Five questions define a startup's North Star: what you do, who needs it, why they care, when you'll sell, and for how much. Apply the same questions to your ideal acquirer to make sure your vision and exit strategy actually align.
So when you talk about the North Star in the startup lifecycle, it sounds like the North Star is the acquisition.
Yeah, the North Star is more than that. The North Star is, if you break down the North Star, it is first, what is your company? The what, right? And that's description, feature, benefit. And then the next one is the who, and that's your ideal customer profile and your ideal persona. That's the who. So the what and the who, and then the why, which is why should a customer even care about you? You know, what is the driving force of this customer caring about what it is that you're selling in the first place? And the when, which is when approximately are you thinking about selling your company? And the how much, the how, which is how much do you think you're going to be selling it for when that happens? It's okay if these things are rough, but you need to have something that you can work on over time so that you, so you get closer to refining where that target is, where the center of that target actually is. So that, like, that probably will be a really important component in anybody that's building their business to start out with. So you have your what, Description, feature, benefit, your who, who is going to buy your product, the why, why should anybody care, the when, when do you think you're going to be able to sell your company, and the how much, how much do you think you're going to be able to sell your company for? The crazy thing is that those are the exact same questions you want to ask for your ideal profile. What is the customer's, the acquirer selling? Who are they selling that to? Like, who are the people? Why are these people buying those products or services? And then you have to ask yourself, when am I going to be able to sell a product and how much am I going to sell my product for? So that North Star set of 5 is the same questions you ask when you're defining your company and when you're defining your acquirer. And that's intentional because they should connect, right? They should connect. And if they do connect, then you're on the right path and you can start marching down that road. But if haven't even done that. I mean, imagine trying to leave your house without knowing where you're going, how much fuel you're going to need. You don't have a map, you don't have a GPS. You could wander around forever and never get to your destination. That's what it's like to build a company without a North Star.
Yeah, it almost, it's almost like even if you get to the exit, you're like, oops, we did it.
Yeah, it was like accidental.
It's like, oh, what a happy accident.
Yeah, I think a lot of them are accidental, but when you think about the process of acquisitions, all the deals that I've done, It's always like a partnership and then you get some funding and then you do an acquisition, right? People are looking for 3 things when they want to buy a company. They're looking for culture fit, tech fit, and customer fit. Those 3 things happen over time and by doing business together. That's why I do it the way I do it. Partnership is culture fit and technology fit, right? Because you're selling the customer and And the technology and everything. And by working with them in a partnership, you're getting the culture fit. So you got the culture fit, the customer fit, everything's set up. You move into a round of funding just to test them, just to see if they're serious. If they do that, then you know you got a serious deal on your hands and then you can move to a transaction.
