Jeff Seibert: Acquisitions: Lessons from All Sides [Entire Talk] | Summary and Q&A

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October 16, 2015
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Stanford eCorner
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Jeff Seibert: Acquisitions: Lessons from All Sides [Entire Talk]

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Summary

In this talk, the speaker shares his experiences with acquisitions, specifically selling his startup Increo to Box and Crashlytics to Twitter. He discusses the lessons learned from his startup journeys and provides insights from his perspective as an advisor for Twitter's acquisitions.

Questions & Answers

Q: What was the speaker's role in Twitter prior to the talk?

The speaker was in charge of Twitter's consumer products, including the Twitter product and leading the Moments launch.

Q: What was Increo and what was its concept?

Increo was a startup focused on idea sharing and collaboration. Their concept was to build tools that would help people, whether freelancers or within companies, share and improve their ideas through feedback and iteration.

Q: How did Increo initially struggle to grow its user base?

While the product appealed to freelancers, it had difficulty expanding beyond that market. Increo managed to gain a customer base of about 20,000 freelancers but struggled to grow further.

Q: How did Increo eventually find a path forward for the company?

Increo identified the most valuable aspect of their company as the technology they built for document conversion. They pitched partnerships with other companies to power their document conversion and display and managed to secure four acquisition offers.

Q: How did Increo decide which acquisition offer to accept?

Increo weighed the pros and cons of each offer. They considered factors such as company scale, culture fit, technology compatibility, and investment commitment. Ultimately, they chose to partner with Box due to strategic alignment and the cultural fit.

Q: How did Crashlytics gain traction and differentiate itself in the market?

Crashlytics solved a real need for app developers with its crash reporting tool. The product appealed to developers and gained popularity through word-of-mouth and positive feedback. Crashlytics grew rapidly, serving thousands of apps and becoming a respected solution in the industry.

Q: How did Twitter become interested in acquiring Crashlytics?

Twitter recognized the value of Crashlytics' technology and its strategic alignment with their vision of improving their developer platform. Twitter saw Crashlytics as part of a new wave of developer tools and believed they could leverage it to build upon their existing platform.

Q: What were some considerations in negotiating the acquisition deal with Twitter?

The Crashlytics team considered strategic alignment, product need, reputation among developers, opportunity cost, funding alternatives, and reporting structure. They made sure to negotiate from a strong position, retain control over the messaging, and prioritize the team's trust and financial security.

Q: How has Twitter managed its acquisitions in terms of integrating the acquired companies and products?

Twitter has been successful in retaining the original teams and integrating the acquired products. They have continued investing in the products, expanding and modernizing them. The Crashlytics team tripled in size, and the product expanded to become Fabric, a suite of developer tools under the Twitter brand.

Q: What is the speaker's role in advising Twitter on acquisitions?

The speaker has the privilege of advising Twitter on acquisitions and has seen a funnel of 50 evaluated companies, deeply evaluated 12, seriously considered 6, and closed 3 deals. The speaker highlights the importance of strategic alignment and the low likelihood of an acquisition deal happening.

Takeaways

The speaker shares several important takeaways from his experiences with acquisitions. These include the importance of focusing on the long-term future rather than the moment, optimizing for culture fit, understanding the strategic alignment between the acquiring company and the startup, being cautious about transparency during the acquisition process, and carefully considering reporting structure and support within the acquiring company. The speaker also emphasizes the need for founders to gauge transparency appropriately and reduce stress for their team during the acquisition process. Finally, the speaker highlights the critical role of strategic alignment and complete control over messaging in successful acquisitions.

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