Recently, I have been struck by the sharp focus UK CEOs bring to exiting. It seems like it’s one of the foremost thoughts they have at the very outset of their business – right at the launch stage (FYI, the UK-based Venture Capital, and Private Equity markets are seriously impressive in their maturity: kudos to everyone who’s a part of that community)
For CEOs in less mature markets there is a lesson in this:
In markets where the ecosystem through which a business moves from Seed funding to Series C is less mature, exiting is barely part of the narrative. Investors/CEOs and Founders are more likely to focus on just getting a business up and riding and then see what happens down the line.
Which is a fair strategy, given the context.
However, when operating in mature investment ecosystems, exiting is front-and-center, and this provides a variety of benefits:
- You start a business like you intend to finish it. This brings focus, excellence, and a long-term but finite orientation into play.
- You are keenly focused on your own ROT (Return on Time) and highly avoidant of dedicating your time to a business that won’t offer you a just reward, personally.
- You are equally keenly focused on the best possible upside potential of the business and have little appetite for running a business that delivers less than acceptable ROI.
The point is this: too many investors and CEOs start businesses based on a dream, an idea, or an aspiration. Nothing wrong with that: live your best life.
However, if the pre-conditions aren’t set up intentionally, those same CEOs can find themselves building a mediocre, uncompetitive business that doesn’t warrant their energy or involvement because it’s simply not fit enough to succeed – or succeed well enough.
Whether you intended to exit or not, hold your business to the standards of an exit-focused business. This mindset will provide valuable guardrails along the way as you shape the business. Your standards are set in stone, which is a great mitigator against mediocrity, apathy, and settling.
All great and valuable (and exited …) businesses thrive on unrelenting high standards and valuations.