It's a big part of entrepreneurial folklore -- you start a company, you grow it, and if you are lucky, you sell out and ride off into the sunset rich and happy. But, stop the movie. Rewind. From my experience, it doesn't always work like that.
In 1995 I left a career in law and my brother a career in investment banking to open the UK's first U.S.-style coffee bar chain. We didn't start it because we always wanted to be entrepreneurs (at least I didn't--my brother Bobby had more of an entrepreneurial yearning) but because on a trip to New York, I came across skinny lattes and fat free muffins for the first time in a coffee bar called New World Coffee. When I returned home, I couldn't believe we didn't have them in London. And thus was planted the seed of a business idea.
From that first coffee bar, it took us five incredible, adventurous and mostly joyous -- give or take quite a few wanting-to-pull-our-hair-out mistakes and failures -- years to grow to 110 stores nationwide and a national brand.
Our success coincided with the dot com bubble of the late 1990s. Stories of big exits, easy and almost overnight riches were in the air. It also coincided with the business we had grown from our mum's kitchen radically changing personality. From baby to adult, our clueless startup, full of passion and chutzpah, became more of a corporate business with a market cap of £30m, management structures, and rules and procedures.
So, thanks to the feeling of alienation that happens when the baby you have brought into the world grows up, compounded by the then much-accepted myth that entrepreneurs have a sell-by date and are not equipped to run businesses after they have started them, we did what was expected of us: We handed the business over to the 'grown ups'.
I remember exactly the day when I resigned from the many directorships and responsibilities I had. In a way I was glad to be no longer part of it -- entrepreneurs do get tired of their businesses, the day-in, day-out relentlessness of it -- but that sense of relief was very short-lived.
The following morning I felt a sense of emptiness, of loss. I didn't know it at the time, but now I have read a lot about it, and I know I am far from a unique case. For many entrepreneurs, leaving businesses they start is like bereavement. You were doing something you absolutely loved. It was a part of you, not just work but your life. And moreover, you built that business from scratch, every detail fussed over, literally brick by brick through blood, sweat and tears. And then, in a day, just by signing some documents, you cut it out of your life.
Here's a word of warning to those dreaming of a big exit: for many entrepreneurs, no amount of money fills that hole. The late Dame Anita Roddick, who founded the Body Shop, knew exactly how I felt. She told me there was an umbilical cord founders have with their businesses.
Cut the cord at your peril
Of course, I am not implying that there should be no succession planning and that founders positions shouldn't change as their businesses evolve. Quite understandably many founders don't want to and/or are not equipped to deal with their businesses as they scale. There is indeed huge merit in hiring a good CEO.
But good being the operative word. A good CEO would see the benefit of keeping the founders close, of having access to their intuitive connection with the business. Because the business will be poorer without the passion and the intimate knowledge the founder has of the customer and every detail of the brand. After we left, our company didn't weather the storm of the huge coffee bar boom that hit the UK. It's still around, but nothing like the company we left.
I'm not sure we had the magic bullet that could have averted its decline. But as founders we had passion, enormous attention to detail and, yes, maybe the umbilical cord, and it was foolish to cut it and ride into the sunset.