Startups are the journey, not the exit


Two weeks ago I was in Boston, speaking at the Angel Capital Association, surrounded by many hundreds of fellow startup investors.  As is usually the case in such gatherings, the most common word in the room was “exit” as that is the obsession of the modern startup investor.

My talk included that word as well, but only in contrast, as it’s title was “Investing without Exits” and was a variation on the talk recorded on-stage back in February in Seattle.

From yesterday’s post, what is missing from that talk is the “why”.  Why is it so wrong to focus on the exit?  Why would it still be wrong even if they were far more common?

The answer to that comes from Alan Watts, a philosopher from the 20th Century who hated business.  He thus didn’t write about business, but his ideas are relevant nonetheless, and relevant to this question.  The answer is simple, startups are about DOING business, not about SELLING the business.

I’ve met some entrepreneurs who start a company solely with the goal of being acquired and getting rich.  Very few of these entrepreneurs succeed at that goal, as they don’t first and foremost want to provide a useful service to customers.  No customers, no business.  No business, no chance of exit.

Successful companies serve customers.  And in doing so, build a culture that serve employees who serve those customers.  Without the pressure to exit, a lot more of these companies would still be around, still serving customers, still serving a purpose in the world.

Instead, we have some success claimed by entrepreneurs and investors via acquisitions, and at best we have some of that capital recycled to help new entrepreneurs, but most of the result of acquisition are the end of life of products, services that are shut off, and customers that have to find new solutions.

Like music, dance, and sailing, if you are working at your startup, you are already “there”.

By "Luni"


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