When I first blogged about early exits in BC all of the comments were negative.
This wasn’t surprising. A lot has been written about the negatives of startups being ‘built to flip”. The term has a negative connotation – as if something improper is being done.
The most popular article on this topic, titled “Built to Flip” was written by Jim Collins and published in Fast Company. Mr. Collins co-authored a book called Built to Last in 1994. The book profiled 20th century icons including Disney, General Electric, HP, IBM, and Wal-Mart. Collins was previously a lecturer at the Stanford School of Business and now operates a management research lab in Boulder.
In my opinion, it was a great book – about history; but not very applicable to tech companies in the 21st century. The companies he profiles are “so 20th century” (I use that term like my teenage daughters do – as a pejorative.)
Don’t get me wrong, the companies Collins writes about were truly great – and still are. But they are not the type of companies that can be started, thrive and prosper in the 21st century.
Think about it, if you were launching a startup today, would you prefer it to be:
- Disney or Blizzard (the makers of Wow)?
- IBM or Yahoo?
- HP or Google?
- Wal-Mart or Amazon or eBay?
‘Built to flip’ is not a dirty phase or unnatural act. To succeed today, I believe entrepreneurs must not only aspire to early exits, but design them into their corporate structures and corporate DNA.
The internet has changed everything. Most importantly it has accelerated everything.
It’s just not possible to take decades to build a company anymore. The entrepreneurs, employees and investors just don’t have the patience. Even if they did, their competitors don’t.
The good news is with good design and excellent execution, it only takes a few years to build a great company and realize a successful early exit.