Jackson Fish Market
Posted on April 21, 2009 by hillel on Industry

Sell or Sell Out?

Red Gate, a software company, has issued a challenge looking for small (or “micro”) ISVs to purchase. I think that’s great. If we had a bunch of cash lying around we’d probably buy some cool tiny software enterprises as well.

That said, I did catch this little nugget in their announcement. Among the criteria of what they’re looking for:

“You’ve got to have a product. We’re not interested in prototypes. You must have customers. Happy customers, who – ideally – are happy to give you money for what you’ve built.”

Now, buying a business that has happy paying customers makes a lot of sense to me for Red Gate. And I also understand that there are times when someone has a small business that’s generating cash but doesn’t have the ability to grow it themselves. That said, to me, one of the single hardest things to do is get over that initial hump of creating a business. Some people may say that this step is easy, but sitting here on the “before” side of that challenge it looks pretty hard to me. I can’t imagine getting over that hump and then deciding to immediately sell. I would imagine there are many ways to potentially grow your business once you’ve found a successful value proposition other than just selling out.

Maybe one day we’ll be on the other side of the equation and trying to convince small businesses to sell to us. That’s when we’ll ably represent the other side of the argument. But in the meantime, I say, if you’ve already done the hard part, why not take the next step yourself?

P.S. If you’d like to hear from small business founders who’ve already gotten over the hump in their own business, you may want to attend our new conference Small and Special. Check it out.

Join the discussion 2 Comments

  • Reply

    Marcelo Calbucci

    April 21, 2009 at 12:27 pm

    Here is the reason to sell after you just did the hard part: Because you like doing the hard part!

    The same way software developers enjoy building new features and they get bored once it goes into bug-fixing mode, some people might enjoy the thrill of building something from scratch and the journey of building it is the prize. After that it might get boring, even if it’s a money-printing machine.

  • Reply

    Hillel

    April 21, 2009 at 12:36 pm

    I understand wanting to focus on building and improving functionality. What I don’t understand is giving up the “money-printing machine”. That’s what let’s you have the freedom to spend all your time building new features.

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