04/19/12

Putting exits into perspective

imageAre you also wondering about the sky-high valuations and exits some Silicon Valley companies are seeing for a little while now? Well, consider this a black swan - they are anomalies, outliers - but not the norm.

In Inc. Magazine's latest issue you find this neat little infographic - which is eye-opening: Only 2% of all private companies being sold in the time-period from 1995 to 2012 fetched more than $2 million. A whopping two thirds got sold for less than $250,000. And this doesn't take into account that a whole bunch of companies never make it.

Now - this is all not bad news. The challenge is - human bias is to believe that your startup can be the next Instagram. Which leads to behavior which values user growth over profits - and, unless you win the startup lottery (and your chances are probably as good as playing the lottery), will bite you in the backside.

So - just focus on building an amazing product which users love. The rest will come. Don't fret an exit. Ever. It will happen - or not. And if you do things right, it doesn't really mater.