Once upon a time, I made a rather significant investment in a start-up that was fashioned by a couple of near-40 year old, first-time entrepreneurs.
 
Nice guys, with a nice idea that I really cannot tell you without compromising their anonymity.
 
When we first began talking about the investment we were all on the same wavelength. We were all convinced that this was an idea with universal applicability  (inside its niche, of course), and that seemingly had no competition.
 
Furthermore, their early findings told me that we could indeed have a significant first-mover advantage in our marketplace. This was partially due to the fact that the inventor of the product had filed for patent protection, and at least one very prominent buyer had strongly indicated their willingness to sign a contract.
 
So, I remember thinking, “A potential home run. All we need do now is implement this first (and highly-referenceable) site while beginning an aggressive sales and marketing program en route to an insurmountable market share.”
 
“No big deal”, I remember thinking, “This has certainly been done before.”
 
The concerns in my mind were typical. “Will the first site come up smoothly and on-time?” And, “Can we actually generate the requisite dozen or so new prospects in the approximate fifteen months between our first and all subsequent contract signings?”
 
I also worried about the fact that these were two guys with no prior entrepreneurial experience, and as one of my immutables states: “If I meet an entrepreneur who hasn’t yet failed, then I know two things about that entrepreneur; first, he or she is going to fail, and, next, he or she is going to be a much more solid businessperson on the flip side of that failure.”
 
That’s right. My guys hadn’t yet failed. In fact, they hadn’t yet even tried.
 
Well, we talked everything through, and after some back and forth, we finally agreed upon an exit strategy (I try to never leave home without one) that called for a three – five year “run,” during which time we would sell and implement roughly 30-50 total client sites whose revenues would average about $1,000,000.00 per site/per year with margins in the 30-40% range.
 
Upon achieving this (or some similarly robust numbers), we would “flip” this business to some large player in the industry. We pledged to identify these potential buyers as part of the overall plan and before the end of our first year of operations.
 
But within six months of the date that we originally executed the shareholders agreements, I had already sold back my interest (40% ownership) in the partnership.
 
Those “Last Days of Pompeii” (that is, the “dissolution discussions”) were difficult to say the least. Nobody likes to be wrong.
 
But what it all came back to was the beginning. For it was at the beginning that we all fooled ourselves. (By the way, if you have not yet met the easiest person in the world to fool, go find a mirror.)
 
I was so enamored with the potential riches of the exit that I simply overlooked my own (33 years long) base of experience and assumed that these two first-time entrepreneurs were also in the hunt for a Big Score.
 
And they really thought that they were in it for the Big Score. In fact, it really wasn’t until after we had resigned ourselves to splitting up and going our own separate ways that they even admitted that they were really just “lifestyle entrepreneurs” - that is, guys who just wanted to “make a living” off of their work and were no more interested in a huge payday than they were in walking on hot coals!
 
The problem, of course, is that this Big Score exit strategy was the essence of our business. It was our “raison d’etre” and the basis of all future negotiations, strategies, and tactics related to the entire enterprise.
 
This was a true failure to communicate. I knew the price associated with building and selling a successful company because I had done it many times before. They, on the other hand, had no real idea what running a sophisticated enterprise would be like until they began to see it take shape. And it was at this point that they concluded that they just didn’t want to pay the price related to building and then running a multi-site, multi-employee, and ultra-complex enterprise.
 
And so our two ships simply passed in the night.