Momentum Podcast: 151
The Silence Of Success
by Alex Charfen
There's a very high percentage of business owners today that are starting their companies looking for an exit strategy.
I am consistently surprised at how often “exit strategy” comes up in conversations with relatively inexperienced entrepreneurs. Entrepreneurs who are barely getting started are already looking for a way out.
This is about the most difficult way to start a business and it may make it impossible.
Growing a company is one of the most difficult things any person can choose to do in their lifetimes. When you get into business trying to stop, you add unnecessary constraints that may freeze you in place.
On top of that, exits aren't all they are cracked up to be. Take it from someone who has been there.
The silence of success is deafening.
Full Audio Transcript
I'm Alex Charfen and this is the momentum podcast. Made for empire builders, game changers, trailblazers, sharp takers, record breakers, world makers, and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules but only so we can bend them, break them, then rewrite them around our own will. We don't accept our destiny, we define it. We don't understand defeat because you only loose if you stop; and we don't know how.
While the rest of the world strives for average and clings desperately to the status quo; we are the minority, the few, who are willing to hallucinate there could be a better future and instead of just day dreaming of could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters. Clearly the most important people in the world because entrepreneurs are the only source of consistent positive human evolution and we always will be.
The silence of success. There's a new phenomenon with entrepreneurs today with people who are getting into business. They often talk about their business or getting in to business in terms of an exit strategy. In fact, it's rare these days that I talk to somebody who's starting a business or thinking about business and isn't discussing, like "how I'm gonna exit?" "how are they gonna sell the company?" "What is the exit strategy gonna be?". It's kinda weird, it's like a prenup for a business, like starting a business is one of the hardest things you will ever do in your life.
Successfully making that business profitable, is one of the most arduous and painstaking, spiritual events that a person ever has. You have to give a ton of yourself to make a business make money. And for some people especially those who won't start without an exit strategy, you are just holding yourselves back. Because the fact is that an exit strategy in selling your business may seem like the greatest thing you could ever do but take it from someone who's been there. There is a silence to the level of success that comes with selling your business that is near overwhelming. It can absolutely catch you off guard and knock you sideways because here's what happens when you exit your business.
Here's what happens when you sell your business, here's what no one tells you about; the day you exit, the day you sell, the day that you move on, all of the significance you are getting from your business, all of the certainty were getting from your business, all of the variety, all of the passion, all of the energy you gave it, all of the energy you were getting from the people in the company; all goes away, all at once. It is literally overwhelming.
When I was in my early thirties, I sold a business that had grown to over a dozen offices and dozens of people and it was over $250 million dollars on our biggest year and on a day to day basis I had an endless stream of phone calls and inquires and people wanting to do business and questions and things that I had to handle and I was in it, I was in the mix, I was running the business and I wanted to sell it, and I wanted to sell it, I didn't want to run it any more. I wanted out of it. So, shopping around for buyers and I found some people, who were willing to pay me enough, that I just was willing to walk away. Because I felt like at that time all I wanted to do was get out of the pain that I was in, in running the business. I wanted to have exit, I wanted to have the money. So I cut a deal with somebody and I sold my company. And as the date of the sale drew closer, I got more and more excited to finally have this success, to finally have this big check cut to me, to put the money in the bank, to have the success of being an entrepreneur who had successfully grown a company and exited it.
And I can remember on the count down to the days, thinking like "I won't have to take these calls anymore", "I won't have to write these emails anymore", "I'll never have to be in this meeting again" and all of it felt like such a celebration in my mind. And then the week of the sale I remember, you know, finishing everything up, making sure everything was in the right place, getting all of the contracts, the paperwork, the transfer in place, everything ready in order to move on. And then it happened, I sold my company ... and everything went away.
What followed was the most overwhelming silence of my life. On one day, I was getting calls from people internationally; I was called from some of the largest retailers in the country; I was consulting with people who were writing checks for multimillion dollars; I was cutting massive deals; I was helping company's become part of an industry. And from one day to the next, it all went away. I remember waking up the morning after I sold my consultancy and feeling this overwhelming panic, in the silence. It was in that moment I realized, like, nobody needed me, nobody needed anything from me. I was functionally retired at like 32 and I didn't really have to work, I didn't really have to do anything. I should have felt free, I should have felt like I could have what I wanted, do what I wanted, it should have felt like thee most successful thing that ever happened to me. It should have been an event that I celebrated but instead I was functionally and completely panicked.
I had intended to retire, and I tried for a couple of weeks. I tried to go around the house and ask Cadey what we should do, I tried to look at my real estate portfolio and get excited about it, I tried to read books, I tried to go on walks. Everything I did felt complete and totally hollow and empty. It was overwhelming. It was overwhelming how insignificant I felt, it was overwhelming how little I was needed anymore, it was overwhelming how everything that was going on the day before stopped, the day that the deal closed.
Sure, I got a call here and there asking about transferring something or changing something and yes there was still inquires that I answered every once in a while, but no one truly needed me anymore and I didn't have that place to belong, that place to contribute, that place to make things happen, that place to show who I was. And within just a few weeks I was in a real estate investment seminar; and within a few months I was buying and selling dozens of houses in South Florida; And within a couple of years Cadey and I were the largest or one of the largest home buyers in South Florida because I couldn't take the silence of success.
I'm an evolutionary hunter, I have to be on the hunt. The day the hunt was over it felt like I was dying. And it's not just me. A few years ago Cadey and I were up in Canada at a learning event at an organization that I did not do well with. I was very frustrated at the event but the guy across the table from me was a lot more frustrated than I was. And I remember talking to him early in the morning and he just didn't seem like everything was okay. And finally we had a break and I said "so, hey man, tell me about yourself, what's going on?" And he said "well, I built a software is a service company in video for the past seven years, I sold it last Friday for a 120 million dollars, and I am trying to figure out what the "F" to do with my life". And I looked at him and I knew exactly what he was talking about.
I shared my story with him of selling my company and he got emotional because it exactly how he was feeling. He had gone from a 120 million dollars an entire team of people talking to him, calling him, needing him, and counting on him for their success, and their progress, and their momentum. To having a massive check in the bank and a huge bank account but no one really needing him. And I think that ever entrepreneur has this fantasy that if we finally put enough money in a bank account we won't need everything else anymore, we won't need the energy, we won't need the stimulation, we won't need the team, or the organization. We can just stop, sit back, relax, do whatever we want and I've got news for you, it just doesn't happen.
If you are an entrepreneurial personality type, if you are an evolutionary hunter you will always be on the hunt. It doesn't matter what you accomplish or what you achieve, you will always want to go forward, move forward and grow, and that's why I believe there are companies out there that have never been sold. When I look at monster cable Noel Lee, who I worked directly with, who is crazy by the way, but would never sell his company because it is who he is. When I look at the Bose family, one of the largest privately held corporations in the world, they haven't sold because it's who that family is. The reason John Walton's still involved with Wal-Mart is because it's part of a family dynasty that they still are involved with on a day to day basis. And so there are companies, some businesses that are so incredible, so earth changing, so paradigm shifting, that they should never be sold.
And so before you go into your business focused on your exit, I want you to consider something. What if you built the business so that you could run it for the rest of your life? And then have your kids run it or have someone else run it and keep running and have that business be your legacy. Because there's a big difference between an organization that is thriving and helping people and making things happen and changing outcomes in the world and having a huge bank account. See bank accounts don't require your attention, bank accounts don't really need anything from you, bank accounts just sit there and yeah, you can have some fun managing your money and maybe invest a little bit of it and do something else. But if your anything like me, you'll take the money in the bank account and do something to create momentum with it; and I have been doing this a long time.
I've helped a lot of entrepreneurs with exits. I used to help evaluate companies for purchase and for sale. I have helped friends of mine with tens of millions up to hundreds of millions in exits and the fact is, I have never seen an exit big enough that it replaced the energy of owning the company for the entrepreneur. I've never seen an exit significant enough that it didn't cause the entrepreneur crazy amounts of panic and anxiety the day that they sold their company and I have never seen an exit that was enough to make an entrepreneur feel like they didn't have to do something else.
So I realize today, there's like some script in the entrepreneurial playbook that says you should be thinking about your exit. But I have another way for you to look at it, why don't you think about building a company that you'd be proud to own forever, why don't you think about building a company that could exist for ever, why don't you think about building a company that you wouldn't ever exit for any reason because if you want the highest valuation possible, build your company like that and you will create massive value in it.
But if your getting in the business to get out, if your getting in the business with your mind on your exit strategy, if your starting your company with plans of getting out of it; I have a suggestion for you. Don't start. Do something else. You're not in it for the right reasons because building a company isn't just about making money. Building a company isn't just about the potential exit. Building a company is a way for you to show who you are in the world, for you to prove what your capable of in the world, and for you to leave the dent in the universe you've always known you should. And if you build a company for that reason, whether you want to keep it or exit or do anything with it in the future, you will have far more options than the entrepreneur who got in signing the prenup of getting ready to sell the company before they ever opened it.
It might seem like the ultimate goal for entrepreneurs is that big exit, that sale, that ability to just move on. But I want you to know that the silence of that level of success is deafening and if your running a company that you are proud of and are excited about and you know you are making a difference in the world, maybe it's one of those organizations that you should never sell and let it become your legacy. If your building exactly that type of company, we should talk. I help entrepreneurs who have seven figure businesses create the infrastructure and the systems so you can get to eight figures and beyond. If your ready to build the team and the organization that can get you there, reach out to us. I'd love to talk to you.