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I had to get back to our new SF office after a meeting, and instead of taking a cab, I decided to try Lyft. One the way over to the meeting, I had taken an Uber car that my colleague Adam ordered from his phone, making it a "taxi-free" day.
This was my first time trying Lyft. I submitted a request for a pickup using the iPhone app and was told "Romeo will arrive in 9 minutes." Funny enough, this was also Romeo's first day as a Lyft driver. So we had a great convo about what the experience was like for both me, and him, as first timers. Lyft drivers are the ones with pink moustaches on their cars. Here's what Romeo's car looks like:
I took a video as I used Lyft for the first time. Here's what my experience was like:
Why do some people succeed at fitness while others fail miserably? If there were ever a subject I could be called “obsessed” with, this would be it.
This subject pains me greatly; it pains me, because if people simply internalized the things I'm about to say, obesity would cease to be an epidemic.
Yet even the smartest people think about fitness in the wrong way. They'll often reduce fitness down to “eating less and moving more.”
As an example, I’ll often see the smartest tech minds in Silicon Valley become enamored by the latest fitness gadget. These same people constantly struggle to get fit, as evidenced by the tweets from these very same devices. (This also leads me to believe that there is no correlation between fitness IQ and actual IQ, but that’s a different subject altogether.)
You see, the biggest myth in all of fitness and nutrition is that people fail because they're lazy about exercise... that they fail because they didn't have the willpower to "eat less, move more."
As was reported in TechCrunch today, we've just signed a deal to sell our startup Socialize to ShareThis. Although having a successful exit is a dream for many entrepreneurs, I find myself feeling a wide range of emotions and thoughts. I'd like to share some of them in this blog to provide an honest assessment of what it's like to work tirelessly on a startup and then sell it.
The first thing I want to say is that often upon a sale, you'll hear everyone involved talk about how "pumped" or "excited" they are. The truth of the matter is that it's much more complex than that. There is absolutely a sense of excitement. But I've asked for, and gotten, permission from ShareThis to speak honestly about the wide range of feelings and to speak to the complexity of it all so I can provide a more thoughtful and honest assessment than one typically sees in these situations. Think of it as a peek under the covers of an acquisition.
I've broken this blog up into several parts:
I'll start with the really positive aspects: We're selling Socialize to the absolute best buyer I can imagine. ShareThis is a very fast-growing company with a strong team. As Forbes recently reported, ShareThis is #35 on its America’s Most Promising Companies list. Forbes pegged 2012 revenue at $30MM, and it’s on a rocketship-like growth trajectory. ShareThis didn't just buy us for our talent, but also because its beliefs around the value of social are closely aligned with our own, and because mobile is becoming a big part of its business (see this related blog post with my warning to Fortune 1000 CEOs about the sudden growth of mobile). ShareThis wanted to gain an immediate leadership position in social via the mobile channel, and with Socialize it's achieved that. And Socialize has gotten an incredible platform from which to further develop our social infrastructure for mobile devices. The fit just couldn't be better. Often when I would describe Socialize to people, they would say "so it's like ShareThis, but for mobile, right?" Exactly. So I'm very confident that together, the value of the two companies will be greater than their respective parts, and I'm very pleased that ShareThis saw the same benefits (dare I say, "synergies"). A lot of the credit here goes to Nanda, ShareThis' CTO, who called me out of the blue one day and said "we should do this deal; I know it'll be perfect," and to the ShareThis team for backing Nanda's vision.
While I can't speak to the terms of our deal with ShareThis, I'll use the experience to walk you through the general framework of a deal process, so you understand the multiple steps involved. What I'm going to share is not a reflection of how our deal went down -- I'm pulling from various deals I'm personally familiar with or from accounts I've heard from other entrepreneurs who have also sold.
The first thing I want to highlight is the stress that a deal puts on a startup. Uncertainty kills innovation, and for that reason, if you think you want to sell, it's critical that you get the process done super quickly. Thirty days from start to close is an ideal (although likely impossible) goal to shoot for. Ninety days is a reasonable and achievable goal.
It's also likely that the acquiring company won't be in as much of a hurry as you are: Getting the deal done is likely a secondary priority for them as compared to running their main business. For the startup, it defines the future of the company -- or at least, it's one major possible outcome with huge implications for the startup. There are a few exceptions on the acquiring side -- for example, Facebook is known for moving blazingly fast in deals as a part of its strategy to keep startups it's interested in from being scooped by other acquirers. As I assemble best practices for getting deals done, speed is at the very top of my list.
Next, from the startup's perspective, is evaluating alternatives. This is where someone like Ezra is invaluable. As I mentioned in this post, Ezra Roizen is a banker, but he's different from all the others I've met. Ezra is a scrappy "get it done" deal magician with a small team and a huge rolodex. He can get a temperature read from someone (usually either the CEO or a board member) at any potential acquiring company you'd like to speak to. It'll be up to you to decide what companies you want to target, and then Ezra can take it from there.
This post is a work in progress, since we’re just now selling our company Socialize to ShareThis. I also wrote about how the experience feels, and what getting a deal done is like.
One of my goals is to ensure a successful outcome from the deal. I'll start by defining what I mean by "successful outcome:" That the combination of the two companies produces more value together than we would have been able to achieve alone.
The first thing I did was start writing an Integration Document with my co-founders when we signed the term sheet. This document laid out the specific goals of the acquisition, the resources we had at our disposal, and the key items we would need to request to achieve those goals. Once we had co-edited that document in Google Docs to a point where we were all satisfied with it, I shared it with the ShareThis executive team.
I had already discussed and gotten agreement from Kurt, the CEO, on what the main goals of the acquisition were pre-term sheet. In the integration document, I outlined how we were going to prioritize those goals, and what resources we were going to put into them to achieve the goals.
Getaround is a car sharing service like Zipcar, except that it uses people's private vehicles instead of a fleet. It's a bit like AirBnB for cars. Getaround is part of the "collaborative consumption" movement, which believes that if we could share things we don't use most of the time it would be better for us in a lot of ways. Sharing cars means less cars on the road, which means less pollution, and generally less "stuff."
I'd never used Getaround and a few weeks ago I was trying to figure out why. I pinged Jessica, one of the founders, and told her that what I'd realized was that I didn't want to have to go to someone's house and "borrow" their car. The thought of actually interacting with the owner of a car was awkward enough that it had kept me from trying the service.
Jessica told me about a new type of rental they now have called "Instant," where I can use the Getaround mobile app to rent a car instantly and unlock it with my phone, meaning I wouldn't have to meet the owner or wait for approval. (This dovetails really well into my recent blogs about the power of mobile and apps to transform businesses, and how Fortune 1000 CEOs are going to get fired for missing it.) Getaround Instant was exactly what I was looking for, so my brother-in-law Dal and I decided to give it a try.
I had a few hiccups that Getaround is still working through (for example, Getaround verifies a driver's driving history with the DMV in real-time, and since my last name has a hyphen in it, but the DMV doesn't account for hyphens, my rental request initially broke Getaround's booking system. But both Jessica and Matt were very proactive at resolving these speed bumps). Overall the process was incredibly smooth:
Yesterday a group of students from my alma mater, the University of Virginia's McIntire School of Commerce, came to visit. They were spending a week in Silicon Valley as part of their spring break.
I've long privately urged McIntire to become more entrepreneur friendly. When I was a student at U.Va. in the late 90's, it was a very unfriendly place for entrepreneurs. It seems that things are finally changing, and the fact that these students were in California on spring break says a lot about their enthusiasm for tech startups. I've also written in the past about how high school students have seemed more receptive and responsive to becoming entrepreneurs than college students. It's almost like if one doesn't get introduced to the hunger to be an entrepreneur at young age, it becomes hard to impossible to stoke it later. But this trip made me feel like there's hope for helping people find a passion for entrepreneurship later in life. No matter what, though, I stressed to the students that came to visit that the passion had to come from within them. The best a school can do is support those that want it badly enough to try.
We spent an hour together, and I shared stories with them about how I paid for college by making UVa-branded Frisbees, and sold a card called the Hoos Savings Club Card. (It was way ahead of it's time -- basically an analog version of a daily deals service like Groupon). Here are some related pics:
I'd go around to shops in the Charlottesville area, get them to agree to provide discounts to students for the school year, print the discounts on the back of the card, and sell the card for $20 to students. For anyone in college today, it's a concept that would work just as well now as it did 15 years ago, and it's a great way to make $20k to $50k while you're in school, if you're willing to have a little bit of hustle.
The Wall Street Journal has run a series of articles about the app economy this week, identifying the app ecosystem as a $25 billion business. They write:
If you're interested in mobile, and apps in particular, I highly recommend searching this series of articles out.
When my co-founders and I started PointAbout, a mobile app dev shop in 2008, we had a really hard time convincing businesses that apps were more than just a fad. Then in the 4th quarter of 2009 something significant happened: I started to see budgets for app creation move from the "experimental" bucket to a dedicated budget. That's when the most forward-thinking businesses started to build mobile apps and we were able to build a strong business making apps for Disney, The Washington Post, Cars.com and many others.
But still, many businesses don't get it. I recently wrote a warning to Fortune 1000 CEOs because I'm convinced many of them will be fired for underestimating the impact of mobile on their businesses.
I just attended a fantastic, standing room only SXSW panel titled "Why Social Ads Work. Ignore Facebook Naysayers" with Kurt Abrahamson, the CEO of ShareThis, and Brandon Rhoten, the Director of Digital Marketing for the Wendy's restaurant chain. Both Kurt and Brandon spoke very openly about digital advertising, and social ads in particular.
Wendy's is a $9 billion company with over 7,000 locations in US & Canada (although only 150 locations in CA). Its biggest competitors are other QSRs (Quick Service Restaurants) like McDonalds and Burger King, but Wendy's is more interested in what newer chains like Chipotle are doing than these more traditional competitors, since Wendy's biggest business challenge is to have 20 and 30 somethings choose Wendy's over chains like Chipotle (Wendy's does very well with the older demographic, though, since it's a 60+ year old brand). The entire QSR industry is a $519 billion industry.
Here's the video of the event (sorry for the poor video quality; I was barely able to squeeze into the room)
I used to push production code -- back in '99 when I worked at GE, my buddy Jason taught me how to code, and I was fascinated by it. I spent much of the early 2000's building dynamically driven websites with mySQL back-ends for several startups, including an e-commerce website along with its back-end administration and inventory management system (screenshot below). We had to host the e-commercie site at a colo facility. That was way before AWS, or Stripe, or any of the technologies today that make something like that much easier today.
While it's been years since I've pushed any production code, that experience has left me with a deep appreciation for what engineers do. Most business people don't have that, and it hurts them in ways they don't even realize. As Paul Graham wrote in his essay "Maker's Schedule, Manager's Schedule," it's easy for managers to completely torpedo the productivity of the "makers" -- those who are actually building the business and really creating value.
It's for this reason that I really encourage managers to learn to code. It's even in our Socialize manifesto, point #1: "Every new hire has a 'Hello World' in at least one language."
The first thing that a manager will find is that coding is a lot harder than they imagined it would be. Most managers have an attitude like "Yeah I could code if I really wanted to, but I can add much more value by being a manager." That attitude is actually a smokescreen for an insecurity: If it's so easy for you to learn how to code, then let me see you do it. Because it's not easy. It's hard. And it's even harder to do it well.