Startups: Build to Sell, or Not?

I was at a prominent internet startup event in New York City last November, where one of the guest speakers was Justin Day, the Chief Technology Officer of huge web success story, blip.tv. He said that one should NOT build a web business with the goal of selling it, using himself and his friends as successful prototypes of that philosophy.

Blip.tv hosts the independent web shows of tens of thousands and is valued at over $3billion. So they definitely are successful and power to Day and the rest of his team.

But they are geeks…

And the reason I mention this is because my belief is that the answer to the question: “to build to sell, or not?” is: “it depends who you are”!

Day is somebody who comes from a technological background, as does Mark Zuckerberg of Facebook and many other web success stories. These guys, and I employ over a dozen of their type at KAYWEB, are stimulated by a technological challenge.

Coding to them is like ice cream to a child, like cocaine to Tony Montana, like beer to Homer Simpson, like sex to Russell Brand, and like pizza to me.

Mastering the code of an internet project is achievement enough to most of these types. Therefore “building to sell” is the farthest thing from their minds.

The rest of us who are likely to be involved in web projects are entrepreneurs. For us, our programmers mastering the code is just the start. We want to have fun, and make money so we have more fun, with more projects and challenges.

Web business projects like YouTube, LinkedIn and Groupon will make money and scale to a degree. But the reason they get acquired by larger companies, or have a strategy to go public, is because that is where the bulk of their reward for an outstanding web project will come.

An entrepreneur can only take a business so far. There will always come a time that someone larger, better-equipped should take over and pay top dollar for that right.

For our types, “building to sell” is not such a bad idea, as you would plan your growth and sell at the right time, having assessed all your options.

Again, my answer to the question: “to build to sell, or not?” is: “it depends who you are”!