Successful entrepreneurs – How to sell your business to Microsoft

An excellent evening last night hosted by the wealth management division of an international bank, at which two entrepreneurs talked about how they built successful businesses.

Firstly, Sean Phelan, founder of Multimap in 1995, talked about how he foresaw the convergence of mobile phones, GPS data and the internet and set up Multimap to exploit the convergence. He varied the business model along the way when he couldn’t get mobile phone networks to show any interest and this led to Multimap becoming a website-led service. The business grew strongly as Sean looked to cash in some of the wealth he’d created by seeking a minority investor in 2007. He eventually sold the business entirely to Microsoft in December 2007.

Next, Michael Acton-Smith, co-founder of online retailer Firebox discussed the challenges of being first to market. “We noticed there weren’t any competitors on the internet. Unfortunately, there weren’t any customers either”. Michael spoke about persevering if you know something is right and that a market is coming. However, he also talked about how Firebox raised £500k from VCs, took on too many highly paid staff and made a loss of £400k the following year. Realising the error of his ways he then downsized the team and went on to make £400k profit the following year.

The key messages we took from the excellent speakers were:
1. Be patient – many business plans talk about an exit after year 3 or 5 but in most cases it takes much longer than that; 12 years in Multilmap’s case.
2. Review and modify your business plan as you gather more information. If something’s not going to work, change it before its too late, but make sure it’s not that you’re just too early!
3. Keep an eye on your costs – sound obvious but don’t get carried away by having a pile of cash from investors.
4. If you can sell to Microsoft, then do! Sean didn’t reveal the sale value but we suspect it wasn’t trivial! Microsoft are good payers!