“Getting An Exit” — Is NOT a Business Strategy, It is an Outcome of a Sound Vision and Execution
In the fast-paced world of startups, the concept of “getting an exit” has become a kind of Holy Grail for many founders. It’s the dream of selling your company for big bucks and riding into the sunset on a unicorn made of dollar bills. But what if I told you that aiming solely for an exit might just be setting you up for failure?
Let’s dive into why building with an exit in mind can be a shaky foundation for your startup and how focusing on long-term growth can unexpectedly lead you right to that much-desired exit door — perhaps on a steadier, more formidable steed.
The Allure and the Illusion of Quick Exits
Imagine a founder, let’s call her Sarah, who starts a tech company with the sole objective of selling it for a hefty sum within a few years. Her eyes are fixed on the prize from day one: everything from product development to team building is aimed at making her company attractive to potential buyers.
Sarah’s story is not uncommon. Many founders enter the startup arena with dreams of quick riches. However, this mindset can lead to decisions that prioritize short-term gains over sustainable growth — like neglecting core product quality or failing to cultivate a loyal customer base. These decisions can make the company look good in the short run but might cripple its long-term viability.
The Downfall of Exit-First Strategies
Consider the tale of a once-buzzing tech startup, which we’ll call FlashTech. The founders of FlashTech were brilliant at dressing up the company for the sale: impressive tech demos, buzzwords galore, and stellar short-term user growth stats. However, they paid little attention to user retention and product scalability. When a potential buyer did a deep dive, they found a churn rate so high that it could give anyone vertigo. FlashTech, once a shining star, quickly faded away when the buyout fell through and investors pulled back.
This story highlights a harsh truth: companies built to sell often don’t survive scrutiny. Buyers and investors are savvy; they can see through the veneer to assess a company’s real value, which is always rooted in its long-term potential.
Building for the Long Haul
Now, let’s shift gears and talk about Laura and her company, EverGrow. Laura’s approach was different. She was passionate about solving a real problem and built her company to last. She focused on creating a strong product, fostering a vibrant company culture, and developing deep relationships with her customers.
Over time, EverGrow became a leader in its niche. Interestingly, it was Laura’s focus on long-term growth and sustainability that eventually attracted multiple buyout offers. When she finally sold EverGrow, it was not because she had planned to do so from the start, but because the offer was right and the company was solid.
The Paradox of Not Planning an Exit
There’s a paradox here that’s hard to ignore: founders who don’t focus on exits often become more attractive targets for acquisition. Why? Because they’ve built something of real, enduring value. They’ve focused on strong fundamentals: a robust business model, a loyal customer base, and a product that addresses genuine needs.
These companies become like well-rooted trees that yield fruit season after season. Who wouldn’t want to own an orchard like that?
The True Path to an Exit
If you’re starting a company with the hopes of an exit, think again. Consider building a company that you’d be happy to run indefinitely. When you focus on solving real problems, building a great team, and putting down strong roots, you increase the chances of your business thriving in the long term. And paradoxically, it’s precisely this kind of company that often finds itself with the most lucrative exit opportunities.
In the startup world, it’s the tortoise, often enough, not the hare, that wins the race. So, take your time, build something lasting and watch as the world beats a path to your door — not just to buy, but to stay and grow with what you’ve built.
