5. Forget the “exit strategy”. If exiting is that important to you, maybe you shouldn’t have gone into it in the first place.
It's become conventional wisdom - hardly even questioned - to tell anyone starting a business of any size that one of the first things they need to think about is the "exit strategy". Some advisors say that this should be done when you do your initial business plan. You're supposed to decide if you plan to sell the business, give it to your children, IPO it or simply close it down. Then you're supposed to focus the business towards that eventual exit. Of course.
My reaction? How the **** should I know what my exit strategy is? Look, it takes five long hard (see post below) years on average to even get a business to the point where it makes a profit. Another five probably to establish it to the point where anyone would remotely want to buy it. Another five - at least - to get it (assuming it's big and ambitious, which most non-IT, non-financial services businesses are not) to gear it up for going public. I once had the reality of IPOing explained to me by a very likeable client - who did indeed sell and make a lot of money eventually, but who said that the years leading up to it were at times hellish in their sheer stress. Okay the truth is that I was very impressed and a little intimidated to find him on the front page of the Financial Times around the time we were having this conversation. I assumed that for him the years of hardship were worth it. And the exit must have been welcome. But then again, he was in one of those classical IT businesses that does this kind of thing.
The reality of the world right now is that things are changing - and changing faster, less predictably and in a more volatile way than ever before. In the six and a bit years I've been here, the Czech Crown has moved from being only 42 to the US dollar to being 15. That alone has shifted a lot of things hugely. Flats in the centre here have moved from being cheap to being - even in the trendier outskirts - at not that much under London prices of a couple of years ago. They now look like moving back to relatively cheap again. Streets that used to be quiet are now choked with traffic. Little local shops in the centre are vanishing and being replaced by chainstores. Marks and Spencer is everywhere and Starbucks (OMG) is moving in.
Those are only local changes. In the bigger, badder, wider world look what's happening. In 2000 did you read constantly in the media about Islamic fundamentalism? Did you imagine oil heading towards $200 a barrel? Did you expect to find out that we've killed off 25% of our world wildlife in a few short years?
I'm not trying to be doom-laden about this. In fact, on good days I feel perversely optimistic about the world. But I find the idea of planning what I'm going to do with the business when we want to get out of it (and as Alex is considerably younger than me this is indeed a long way off) just a waste of time and effort. Exit strategy? I am in this business because I love what we do and couldn't think of anything more fulfilling than doing studio work. Even if I wanted to think about exits, I'm in no position, until I learn to use my crystal ball a good deal more accurately, to imagine where an exit might be in years to come. Exit? I'll plan it only if and when I can see that the need for it is both imminent and clear.