David Cummings on Startups

Build to Last or Build to Sell

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David Cummings

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Whenever I give a talk and tell the Pardot story, one of the 10 most popular questions I get is “did you have a plan to sell the company?” My response is always that our goal was to build the best company possible and to make sure that it met the two following conditions:

  • Be the best place to work and the best place to be a customer
  • Follow the core values of positive, self-starting, and supportive

If a potential acquirer comes along and makes an offer we can’t refuse, we’ll look at and consider it (which is what happened). Put another way, the business isn’t for sale, but tell me what you’re offering.

Yes, it’s common for entrepreneurs to have a financial goal and to sell the company when the financial goal is met. Based on how much luck and timing is involved in a successful exit, I think the best approach is to build a company to last, not to sell.

What else? What are some more thoughts on build to last or build to sell?

Comments

3 responses to “Build to Last or Build to Sell”

  1. ritmatt Avatar
    ritmatt

    I totally agree, David. Build a company with staying power and you’ll have a company worth buying. I’d add that building a “company to last” means – and this is critical – building a company with an effective leadership team. A business coach taught me a simple truism: a company’s success is limited by its leadership capacity. How very true! Build an effective leadership team and you’ll have a valuable company, whether you choose to keep it or sell it.

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  2. Alan W. Urech Avatar
    Alan W. Urech

    I certainly agree. When we built HBOC our goal was to make healthcare more efficient and effective for the patents, hospital staff and ourselves.. Said another way, How can “Mom” (end user) ultimately benefit from what we were doing. McKesson wanted to get into the Health IT market and they looked for the #1 in the industry, which was us. Build your company out of passion to make a difference.

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  3. Drew Hawkins Avatar
    Drew Hawkins

    I think the same could be said about job or career transitions. Some try and look for the next better opportunity/role while others try to make the best in their current position. I’ve tried both. After reflection, I’ve noticed that the offers for better job opportunities (bigger salary, role, better work etc) have come when I’ve done the latter – be as good as I could be in my current role and approach it like I am going to be in that role for a very very long time. The work improves greatly as a result and you don’t have to settle.

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