As I take on more technology startups as clients, some of whom are looking for seed and venture capital in order to grow, I feel the need to revisit a belief I held for many years: Does a business have to last forever?
The original meaning of “company” was to assemble resources for a specific mission. This is how the explorers of the 16th and 17th centurys obtained the ships and men to explore the New World. Quite often, the companies were disbanded after the mission. On the other hand, some companies, such as the Hudson’s Bay Company, founded in 1670, still exist today.
Do you want your business to achieve a short term goal, or to last forever? Does this mean changing the way you build your company at the start?
The purpose of a business is to organize people, resources and effort towards a specific result. A successful business needs a mission, a vision, goals, structure, and resources. The maturity of the business also evolves as it acquires the skills, the systems and the discipline to generate results. As it grows, it develops an independence, existing separate from the people that started it, as a “virtual person”, a body corporate.
Just like humans are born and grow, a business also is born, grows, matures and declines. During its lifespan it must make its mark on the world, just like any person.
After re-reading Jim Collins’ classic “Built To Last: Successful Habits of Visionary Companies“, and a classic article by him in Fast Company, “Built To Flip?“, I agree with his conclusion: the discussion is not about whether to “build to last” or “build to flip”. The real focus should be “Build to WORK“.
Whether you launch to last as a lifestyle entrepreneur, or to sell and move on to something else as a serial venture entrepreneur, the business you build has to work from day one. This means investing the time and effort to build the foundation, skills and systems so that the business can deliver on its promise. As you build a business, keep focusing on making it work, delivering value to clients who in turn will value what you offer. This is how you build value that investors will want to contribute to.
Investors want to put their money into something that generates real, enduring value. If you build an empty shell, the money won’t come. But if you build from the start with quality in mind, then you will attract the “smart money”, knowledgeable investors that have more than money to offer – their connections, their experience, their expertise, their support.
Whether you see yourself involved in your business project for a short time or a long time, build it for value, build it to work. Build a strong foundation for your business, deliver real value to clients, and you will reap the benefits of making your mark on the world.
For more information
The influential book by Jim Collins, “Built To Last: Successful Habits of Visionary Companies”
Jim Collins’ website:
Two interesting articles on the topic from FastCompany.com:
Built To Flip? by Jim Collins
Was “Built To Last” Built To Last? by Jennifer Reingold and Ryan Underwood
Related articles on this blog:
Build A Cause, Not Just A Business:
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