Mar 302005
Counter Cliche: Ready, Set, Exit
Counter Cliche: Ready, Set, Exit
Fred’s VC Cliche of the week is the about the Quick Flip. My counter to that is Ready, Set, Exit (image from Google Images).
Most quick flips involve a huge element of luck. For every quick flip out there, there are dozens of companies that thought they’d be quick flips and ended up crashing and burning instead. Back in 1999, when we started Return Path, another Internet entrepreneur I knew loved the idea so much that he told me to start writing the book then, because I would be able to sell the for $100 million before we even had a product in the market. He said the title of the book would be Ready, Set, Exit.
We were careful not to behave that way, and that’s one of the reasons we’re still here and doing as well as we are doing today.
As nice as it is to be an investor or an entrepreneur who falls into a Quick Flip scenario, beware of anyone who’s planning on Ready, Set, Exit, whether you’re being pitched to invest, to join the company, or even to be a customer. Ready, Set, Exit scenarios can’t be manufactured or counted on (if they could, everyone would do them), and that whole mentality is completely antithetical to the stamina required to build a real company.
I think it’s analogous to what everyone tells you when you’re in junior high or high school: you’ll never find a girlfriend/boyfriend if you’re out looking for one.
I agree 100%. I also think that some of the companies that flip quick are also lucky in the fact that they probably wouldn’t be able to support themselves much longer if they didn’t get gobbled up (which also means they don’t always get the valuation they might be able to down the road). But hey, hats off to the ones that do get what they want. Build to flip is a risky business model and I admire entrepreneurs who can take that level of risk… and even more so the ones that can make it in the longer term if that flip doesn’t happen as quickly as they want.
Another Smart CEO
Here’s another good post about why even thinking