Image by Ana Santos via Flickr
Yesterday, Dave Gion joined us as the speaker for our monthly BIZ networking event. Dave told a great story about his trials and tribulations in spinning a product out of the Weitz Construction company and forming his own company, Canvis, LLC. Dave provided the audience with a series of lessons learned dealing specifically with the spin-out issues.
What made Dave’s presentation especially interesting is his background. This is not the first company Dave has started. Dave is a serial entrepreneur who has been through traditional start-ups in the past. Because of this, Dave brings the perspective of someone who knows how startups work. Much of what Dave related were hard learned lessons he did not expect going into this spin-out.
For me, the most important lesson to be taken from this is the difference in pace and perspective the various parties have in a spin-out. Depending on the company you are spinning the product out from, the motivations are widely divergent. The entrepreneur is looking to get the product spun out and the company up and moving. The management of the company which the product is being spun from is another story. The people in this role have a duty to make sure they get the most from the divestiture. They must determine the value and the terms of sale. They must deal with the contracts and issues that arise. For many, this is new territory and their tendency is to move slow. The entrepreneur needs to remember that:
- S/he must set the agenda
- S/he must drive the schedule
- S/he must manage all of the action items to completion
- S/he is not the center of the universe for the rest of the parties
Finally remember that the entrepreneur must continually assess the value of the deal. As these transactions take far more time than desired, the value of the product being spun out may change substantially during the process.