Gary Crocker is speaking at the Utah Technology Council breakfast on building sustainable businesses (in Utah specifically, but the remarks are more general). Gary speaks of several companies that have started in Utah but later moved to other places.

Gary talked about Jim Sorenson calling him and asking him to help him sell his company (Sorenson Research). He doesn't think that had to happen. He thinks that as a leader in fundamental niche (continuous blood pressure monitors) the company could have stayed and grown in Utah.

He tells another story of Ballard Medical selling and the eventual closing of the Draper facility and the jobs being lost. While these exits may be financially good for the founders, they're not good for Utah. What does it take to build sustainable businesses in Utah that can grow and prosper, give the founders good returns, but also keep jobs, technology, and influence in Utah.

Gary asks what financial and cultural characteristics help to create a sustainable business? He gives nine value-maximization and sustainability concepts.

1. Identify, as an explicit part of the business plan, a desire to avoid an early financial exit. Build a sustainable franchise, not a financial play.
2. Hire only those team members whose own internalized goal is to build something that matters. This reminds me of Guy Kawasaki's advice to "build meaning." Many people yearn to do something important with their lives. Find them and hire them. If you take care of this, the financial rewards will come.
3. Invest in those employees committed to long term value creation with long term equity incentives. "Greed in moderation." Reward empowered teams that disdain politicalization and demands product-focused results. "Culture matters." People who aren't focused on "building their career" and are focused on building meaning will deliver results. Start with this and your culture will attract the right kinds of people.
4. Prior to every funding round, identify the value creation events your team must attain to raise funds for the subsequent funding round. Sustainable, long-term players raise money after already having identified the strategy for raising the next round. This ensures you'll spend the money your raise on the right things. Capital planning is a whoafully missing skill in many companies. "If you're not focused on the next round, the current round simply gives you enough money to fail gloriously." This is a lot of work.
5. The CEO and CFO must select financial equity partners who share your long-term commitment to creating exceptional and sustainable institutions--not simply generating short term financial returns. Cultivate your relationships with these partners years before you need them. This takes a lot of time and planning, but if you're going to be sustainable, you need partners who's equity vision is consistent with your own. "Be cautious of those who run OPM." Many funds will force you to exit long before you're ready. Ask "what is the strategic cost of taking this investment?"
6. As part of each funding round, pre-identify which visionary investors will be required to fund the subsequent funding round. Pre-position your value creation vision. Have a schedule for visiting them years before you need their money.
7. Carefully optimize the long term tradeoffs between partnering asset dilution and financial equity dilution--before of "validating partnerships." If you partner an asset, it really isn't your asset anymore to some degree and capital investors will perceive it as not being your asset and will discount it accordingly. If you don't control your value chain, someone else will and they will gain the benefit. Control every part of the value chain of your product. There are substantive costs to "non-dilutive, no cost" partnering. Big company "partners" are seen as "validating" but can be costly. By "assets" include things like "global sales rights," "exclusives," and so on as well as physical and IP assets.
8. Create and insist on a "humble" corporate cultere--be pragmatic and realistic about your capabilities and competitive realities. Understand how your bandwidth and capabilities compare with those of your competitors.
9. It is not about you, it is about the product and long term job and value creation. If you're building something that is long-lasting and sustainable, then you eventually won't be there. It's about product and culture that will long outlast you.

Some ideas from the Q&A session afterwards.

• Build a firm that is growing and you will have all the assets needed to be around long-term. You'll have your currency. Acquire others, don't let them acquire you.
• Even in this tough capital environment, there are partners who will invest and be good advisors. You need BHAG goals. Be audacious and there are people who will invest in the idea. Don't think too small.
• If you want to keep the company in a particular location, hire people who want to live in that place. Kepe a consistent culture.
• Think sustainable from the very first time you start building your business model. Don't try to retrofit it later--it's tough.