It seems the latest hottest thing is having a company that's about to issue its IPO or one that's so wildly successful another firm acquired it. The idea of going public with a company apparently is so compelling that many entrepreneurs are launching new businesses with the intention of doing just that.
This trend is increasingly visible in the technology sector, an industry known for its high growth potential. There's really nothing wrong with an organization being acquired. In fact, selling your company to a major competitor is quite the accomplishment. But creating a company with the sole goal of selling it likely will compromise your position -- and your startup's, too. When we create something with the intention of giving it up, we also give up valuable leverage. And it's that very leverage that can hold incredible bargaining power when it comes time to strike a deal.
Build for the long term.
Jeff Baxter, a highly respected C-level executive and current CEO and President of VBI Vaccines (NASDAQ:VBIV), puts it eloquently: “If you build a company to be acquired, it doesn’t usually happen.” Successful business owners know they need to build companies with long-term staying power. If you change your business every time the wind blows in the direction of a new corporate buyer, you weaken your organization's core strength.
Baxter’s company follows his advice. VBI Vaccines focuses on largely undiscovered opportunities, which allows the company to develop the best possible solution on the market. “We’re very excited about VBI and we’ve been somewhat in stealth mode the last two to three years as we’ve been building our assets," Baxter says. Barring an investment offer "that can't be refused," the company's plan is to move forward with commercializing these assets (the vaccines) on its own. Baxter's long-term approach to building his company likely has contributed to its early success in clinical trials and positive valuations on the stock market.
Understand your own motives.
Prospective business owners must closely examine their motivations before setting up shop. Simon Sinek's best-selling "Start With Why" is a thought-provoking read on how thinking, acting and communicating in a certain way can give leaders the ability to inspire themselves and those around them. The book's premise hinges on a leader’s core motivations. These must hold significant weight.
The fact is, money alone isn't a good enough motivator for success. Nor is it very good at influencing others' behavior. Money can be the initial attraction to recruit talent. But if money is the only reason your new superstar joined your company, it will be difficult to retain that talent and encourage employees to do their best.
An exclusive focus on money contributes to companies' inability to be acquired. Just as money alone won't drive talented professionals to do their best, short-term profit goals will hamstring leaders’ decision-making. Ultimately, both will damage the company’s long-term success. Few -- if any -- leaders would dispute that an organization's success depends greatly on the people who support it. Money alone may not provide a strong enough foundation to weather the peaks and valleys every company inevitably faces.
Model the mindset you want your team to adopt.
Think about the executive assistant who gets a call from a very important prospective who finally wants to close the deal. Now imagine the call comes in after the assistant already has clocked out. Motivated only by a paycheck, that assistant likely would leave the message until the next day -- when he or she is back on the clock. Motivated by a desire to make sure the company succeeds, though, that assistant would do whatever it took to follow up (even if it means staying far past regular hours).
Business owners and entrepreneurs aren't the only ones who need to stay motivated. It takes village to raise a child, and it takes many villages and support systems to grow a business. Before we embark on our next entrepreneurial adventure, we must ask ourselves to be honest about our true motivations. Are we in it simply for the money? If so, maybe we need to re-evaluate our priorities.