So you’ve had a few dates with the elephant – and the elephant wants to get serious with you. What you have (whether IP, industry knowledge, technology expertise or vision) is very attractive to the elephant – and the elephant has developed their vision on how you can help them grow their existing business or break into a new market.
Just like real people dating, you may be considering holding off embracing the elephant – playing hard to get – whether because you are unsure you really want to get married (are having second thoughts) or you are just angling for a larger dowry.
Two key points to consider is what the elephant views as “alternatives” – such as your competitors or developing in house – and who the elephant “feels” about you and your management team. The former is all about the data – evaluating the costs of the different alternatives and the lost revenue opportunity due to delays from pursuing alternatives – and the latter is all about the difficulties that create real and substantial costs when getting in a relationship with a “difficult” management team.
For alternatives, you really need to know, and objectively evaluate, what the elephant’s alternatives are – and what the elephant believes the alternatives mean (not what you believe the alternatives mean). Do you have competitors with comparable technology and expertise the elephant can readily start talking with? Do you have technology and expertise that the elephant – given time – cannot readily develop internally – and is your view on this the same view the elephant is likely to have? You need to be very good at introspection – or have an objective outside view - to really gauge the risk you take of the elephant pursuing alternatives if you play hard to get.
How key executives within the elephant “feel” about you is much harder to manage and foresee. A few words at the wrong time with the wrong person can create a naysayer within the elephant creating doubt that results in the elephant looking elsewhere. Is some or your management team less emphatic, abrasive, or downright volatile? How do you manage them during a due diligence process with the elephant?
Recall a prior post where I talked about the downside of an aborted marriage – where the elephant looks elsewhere – and then becomes your largest competitor. Playing hard to get can – and does at times – result in a great opportunity to reap financial rewards turning into a nightmare (recall Yahoo turning down Microsoft’s $33 per share offer).
I am soon off on five weeks’ vacation – on a boat where I am totally disconnected from the net. That said, this post was on a delayed trigger, so I have already been gone for two weeks – and will be back in just another three weeks. There is also some chance I’ll write another post in the next few days before I get on the boat so there will be just a two week gap in my postings. Time will tell. So see you (virtually) in early August – when I hope to cover the next chapter in Marrying the Elephant – “The Wedding”.