Is it possible to "enchant" a potential buyer for your company?
It's a question I pondered when I saw down and talked with Guy Kawasaki, the former chief evangelist for Apple Inc., co-founder of Alltop.com, venture capitalist and the author of several books, including his latest, Enchantment: The Art of Changing Hearts, Minds and Actions.
Yesterday, he discussed ways to turn on, and off, buyers. Today, I raise the question about enchanting buyers.
Mr. Warrillow: Is it possible to apply the lessons in your book to have an acquirer fall in love with your business to a point they want to buy it?
Mr. Kawasaki: The goal of any company should be to enchant its customers. My recommendation is to build a great company with products that enchant customers, which would make it successful, which would make it attractive to for acquisition. This is different than building a company that enchants acquirers. Call me naive but I think acquirers like companies because customers like them.
Mr. Warrillow: So the first step is to have an enchanting product and the second step is to enchant customers…
Mr. Kawasaki: And the third step is to wait for the phone to ring. Companies are bought, not sold. Lots of entrepreneurs ask me, "How do we make people acquire us?" or "Do you know anyone in business development at Cisco, Google, Yahoo!" and I keep telling them that you don't sell a company. Google and Apple are getting 50 calls a day from people saying, "We have a strategic client who would fit in well with your portfolio and you should buy them." I don't think that works.
Mr. Warrillow: I agree, sort of. Let's use a dating analogy. If you walk up to a beautiful woman on the street and ask her out, she might say yes but, more likely, she will think you are a bit of a freak. What you want is for her to recognize you. Aren't there things a company can do to get on the radar of a potential acquirer?
Mr. Kawasaki: Yes, absolutely, but what I'm saying is, the key to being bought is building a great company – which is different than being sold. To me, "sold" means you call up a business broker or a boutique investment bank and you say, "My kids don't want the business, can you sell it?"
Special to The Globe and Mail
John Warrillow is a writer, speaker and angel investor in a number of start-up companies. He is the author of Built To Sell: Creating a Business That Can Thrive Without You, which will be released in April.