Most entrepreneurs dream of the day their business is so successful that others want to buy it. But what happens when that day arrives?
By Michele Spiezia (Founder & CEO, Bespoke Atelier)
What if Lebron James went to every high school and college in the country, scouted the best players and then paid them not to play?
What if Coke bought Pepsi, then started to make it taste like Coke?
What’s the price tag to stop innovating, stop competing?
Look, I’m an Italian girl from New Jersey, so I’m no stranger to people getting paid off to keep their mouths shut and their heads out of the game. I also grew up in a blue collar family where if you had a mortgage, a city job and a pension plan you had ‘made it,’ so the opportunity to ‘hit the big time’ is one that shouldn’t be passed up.
“So, Let me Ask You…”
No matter what stage your startup, inevitably the question is asked: “What’s your exit strategy?”
As a founder who’s about to launch her platform after almost two years of insomnia inducing, heart crushing stress, I’m thinking “Exit strategy?? Jesus. How about a ‘get to the end of the week without bursting into flames’ strategy!?!”
But everyone wants to know… what’s your plan? How will you pay back those investors, make them a return? How will you earn yourself the vacation in Tahiti or the house in the hills you’ve dreamed of (or hallucinated about, since I doubt you’re getting very much sleep)? big time’ is one that shouldn’t be passed up.
The Endless Questions
Over the past month, I’ve been asked a handful of times by investors where I see the future of my company. What am I building, and why? Will I have 25 employees, or 250? It’s one of those trick(y) questions that you know you have to be careful how you answer.
Tell them you’re building the next ‘hundred year company’ and they might not be interested in investing for fear of never getting their return (besides thinking you’re having delusions of grandeur). Tell them you’re in it for the quick flip acquisition, and they’ll doubt your level of commitment to the vision of the company.
So what’s a founder to do in a landscape where companies are getting gobbled up while still in beta, widget-ey things are going at billion dollar valuations and stock prices have proved anything but stable for the social media big boys?
My Primary Motivator
I can’t speak from the perspective of the 20 year old, hoodie-wearing founder that’s sleeping on his buddy’s couch, coding his ass off. Respectfully, his motivations may differ somewhat from mine, though I agree with Alex Taub that there are typically only a few key drivers that motivate founders to build something— the desire to build something you see a market need for, the desire to make money & the desire to prove people who doubted you wrong.
As a 35-year-old wife, mom & third time (non-technical) founder, I’ll say wholeheartedly that my primary motivator for Bespoke is to create something I see a market need for and to build a viable, culturally engaged company that makes big waves in the creative space.
But neck and neck with making something meaningful is cold hard cash. Our first company was an experiment at best, living a short but interesting life during the web boom (and subsequent crash) of 1999/2000. The next, Films by Francesco, is a service business, which, though born out of passion, incredible talent and a desire to fill a market need, isn’t scalable in a way that will provide enough dough for me to pay for my kid’s college and retire before I’m senile.
My goal is to build a company that will generate enough cash that I won’t have to think about how to generate enough cash for the next 60 years I’m on the planet.
So I bust my ass and bring my platform to launch. I’m exhausted, broke & living with 90 days of clarity and cash in the bank at any given time. Let’s just assume things go well, we close a seed round, probably a series A. Bespoke kicks ass and takes names.
Before we know it, the phone starts ringing, and acquisition offers are coming in.
What’s a founder to do?
What’s the Price Tag to Stop Innovating, Stop Competing?
What founder, after all the headache, heartache & insanity of bringing a startup to life isn’t tempted to take the payout? What better reward for all that effort?
But what will happen over time if more and more startups are taking the payout and walking away? Do we just assume those smart founders will continue to disrupt & innovate with new ideas, new companies? How does it affect the type of companies that will be founded, what innovations will come to fruition, if the underlying expectation is that a giant in the market space will gobble you up and most likely shut you down?
I have no idea what lies ahead for Bespoke, but know that I’ll thoughtfully consider the options that end up on the table when it’s time for us to make any major moves.
And though creating something meaningful and getting paid to do it top my list of why I’m in it, don’t doubt how much I can’t wait to prove all the doubters wrong.
This post originally appeared on Medium.