what's your exit strategy?

What's your hot thing? If you are an optimistic entrepreneur, you need to plan for the inevitable shakeout. Although one third of you believe that success is imminent, we know the real probabilities. Therefore, consider the following and suppose a worst-case scenario for a moment.

"the law of nemesis" nothing good lasts indefinitely because others
will want to share it

the Boom and Bust :
attractive profits and futures attract more competition than the market can support and a bust ensues.
The bust may be triggered by :

1. excess capacity
2. disappointing growth
3. emergence of a dominant design (ex. 5-1/4 to 3-1/2 inch disk drives)
4. scarce resources (ex. copper building materials)

There is also a Seismic shift syndrome that happens to older, settled markets and is triggered by :
-deregulation : the protective entrance barriers are removed (patents, tarrifs, controlled monopolies)
-globalization : Toyota went global long before GM
-a compentency predator : Wal-Mart's distribution model couple with groceries allows and easy and dominant shift into grocery retail

Surviving companies are either : Adaptive Survivors or Agressive Amalgamators.
An adaptive survivor can differentiate their product to meet expanded customer's needs.
An amalgamator acquires smaller firms, reduces costs of redundancies, and grows the economies of scale.

In the HBR article "Strategies for Surviving a Shakeout" by George S. Day, his research shows that while all entrants can't survive, the only way to lose is to stay in too long and be evaporated or get out too early and not maximize the value of the company. If you don't have endless capital to reinvent the company multiple times throughout the shakeout or your investors are calling for major cost cutting prior to being the established standard, then consider your exit stategy. Ideally, a company should wait for the amalgamator's to have confidence in their acquisition strategy; at this time, they will pay the greatest price for your asset.