In business school, there were students who wanted to have their own business (a large portion wanted to work for big corporations). For those wanting their own business, one of the professors asked the class what they wanted to start a business in and if it was their passion (something they loved to do)? We answered his questions and the responses were varied. I said I wanted to have several online magazines. Then he asked what our exit strategies were? Most said they were building to sell, they wanted a part of the internet boom period. I said I wanted to sell when I retire or close them down. He said only one of us was doing what our passion was because there wouldn’t be an exit strategy in the near future (building to sell).
Why do most start-ups fail? Same reason why many commercial bloggers do not have the success they would like. Unrealistic expectations. Everyone isn’t meant to have their own business just as everyone isn’t meant to be a doctor, lawyer, police officer, etc. A startling number of people enter into the commercial arena with zero business experience, and without the inclination to take some classes (gain some knowledge) to help them excel.
To complete my degrees I had to finish a series of classes called Critical Thinking. The classes forced students to consider all the issues in a situation and prompted the student to be creative in their thought process. Many of the students failed those classes. Seriously, they were tough. We received questions like this:
Lab technician Jim collects a culture from a patient on which the doctor previously operated. Jim carefully collects pus from a wound on the leg of the patient using a toothpick and then, seeing another wound on the face of the patient, washes the face wound with iodine and, using the same toothpick, collects serum from that wound. Jim drops the toothpick into a tube of nutrient broth, puts the name of the doctor on the broth culture tube, and takes it to the lab on the way home from work. List the mistakes Jim made.
Two airports A and B are 400 miles apart, and B is due east of airport A. A plane flew from A to B in 2 hours and then returned to airport A in 2 1/2 hours. If the wind blew from due west with a constant velocity during the entire trip, find the speed of the plane in still air and the speed of the wind.
Let’s not forget:
Although 95% of the crust of the Earth is composed of either igneous or metamorphic rock, 75% of the exposed surface of the continental crust is sedimentary rock. This is because
a. erosion of surface soil and rocks has produced a veneer of sediments over most of the Earth, and lithification of these sediments has produced sedimentary rock strata
b. the temperature of the Earth increases downward, leading to the creation of vast amounts of igneous and metamorphic rocks
c. oceanic crust, which covers about 70% of the Earth’s surface, is largely composed of igneous rocks, such as basalt, which forms at oceanic ridges
d. constitute such a small percentage of the surface of the Earth that they contribute much less material to the surface than do physical and chemical precipitation of sediment
Each class the questions were harder but the point was to make the student “think” about the situation and not pick what might appear to be the obvious answer, to avoid skipping steps in the thought process and to do the work necessary to achieve the right answer (because there is only one right answer). Eventually the questions moved to business related situations, which again, had one optimal answer. Knowing the answer (exit plan) doesn’t mean the pieces can be put together to form the question (product or service that will gain the exit expectation).
This is why people who have an exit strategy in their mind tend to fail before they get the company strong enough to be considered a realistic option for sale. The person has the end goal (exit) on their mind and most likely will do everything possible to quickly achieve that goal, working backwards to form the product or service.
Making the product or service meet their exit plans instead focusing on making their product or service a strong competitor in the market, justifying their exit projection.
Ok Tyme, what’s your point?
Continuing the co-founder/partner series, don’t partner with someone who has the focal point exiting instead of creating. Your business will most likely fail and you will frustrate yourself.
Think of it this way: when a couple has a child do they focus on the child being grown and out of the house or do they try to do their best to raise their child right, cherishing the moments they have while their child grows? It is the same with a business. The person with realistic expectations will look forward to the business growing as a parent wants to experience their child grow up.
Try to find a partner with critical thinking skills. They have minimal chances of having unrealistic expectations because they view the situation as it is, not how they’d like it to be.
Don’t settle for anything less.