The “Only” Affliction
Over the years, we have worked with many advisors and investors who suffered from the Only Affliction. Whey they saw a buisiness that was producing anything less than a few hundred million in revenue, they would report to their partners that the company does “only $x million in sales.” Many of these people had never done anything entrepreneurial and most had never run a company. They had no idea how difficult it is to achieve even $1 million in revenue. They had no idea how much risk, how many odd tasks, how much ingenuity, how many sleepless nights it takes to get a business off the ground.
Trained to be Negative
Once an entrepreneur has done all the hard work to build a business, it is tempting to criticize the final product. Consultants are trained to find and fix problems. Private equity professionals are trained to look for ways to improve the businesses they are buying. And investment bankers are trained to anticipate all the objections potential buyers could make about the companies they are taking to market.
So often this training develops into an impulse to focus on the negative. They see businesses as having “only” so much revenue, “only” so many customers, “only” so many products in the pipeline, “only” a couple great engineers. Compounding the issue is that few of the professionals suffering from the Only Affliction have ever tried to grow a company, let alone build one from scratch. As such, they have little appreciation for the intensity of the effort required to create a profitable enterprise.
The principals of Bootstrap Capital have founded and run several businesses and appreciate all the skill and instinct that are necessary to build a business of any size, to employ and lead people and to deal with the myriad issues that pop up every day.
We don’t see businesses that are “only” so big. We see the achievements of the entrepreneurs who launched the companies. We respect the legacies they built and we seek to continue the great work they started.
Our experience is that these heritages are valuable assets of the companies we acquire. When we preserve and celebrate the cultures and histories of our portfolio companies, we are not just honoring the entrepreneurs and families from whom we purchased them. We are also protecting our investment. When we preserve the legacies of these businesses, we give purpose to our mission and get dividends in the form of employee focus and loyalty.
People suffering from the Only Affliction have difficulty seeing these benefits and instead focus on all the perceived shortcomings in these great companies.
When a business owner is seeking a true steward for his/her business, Bootstrap Capital can provide a great solution. A key factor in the path we set for our portfolio companies is the impact it will have on their cultures and the people who built them. Change is a fact of life, but it is important to us that it not unnecessarily impact the heritage, values and people that are key to a company’s success.