Short Exit Plans Work

Sam Parr shares insights about exit strategies and acquisitions based on his experience selling The Hustle to HubSpot. He challenges the Silicon Valley notion that you shouldn't build to sell, arguing that intentionally building for an exit can be a valid and successful strategy.

Key Points:

• Silicon Valley Exit Strategy Myths:

  • Common saying: "Don't have an exit plan, great things get bought not sold"
  • Sam believes this is nonsense
  • You can intentionally build a company to exit in 2-6 years
  • Can target specific exit values ($10M-$100M+)

• Building From Scratch vs. Big Company Innovation:

  • 1-2 focused entrepreneurs with minimal funding can often outperform
  • Can accomplish more in 6 months than a 50-person team with $1M in 12 months
  • Creative types either:
    • Work for themselves
    • Get stuck in corporate politics
    • Focus on impressing bosses instead of innovating

• Post-Acquisition Realities:

  • Progress velocity slows significantly
  • Trade-offs emerge:
    • Anxiety goes way down
    • Frustration goes way up
  • Big companies aren't necessarily "idiots":
    • Can be excellent operators
    • Bureaucracy creates useful redundancy
    • Redundancy creates predictability
    • Predictability creates value

• Planning Evolution:

  • Early-stage startups should focus on weekly planning
  • As company grows, longer-term planning becomes necessary
  • Big companies need quarterly and yearly planning
  • 5-year projections make more sense at scale
  • Important to balance between short-term agility and long-term strategy