepreneurs and start-ups. A lot. What strikes me time and time again is the misguided intention or better ‘driving force’ behind some people’s desire to build a start-up. If you are in contact with a larger group of start-ups you might have seen them yourself – founder which seem to only exist for that fabled event commonly referred to as ‘THE EXIT‘ (which more often than not fails to materialize).

Now you might ask: What’s wrong with that? Doesn’t the whole venture capital industry live of exactly this fact? The answer (at least for me – and this is a rather personal matter, so take it with a pinch of salt) is straight and ugly: No. It is wrong – out of a couple of reasons:

a) More likely than not you will never have an exit event (a sale or even an IPO – though I guess nobody really thinks that this is a likely outcome anymore). Especially if you are based in Europe your chances to sell your company are slim – we simply don’t have a strong M&A culture and beside a couple of media companies like Holtzbrinck in Germany there are simply not a lot of buyers.

b) It usually takes time to build a successful company. We are talking years. Years you and your team need to stay motivated, navigate all the tough times (and believe me – they will come) and reinvent the company regularly (most successful companies change face quite substantially during their lifetime). Can you really do this if your primary motivation is money (and let’s face it – if you are exit-driven, it really means you want to get rich. Nothing wrong with that – it’s just a rather weak motivator when the sailing gets rough).

c) Building companies based on an exit goal might detract you from the real goals – building a sustainable company which provides an income for the people who work there and delivers a service the public needs.

There we have it – I fundamentally believe that you should only build companies which you truly believe in, which set out to deliver a service to the public and which (at least in the case of for-profits) have the clear goal of providing income to the people who work there. The funny thing is – if you succeed in building a company which follows these guiding principles, you’ll find yourself in the comfortable situation that your business becomes so much more sellable than the next build-it-quick-and-cash-out-clone down the road.

Posted in: Entrepreneurship