“These Harvard students think they understand entrepreneurship, let’s see if they really do.” These were my final words to Sam (not his real name) as he and I walked into a recent class at Harvard Business School. I had taken Sam to Boston to participate in a Harvard Business School class discussion based on a case study I had written on his company. As we walked into the class Sam knew he was about to get a boatload of advice on his company and what he might do to increase its valuation.
When you subject yourself to the feedback of 80 hard-charging, wicked smart business school students, you better be wearing your thick skin. But Sam was ready; he was excited to tell the story of how his six-year-old company had grown into a profit-making machine. Sam knew he was nearing the end of his attention span in the business and it would soon be time to harvest his wealth and move on. He was excited to hear the students’ perspective on the sellability of his company. At the end of the class, Sam was encouraged by their feedback. Not only did they love the strong financials for his business, they loved that his business was dull. Yes … dull.
When one of the students referred to Sam’s business as dull, I looked at Sam to gauge his reaction. He seemed to be thinking, “Where do these know-it-all kids get off calling my successful business dull?” But as the class discussion continued, Sam realized that having his business called dull is a good thing, indeed, it’s a high compliment. A dull business is one flies under the radar screen, selling a product or service that is important to the customer, yet priced at the point that the customer will buy it without a whole lot of thought or price shopping. The ubiquitous example of a dull business is the porta-potty business. Dull is a wonderful thing in the sense that the business doesn’t face a lot of competition and it drives rather predictable results.
Sam’s business was an excellent case study for these Harvard Business School students who are evaluating the kinds of businesses they might want to acquire after graduation. While Sam’s business might not grow at a pace that would impress a venture capital investor, his business offers the kind of stability that banks love, and because of that, when Sam is ready to sell in a few years, he’ll get a strong valuation given the predictability of his cash flow. The infamous character Gordon Gekko said “greed is good”, but go to Harvard Business School and they’ll tell you the truth, it’s dull that is good. Every business owner needs to look at his/her business and see how they can make it a bit duller. Dull is good.
Tennessee Valley Group
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