People who start businesses can be fooled into thinking turn and burn, short term plans make them entrepreneurs. In this Tough Things First podcast, Ray Zinn dives into another great question from a ZinnStarter college student.
Rob Artigo: Once again, another question coming from San Jose State University, another great ZinnStarter student, and this student is asking, how do you build a company for the long term instead of building to be acquired?
Ray Zinn: We’ve talked about this before, but thank you for your question. Building it for the long term, it takes a different point of view. Whatever it is, whatever idea or concept you have, make sure it has legs, legs meaning that it has a chance to live or sustain itself beyond a couple of years.
Ray Zinn Cont: As statistics show, nine out of 10 companies fail within the first three years, and not only because they don’t have the money, but because their product doesn’t have legs. And so if your idea is to get in and get out, you can do that, but that’s not going to make you an entrepreneur. Entrepreneurs have legs. In other words, they have sustainability. They’re not just in it for the short term.
And so I would caution anyone who is considering starting a company: if they’re just doing it for the short term, I would suggest you keep your day job.
Rob Artigo: Yeah. And you had the idea that you wanted to not just build a company, but that you wanted to be part of it and run it for, well, make it your career. It was a long-term plan for you. Do you think that these folks should sit down and say, “Am I in this for one year, or am I trying to build something that I can look down the road 37 years from now,” like you did, “and say, ‘Wow, I did something pretty special here”?
Ray Zinn: Well, you know, what I did, I didn’t have a product idea like, I’m going to come up with this super-duper AI tool. And what I did is I said, “I want to build a company that lasts, that endures.” And so that was my idea. And I know that sounds strange.
And so what I did is I said, “Okay, I’m going to build an enduring company in the semiconductor industry.” That was the idea. It was not that I’m going to be coming up with this great patented, super-duper idea and run it out. It was really, my goal was to build an ideal company that could endure and do it in an industry that I was happy to be in and wanted to be in.
But I did not have a great product idea. I did not have a great concept of some patentable, fantastic, off-the-rails technology. It was, I wanted to build the ideal company in the semiconductor industry. That was my goal, and it worked out.
Rob Artigo: And in that process, you learned a lot of lessons, but how do you keep innovating over decades without losing focus as a company?
Ray Zinn: That should be part of your focus, is to keep innovating and keep improving. If you look at just over time how things have improved over time, you got to, as they say, move the cheese. You got to find out where the next move is, where do you pivot? And so you’re constantly innovating. You’re reading the tea leaves. You’re constantly looking at, “How can I keep my company viable and capable over the long term?” And so it is an ongoing, everyday, daily, innovative process to build an enduring company.
Rob Artigo: So for our listeners who want to build a lasting company like Micrel, I mean, you ran it for 37 years, and there’s no doubt nobody could argue that wasn’t a lasting company all the way up to the point of acquisition, and it still exists in some form today based on its history. So what should entrepreneurs who are trying to build a lasting company start doing this week that can help make sure that they have a lasting company?
Ray Zinn: Come up with the culture that you want to have in your company: the kind of people you want to hire, the kind of products you want to be into, the industry that you feel most comfortable in. Have that firmly in your mind before you launch.
Rob Artigo: There’s nothing wrong with writing it down, too. Sitting down and brainstorming your company culture and then applying it to however big your team is at the time.
Ray Zinn: Exactly. Document it.
Rob Artigo: Document it. And then maybe even put it on the wall somewhere and say, “Hey, what you get in the return is you get the feeling that you’re part of something, not just a cog in the wheel of some crazy machine.”
Ray Zinn: As they say, put it on the mirror in your bathroom.
Rob Artigo: Yeah. Put it on the mirror in your bathroom. Great, valuable perspective, Ray, especially in today’s hype-driven startup world. Thanks for the listeners tuning in to the Tough Things First podcast. If you’re building a company, ask yourself, are you building it to last? Drop your thoughts in the comments. Subscribe. Share this with the founder who needs to hear it. Perhaps you’re the one who needs to hear it, and that’s okay. We’ll see you next time here on the Tough Things First podcast where we do the tough things first, right, Ray?
Ray Zinn: Exactly. Go, tough things.
