Period Three Blog » Build it to last not to sell.

Aug112008

Build it to last not to sell.

Posted by Gene in Business

I’m an entrepreneur, but I don’t like to admit it. I think of myself more as a product scientist, that name “entrepreneur” just seems to have too much baggage for me personally. I’ve been watching this show called Startup Junkies, you can watch some episodes on hulu.com for free, for a while now. I find it addicting, not because I want to be like them but because I can’t help but watch the train wreck happen. Pretty voyeuristic of me I know. The thing I keep getting migraines over while watching it is the amount of focus both the show and the company seem to place on raising money from investors, and all the talk of going public and cashing in by the employees. I know that makes for good TV but it just hurts my head.

What I’ve learned over my tenure of running my own business is, that you have to build a company that you can live with. Something that you would feel comfortable with for the rest of your life. Something that you would never — NEVER — sell to anyone else (even if you wind up selling it later). We have had many clients at Period Three that are “start-ups” and I guess at a certain point we were a “start-up” ourselves. I believe in letting your business fund itself naturally and organically very early on (I know some businesses have a larger scale than P3) and I believe you can’t be afraid to work very hard to achieve and continue any money making sustainability. That means you must be willing to work ALL THE FREAKING TIME…

A good read is this post on the Diary of a failed startup blog:

It’s a marathon, but it’s a marathon made of sprints
Initial conditions matter. A lot.
Developing in a vacuum never works.
Beware the chicken and the egg.
If you’re doing anything other than building your project and getting users, it’s premature.
The product will take longer than you expect. Design for the long-term.
People have an incentive not to crush your dreams. Take everything they say with a grain of salt.
Know your limitations.

Good advice all around. Another useful set of points is this 17 Mistakes Start-ups Make list (some of these are fast killers):

Failing to spend enough time researching the business idea to see if it’s viable.
Miscalculating market size, timing, ease of entry and potential market share.
Underestimating financial requirements and timing.
Over-projecting sales volume and timing.
Making cost projections that are too low.
Hiring too many people and spending too much on offices and facilities.
Lacking a contingency plan for a shortfall in expectations.
Bringing in unnecessary partners.
Hiring for convenience rather than skill requirements.
Neglecting to manage the entire company as a whole.
Accepting that it’s “not possible” too easily rather than finding a way.
Focusing too much on sales volume and company size rather than profit.
Seeking confirmation of your actions rather than seeking the truth.
Lacking simplicity in your vision.
Lacking clarity of your long-term aim and business purpose.
Lacking focus and identity.
Lacking an exit strategy.

Period Three - Simple, Measurable, Powerful.

Build it to last not to sell.

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