Exit Strategy

As this post is being written, we are in the final few weeks of scrambling to get all the incentives, paperwork, money, and innumerable other things lined up to complete my first business acquisition. By the time you read these words, the ink on the deal will be drying and the seller will be many dollars more wealthy (so will the lawyers), having successfully passed the baton to the next generation and earned a large payout for the many years of effort supporting employees families and providing value to the community. 

An interesting note when doing a transaction like this. Every party is not only concerned with what they get out of the deal, they're also thinking about risk. 

So what does "Exit Strategy" have to do with a business acquisition? It comes from the popular Netflix series Love, Death & Robots volume three titled Three Robots: Exit Strategies. "Three robots walk into the post apocalypse... and take a whirlwind tour of humankind's last attempts to save itself. "

"Come on! We've got science to do!!"

In the show: The "poor people" created survivalist camps and looked forward to the day they were free from government control (and government administered healthcare) so that they could self-determine their own future and live off the land. Unfortunately they overused their resources and self-imploded.

Sea-steading (like homesteading, but think of a fully sovereign nation state oil rig for tech millionaires) was a different attempt to utilize technology and fully automate the systems for survival by harvesting fish and sea greens. Unfortunately they were mean to early robots who eventually developed feelings. Having left  anyone with a skilled labour background, the technophiles could operate the technology, but did not have the skills in order to troubleshoot or fix broken parts. Ultimately their technology turned on them as it developed sentience and they could not survive.

Government leaders built themselves bunkers deep in the earth retreated to them in order to wait out the apocalypse.  A fungus wiped out their self-sustaining hydroponic system and they resorted to "extreme democracy." 

Did any humans anywhere survive all this?

No, but somehow a cat colony was established on Mars. Hey, it's a cartoon. 

It got us thinking about what we can do in order to stave off the apocalypse in our business. In order to succeed, we must first ensure survival and attempt to mitigate the risks that are ever present for a business. Inevitably, things will go wrong and we will be forced to make decisions. The key is to make ones that leave the most amount of optionality available. 

1. Always be focused on aligning incentives. Take care of our stakeholders (employees, and support team) and they will take care of our customers. By paying fair wages, creating a great working environment, and doing meaningful work, we can focus on our singular goal. 

2. Master the core skills and principles. Businesses are made up of people, systems, and products that solve a problem for the customer. By knowing exactly what value we are providing, we double down on the things that work and let go of attitudes and practices that not longer fit. 

3. "Flow like water." This saying from Bruce Lee has been a favorite for many years. Change is mandatory, survival is optional, choose wisely. By always learning from our mistakes and being creative in the face of constraints we diversify the risk factors. It also forces us to learn and to be thoughtful about the feedback we receive from customers as patterns emerge. 

And most importantly because we have assembled a great team. From the team that helped to put the deal together and put eyes on the due diligence. To the team that the seller has built and we have inherited. They can all trouble shoot problems when they inevitably come up and work together to create equitable solutions. By new ownership working side by side with the steady hands and minds that have built the business from an idea to a local pillar that employs 20 people and helps many more to access the vast Northern Ontario, we can give our team the best chance at an exit strategy in another twenty five years when it's time for the next generation to carry the torch.