A smart entrepreneur has to know when the game is getting too aggressive for their own good. I don’t mean the competition, or their marketing prowess, I mean that the industry is busy blowing up a bubble it has built and now it is ready to burst. For instance, recently there was just far too much money being thrown at the alternative energy sector, the money was going to businesses which were completely unviable with technology that wasn’t feasible, reliable, and therefore there was no profit in the future.
Sure, it makes sense that if the government is giving away money to get in line, but even those hedge funds and big players that are politically connected in a crony capitalism sort of way knew it was time to get out. The same thing happened in 2000 when the dot com bubble crashed, everyone who was in the know realized that the IPOs were delivering millions of dollars to companies that had never made a profit, and might never in the future. Things were getting too ridiculous, the money was coming too fast and feverishly to be reality-based. Obviously that can’t last in a free-market.
Perhaps the trick is to build up the business the best you can and sell it at the top of the market before everything crashes. Many people were buying and flipping houses as fast as they could before everything imploded if you’ll recall. Those that didn’t plan their strategy correct ended up with a bankrupt-able situation. Is it fair to play at the top of the bubble and then sell your company to some unsuspecting wannabe entrepreneur that has no brains, and too much money for their own good?
Sometimes, I question the ethical nature of such a strategy, but a good and smart entrepreneur knows when it’s time to get out, they can see the writing on the walls if they have a pulse on the finger of the industry, and every good entrepreneur should. Sure, some people just have dumb luck due to good timing, and it is true that timing is everything. Being in the right place at the right time as the bubble is building can deliver a beautiful bonanza if you get out before the bubble bursts.
So, when was the last time you really looked into your industry and the validity of its ongoing aggressive growth? If it’s not viable, or things have heated up too quickly, you might want to think about developing a decent exit strategy so you aren’t left holding the bag. That’s all I’m saying here. And I hope you will please consider all this and think on it.