Tuesday, August 22, 2006

Soul Owner

7 Rules For Going Solo is a quickie article from the founder of Clif Bar on the benefits of entirely owning your own company (as opposed to partnerships, venture capital or IPO), but the part I'd like to hear more about is this:
"Nearly five years ago, I came within hours of selling Clif Bar Inc., the energy and nutrition foods company I had co-founded, for $120 million. Instead, I chose to buy out a 50 percent partner and go it alone."
So he left $60 million sitting on the table (I'm assuming half of the sale proceeds) and decided to go into huge debt to take full control of the company instead? Dude must really love his job. I did some googling and found this more detailed account of his decision:
He told his parents, his friends, his wife. They all supported him. They all knew he wasn't being honest with himself. As he waited to sign the contract that would make him rich, Erickson started to shake. He couldn't breathe. He took a walk around the block and began to weep.

"I felt in my gut, 'I'm not done,' " he writes in his book, and then, "I don't have to do this." He felt free "instantly." Back at the office, he told his partner, "Send them home. I can't sell the company."

It was a bet-the-company move. He needed $80 million to buy out his partner and service the debt. Clif Bar had to grow fast to handle it. He took back the CEO reins from his partner and ran Clif Bar for four years.

2 comments:

Apple said...

Yeeesh! When you feel in your gut that you're doing the right thing, then do it. What if he signed that contract? He would have spent the rest of his life very rich but with nothing to look forward to every morning.

Jeremy said...

I'm not saying that following his gut was a bad call. I admire his determination and sense of personal ownership.

BUT, I don't believe that someone driven and creative like he apparently is would ever wake up rich and bored. He'd use the money and time to continue all kinds of interesting work, much of which he's already started -- philanthropy, environmental projects, community organizations -- and it would almost certainly enable him to start new ventures in any field.

It surprises me that his past business held so much sway in his decision-making process about his future, especially given the main factors at the time.

This is also not a "normal" company (focused only on profits), which makes me wonder if the authenticity and uncompromising principles he brought to the organization made it that much harder to leave it all behind. His level of personal investment way way beyond the usual financial stakes.

Actually, he reveals the main problem in the end of that USA Today article: "But he still gets his best ideas while riding his bike for hours because he can listen to his gut. When he prepared to sell the company, he hadn't been riding. 'This meant I wasn't listening,' he says." I can SO relate to that -- riding my bike serves the same function in my life as well.