If launching a startup has taught me anything, it's this: the best possible outcome for a startup is inexorably linked to how -- and why -- that startup was conceived in the first place.
The assumption is that people launch startups to get obscenely rich. It's all about the upside. And while there's no shame in hoping your vision and efforts will be rewarded, the odds are overwhelmingly against you. By day two at the average startup, you start to understand why: it's ridiculously hard. The truth is you'll probably end up earning closer to minimum wage than a Yahoo! acquisition.
That's why any would-be entrepreneur needs a far more thoughtful definition of upside. Not only will this help keep them motivated when the going gets tough -- which it will -- but it will also help them intuitively know which outcome is their own "best possible" when the time comes.
Professionally, I started my company Doorsteps because I wanted to create some meaningful change in the housing industry, which is just audacious enough to be worth the effort of actually taking the challenge on. It was about inspiring some kind of improvement to the world that mattered. But it wasn't just about having impact in the world, as exciting as that is. It was also about having impact in my day-to-day experience. For many of us, a startup is the only way you can see that your efforts translate into something you can see, feel, or touch. Since I began Doorsteps, I've yet to leave the office with the uncomfortable feeling that I accomplished nothing that day. In previous jobs, that happened a lot. Not because I wasn't working hard, but because the nature of big companies is such that there ends up being many, many more degrees of separation between your effort and any immediate, tangible output. And, uh, way too many meetings.
So if you were initially energized by the idea of impact -- both large and small-scale -- than your best possible outcome must ensure that you can sustain that feeling. So if acquisition is on the table, it is important that your startup not get infected with whatever it was that prevented your acquirer from doing it themselves in the first place. When we were acquired by Move Inc., the acquisition was actually the best route towards impact -- we spent months talking with Move, not because I was negotiating the most money possible, but because I needed to truly believe their passion and commitment to our vision matched ours. Once I did, saying yes to their added distribution, reach, expertise and manpower was an easy "best possible" milestone, not outcome.
Some people are simply motivated by the idea of being in control -- not just of a business, but in many ways of their lives. The irony, of course, is that once you do start a business, you realize you start answering to far more people than you probably did before. That said, there's an important psychology at work -- this is still your idea, your deal, and yes, potentially your failure.
I really admire what Ben Chestnut and Dan Kurzius have done with MailChimp. They bootstrapped an incredibly successful brand and business without a dime of outside money. I don't know either of them personally, but I assume that there was something about doing it themselves and staying private and in control that felt right psychologically, even though I can only imagine they had people throwing money at them at various points along the way. They are now a private, incredibly profitable business -- and its very clear they want to hire people who support the autonomous nature -- and culture -- of the company. In other words, they aren't looking to hire people who are hoping for a big IPO -- that's not the breed of talent or mindset they seek to attract. Or, as they put it in a recent interview, they are wholly uninterested in "...mercenaries who [would] kill for stock options."
I think we underplay the real long-term value and reward of the in-the-trenches learning one acquires while launching a startup. More and more articles are being written about how launching or being an early employee at a startup is a more relevant education than an MBA. The fear of starting a business is that you don't know what you're doing; but at a certain point in one's career, that's also the pull. Many people feel that they've begun mentally treading water around their mid-30s and feel an instinct to shake out the cobwebs. Or, they take on a topic that's endlessly fascinating to them; something they've always wanted to sink their teeth (and brains) into. Take Jack Dorsey's Square. The financial system was both complex and thorny enough to make unlocking it intellectually satisfying, since I have to assume the financial upside for existing billionaires can't possibly motivate as it would the truly hungry. For founders who are either in it to learn about the art of entrepreneurship, or to solve a problem that's been nagging at them for years, the best possible outcome ensures they continue to maximize their own learning.
In the end, whether you go public, get acquired, or stay private and profitable, you'll only truly be happy if you feel you've maximized your upside. The real challenge is in identifying the source of your upside early.