This morning, Ben Chestnut (co-founder & CEO of Mailchimp) tweeted a link to an article written by Jake Lodwick. Jake created and sold brands like Vimeo & College Humor. He shares:
An acquisition, or an aqui-hire, is always a failure. Either the founders failed to achieve their goal, or – far likelier – they failed to dream big enough. The proper ambition for a tech entrepreneur should be to join the ranks of the great tech companies, or, at least, to create a profitable, independent company beloved by employees, customers, and shareholders.
Creating an endearing brand and cashing out is a dream for a lot of people. You read Forbes or see rich people on TV and you get sucked into the dream… “All I have to do is create something people love, make it profitable, sell it to a conglomerate, and retire.”
I’ve met lots of people who have this dream.
A Revolution with an Exit Plan
I’ll admit it. Big acquisition was once my dream. Between 2005 and 2008, I completed the first step by creating Youth Ministry Exchange with a group of friends, seeing it grow like crazy, then guiding it through an acquisition process.
My hope was to keep creating and flipping increasingly larger web properties. But I couldn’t stomach it.
I liked starting things but hated selling them.
The Ember of Revolution
Together, at YMX we created a bottom-up revolution. We gave voice and opportunity to a lot of people who were very talented but found closed doors everywhere they looked. Instead of waiting for doors to be opened we built a Sawzall and created our own freaking doors of opportunity which couldn’t be ignored.
It was fun to give people opportunities, see them prove themselves, and watch as they took off. There are YMX’ers all over doing cool things now… seeing that process take shape created a fire within me I never thought of prior to creating YMX. The revolution became the goal and the website was just a means to an end.
In June 2008, Patti and I sold YMX. I didn’t understand at the time how much selling YMX would hurt me emotionally. It was one of those dreams you fulfill that you later discover wasn’t really your dream, it was a shadow of the real dream. Inking the deal was fun. Getting the check was pretty cool. But it was altogether a meh experience.
I’ve met and talked to a lot of entrepreneurs with the same experience. Passion for an idea leads to incredible personal sacrifice, overcoming horrible odds, and finding some level of success. It becomes a love affair with that idea. Then you get an offer or two. You think that you’re giving that idea a better opportunity by selling it to something with deeper pockets… but you quickly learn that you’ve just turned your dream into a line item on someone’s spreadsheet. They care. But not the way you did.
You’re left with a fatter bank account and a broken heart.
I never did 4-H. But I imagine that 4-H kids feel the same way when their heifer gets sold at auction. That was always the plan, but it still hurts.
[Sidenote: There’s a difference between the broken heartedness I experienced and regret. I don’t regret selling as it lead to many awesome things, but it wasn’t what I’d hoped either.]
As the article points out, acquisition is always a failure. While I succeeded in creating and selling something worth selling, it was also a failure because the vision of what made it awesome wasn’t fulfilled.
When I meet fellow entrepreneurs who have done the same thing this always comes out. Almost all promise they’ll never do it again. It hurts too much.
No More Exit Plans
This time things are different. With the Cartel, our business model is smarter and our plan is to continually invest in the revolution. This “bottom-up revolution” is built right into the DNA of what we’re trying to do. It’s unique, fun, and genuinely us.
And its fun to know there is no exit plan. Failure is always an option, but taking that particular failure off the table is fun.
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