This article was written in response to Jon’s speaking engagement at Columbia University on September 23, 2008. It appeared in the October 14 issue of The Bottom Line newspaper published by the Columbia Business School. Strategic Entrepreneurism
BY MARK C. TRAYLING Editor-in-Chief
Flies have a reaction time of 200 milliseconds and so when you take aim and try to swat them it can be difficult to succeed...they are quick to detect and adapt to your movement. Instead, argued Jon Fisher, one should project and aim for the fly’s exit route. This same logic can be applied to
entrepreneurism.... if you set up a company geared towards a potential acquirer in mind, you are much more likely to succeed in your venture.
Fisher presented recently at Columbia Business School on “Strategic Entrepreneurism – designing your start-ups to be acquired.” He advocated for setting up and running a company until the business model is proven and then to get out when you can. If you ensure your model works and it is ready to be scaled, then an acquirer can take care of the rest. “Times are hard” and “not everyone can become a Google,” he noted. Better to put 1 million hamburgers through 1000 stores than 1 million hamburgers through 1 store.
An example provided was Fisher’s experience in providing account security software to banks. Rather than initially aim for the largest banks like Citigroup, he aimed for Wells Fargo knowing that they would be a great proposition for an acquirer such as Oracle. Wells Fargo used Oracle and also was known in Silicon Valley – this would make for an easier exit for the business than if he’d aimed for the largest banks.
His final words of wisdom were to keep your head up always. The old maxim of keep your head down for two years and it will pay off does not hold any more...you need to be constantly looking for the next opportunity and ways to adapt.