In today's business landscape, "build-to-sell" is becoming an increasingly popular mindset. However, as an entrepreneur who believes in the long-term value of building something meaningful, I find the build-to-sell culture deeply concerning. At its core, this approach prioritizes quick profits and exits rather than creating something sustainable and impactful.
This mentality is flawed because it reduces entrepreneurship to a short-term, transactional endeavour. Entrepreneurs who follow this model are often more concerned with flipping their businesses for profit within 3-5 years than building something that can make a lasting impact. This compromises not only their business but also the potential to innovate, disrupt, or revolutionize their industry.
As entrepreneurs, we should aim to build legacies, not just companies. We should strive to create businesses that contribute to the world, nurture industries, and enrich customer lives. In this article, I'll explain why the build-to-sell culture is harming entrepreneurship, and how we can shift our mindset to focus on long-term growth and innovation.
1. Care for Your Industry, Care for Your Customers
The foundation of any successful business is a genuine passion for your industry and a deep commitment to serving your customers. Build-to-sell culture, however, often disregards both of these elements. When businesses are created solely with the intention of selling, they prioritize profits over purpose, often neglecting the true needs of their customers.
Love Your Industry:
When you care about your industry, you're more likely to work tirelessly to improve it. Passion drives excellence, and passion for your industry gives you the motivation to continuously innovate and push boundaries. This passion will set you apart from those who are simply "in it for the money" and allow you to build something exceptional.
Love Your Customers:
Elon Musk once said, "You should aim to build a company where your customers want you to succeed." Building a business with your customers' needs at the forefront ensures long-term success. When your customers feel valued, they'll not only support your business, but they'll also become loyal advocates who help spread the word. Build-to-sell culture, unfortunately, often overlooks the importance of customer loyalty. By prioritizing your customers' well-being, you create a lasting business that thrives.
2. Who Truly Benefits from Build-to-Sell?
The truth is, it's not the entrepreneurs or the customers who benefit from build-to-sell culture. The true beneficiaries are the big corporations with purchasing power, the ones who can easily absorb smaller companies into their portfolios.
Businesses created with the intent to sell often get bought by larger, more established companies. These "empire businesses" have a long-term mindset that allows them to grow stronger with every acquisition. On the other hand, build-to-sell businesses, which lack long-term vision, are simply feeding into the strength of these larger players, and in doing so, they’re weakening their own future.
Understanding who truly benefits from this model is crucial. In the end, it’s the buyers who profit, while entrepreneurs and customers lose out on the potential of building something far more meaningful.
3. Undervaluing Business and Innovation
Let’s talk about the economic impact of the build-to-sell model. When there is an abundance of a product or service in the market, its value naturally decreases. This is simple supply and demand economics. The same holds true for businesses. When entrepreneurs adopt the build-to-sell approach, they flood the market with companies that are designed to be sold off in a few years.
This influx of "business-for-sale" models causes the overall value of businesses to drop. The result? More businesses, but at lower valuations. It turns entrepreneurship into a commodity, diminishing the true value of companies and discouraging long-term, sustainable growth.
The build-to-sell mindset isn’t just hurting individual entrepreneurs—it’s affecting the entire market. It lowers the perceived value of small businesses and stifles the potential of companies aiming to build something enduring.
4. Innovation and Thinking Beyond the 5-Year Horizon
One of the biggest drawbacks of the build-to-sell model is that it limits innovation. With a focus on a 3-5 year exit strategy, entrepreneurs aren't incentivized to think long-term or invest in significant innovation. Successful entrepreneurs understand that innovation requires time, and the ability to look far into the future is crucial to creating something truly groundbreaking.
By adopting the build-to-sell mentality, entrepreneurs stop thinking beyond the short-term. They limit their potential for innovation and miss out on the long-term opportunities that come from consistently looking ahead. The most successful businesses today—those that have stood the test of time—are built on visions that extend decades into the future.
To build a true empire, entrepreneurs need to break free from the constraints of the 5-year horizon and embrace long-term thinking. It's this mindset that drives sustained success and meaningful innovation.
Building Your Empire: A Call to Action and Personal Plea
It's time for a shift in mindset. Entrepreneurs should stop chasing quick exits and start focusing on building businesses that can last and thrive. Whether you're just starting out or have been in business for years, the goal should be the same: create something that makes a difference, adds value, and leaves a lasting legacy.
By caring for your industry, valuing your customers, and embracing long-term innovation, you’ll build a business that not only stands the test of time but also sets you on the path to truly revolutionary success.
So, to all entrepreneurs out there: stop building for the sale. Start building your empire. The world needs businesses with vision, and the future belongs to those who are willing to invest in it.
Kieran Audsley
Founderli CEO, Founder
