I recently enjoyed chatting B2B SaaS, Customer Success, BuildingConnected, the origin story of Flatirons Tech, and tech diversity & inclusion in the Bay Area and Boulder on the Boulder Tech Cast podcast. This episode was recorded during Boulder Startup Week 2018 at Dojo4.
Imagine you’re working for a fifteen-person startup known for its tight-knit, values-driven, outdoorsy culture, and suddenly, one day, you’re pulled into an all-hands meeting letting you know that your company has just been acquired by a big company headquartered across the country. You may know a little or a lot about this company, but either way, very soon, you will become their employee.
For startup employees, an acquisition can be a nerve-wracking time due to the number of unknowns.
Some questions that may arise:
- What will change, and will any of it markedly affect my work experience?
- Will the parent (acquiring) company share the same values as my current startup?
- Will my job become redundant and/or will I no longer be needed?
- More immediately, what will happen to my PTO, benefits and will my spouse still be covered on my health insurance?
In addition to the potentially negative consequences of an acquisition, it’s important to remember that there can be many positive outcomes. For instance, you could get a promotion. Or perhaps you had equity that you could turn into cash in the acquisition. Regardless of whether you have equity, there may be an opportunity for you to leverage the value you bring to the transition to negotiate a nice windfall. Acquisitions and their resulting transitions can be highly emotional times, and no two acquisitions look quite the same. That being said, there are some ways you can empower yourself to make the most of an acquisition.
In 2015, Analiese Brown was the HR Manager at the time of acquisition of ShipCompliant, then an approximately forty-person self-funded, privately-held SaaS company headquartered in Boulder, CO. During the acquisition, Analiese’s role involved helping ShipCompliant through the transition, and much of her work centered around trying to help employees feel empowered throughout the process. Analiese oversaw changes in employee benefits, policies, and procedures such as well as the integration of HR systems and record-keeping with the acquiring company, Sovos. But Analiese also managed the “human” side of the transition, which involved helping employees grapple with the emotional elements of the transition. Read Analiese’s blog post sharing lessons learned from working at ShipCompliant.
“The CEO filled me in as it became more of a reality that it was going to happen,” said Analiese. “At that point, my focus became understanding the acquiring company’s processes, employee benefits policies and handbook, and other things that might potentially affect our team once acquired.”
For Analiese, being on the team spearheading the integration was challenging; she oversaw details such as how to honor everyone’s time off balance and roll it over into the new policy, and also had to determine how to communicate the changes to employees. Analiese learned that the key to successfully navigating a startup acquisition as an employee is to focus on how you can shape what’s happening, and to find ways to re-frame it from something happening “to” you to something you have the power to shape to better your future.
Here’s what Analiese recommends if you’re a startup employee finding yourself in an acquisition scenario:
Upon learning of an imminent acquisition, take it upon yourself to learn as much as you can.
While there will be much that you don’t know and can’t know right away, obtain as much information as you can about the acquiring company. Research the acquiring company’s leadership, financials, and key customers and stakeholders. Editor’s note: You can search for recent press releases about them and check Crunchbase and Angellist to determine whether they’ve fundraised and/or if they plan to one day go public. Try to find out what happened when they bought another company; did the founders stay, and if so, how long? How many employees stayed?
Some of this information won’t be readily available, but you’d be surprised what you can dig up with some modern sleuthing. You can learn from internal resources, too. There might be a designated go-to person at your startup (the company being acquired) you can ask questions of who may be CEO of the company, startup’s founder, or whomever is managing HR or Finance. Whoever it is, there is probably some designated go-to resource you can look to who will be able to provide you with information to help you feel empowered, but remember they may not have all the answers or may be unable to share information one-on-one before announcing it to the whole group.
For as long as you’re planning on sticking around, commit to doing an outstanding job.
Don’t let the shifting sands environment of an acquisition be an excuse not to be a stellar performer. Keep up the great work — regardless of how long you plan to stay, you need to put in extra effort during this period because upon staying or leaving, you will have new people to impress either at the acquiring company or a new role very soon.
Sam Altman of Y Combinator says, “Most acquisitions are not smooth sailing. Go into it knowing it’s going to be hard.” Sam recommends employees wait at least six to nine months before making a decision that it’s not going to work (Source). In many cases, you’ll benefit from staying long enough to fully explore the opportunities present in an acquisition.
Empower yourself by becoming actively involved in the transition.
Your company may form a group of employees who are interested in shaping the transition. If there are ways to get involved, you’ll have access to information and will be in a place to shape the transition process. Every acquisition and integration is structured differently – the more you can be actively involved, the better chance you’ll feel positively about the outcome.
Sam Altman recommends adopting the mindset of “bridge builder”. “You don’t want two warring factions,” says Sam. “You want the new company to support you and you want people to like each other.” He advises making it your personal business to develop strong relationships with as many people as you can at the acquiring companies and be a bridge as tensions inevitably rise. (Source)
Give up on trying to keep things the same.
Things will change. That’s a given. The only thing you can control is what you do about the changes. Take time to mourn or celebrate the startup experience you had, and then roll up your sleeves, learn and decide whether you want to stay and/or if you need to go. Sam Altman says that often agreements will be reached with acquired companies to stay fairly autonomous, which can be a great thing if you already like your work and its processes.
“I would push the founders to make sure you got such an agreement to operate as independently as possible,” said Sam. (Source)
Unfortunately, even if such an agreement is reached, the reality of what “staying independent” looks like can be vastly different in each scenario. There may be certain processes like vacation time or required internal systems that will bend towards the parent company’s way of doing things. Figure out what will change as soon as that information becomes available.
Determine whether the new reality aligns with what’s important to you, and determine which things are non-negotiable for you.
Analiese recommends reading What Color Is Your Parachute?, a classic career discovery book, which can help you do the crucial work of discovering what’s important and what ultimately will be most fulfilling to you in your career.
Upon deciding to join the company, you probably have evaluated a number of factors that you’ll now have to re-evaluate. This includes: preferred geographic location, office environment you thrive in, and essential company values. Analiese says coming back to our own needs and desires provides a framework to evaluate whether the new reality of your acquired company will support and fulfill these things (or not). This personal inquiry is valuable regardless of whether you’re currently undergoing an acquisition, but is especially crucial when your company is experiencing major change.
Analiese reminds us that it is a human impulse to fear change. Figure out what’s important to you personally. Are you unwilling to move to a new city? Will you draw the line if the acquiring company doesn’t value inclusiveness?
If you have equity, understand how it works.
Understanding the impact to you as soon as you can will equip you with information about whether there’s a choice to be made, whether there’s an obligation to you around how that is paid out. If you don’t have equity you may feel the ship has sailed, but there may be some individuals who were very involved in transition or contributed heavily to the company’s success in the recent past who may be then be in a position to be rewarded in some other way. That can be discretionary. It’s worth having the conversations. If in doubt, consider hiring a lawyer or business advisor who specializes in startup equity; you’ll be glad you did.
You may be acquired by a parent company with bonus or Management by Objectives (MBO) culture and if you’re in a key position, you can negotiate with the parent company for a favorable compensation structure or bonus. If you’re someone integral to transition, whether or not equity is part of your current compensation package, you may have some leverage.
Consider negotiating for a new role or a promotion.
If you’re planning to stay, once the shock wears off and people wrap their heads around what’s happening, incredible opportunities may surface. It may not even be something you have to ask for; you may see a restructure and be asked to take on a new role, or perhaps travel more or be based out of an office in a more desirable location. Analiese suggests looking for potential opportunities to learn and grow and develop as much as you can during an acquisition process. You may need to explicitly ask for a promotion if you’re being assigned more responsibilities or your role is being enhanced. Often larger companies acquiring smaller ones may have more well-articulated career paths, or may look at the role you’re doing in a new way. At smaller companies, you may be a Jack or Jill of all trades, but upon acquisition, you may find that in this new reality, your multi-faceted role puts you a peg higher in an organizational chart.
You may also find that you are qualified to be in a higher-level role, and the acquiring company will likely have more funds or resources for learning and development. This may include going to conferences, workshops, or perhaps an internally-created leadership development program. There may also be more structured rewards and incentive program.
In the early post-deal stages, Analiese reminds us that it may not be totally clear what new career paths will be available or who will be impacted and how. Analiese says, in an ideal scenario, managers are a good first line of contact to ask for information and discuss how you’ll be impacted along the way. Hopefully, your manager will have the inside track (or be able to point you toward the right resources) to explore promotions or other opportunities.
If you’re facing an acquisition, adopt a learner’s mindset and find ways to become an active participant in the transition. Your goal is not to try to resist the change or preserve status quo, but to understand what the new scenario will be and to determine if the new company “reality” aligns with your values and needs.
If you’re resourceful, the acquisition of your startup can be an incredibly powerful catalyst for your career and personal development.
I have been part of the unique, dense, and constantly-evolving Boulder, CO startup ecosystem for nearly three years. During this time, I have had the privilege of working closely with a few local startups as clients through my former marketing consultancy. I currently work directly with several local companies who are sponsors and partners of the inclusivity-oriented tech meetup I founded, Flatirons Tech.
Boulder’s unofficial startup community ethos is “give first,” a phrase coined by local VC Brad Feld. This philosophy drives the entrepreneurial community here in Boulder, and is part of why the community is so dynamic despite its relatively small size and considerable distance from the heart of Silicon Valley.
Andrew Hyde, the founder of Boulder Startup Week, reached out to me earlier this year asking me to be on the Boulder Startup Week organizing committee and help run an event within the “Change The Ratio” track, which focuses, broadly, on startup culture and inclusivity. I said yes, and worked closely with many great people, including local startup SendGrid and Boulder Startup Week organizer Amy Button, to put on an event called “Creating Inclusive Startup Cultures” at SendGrid’s Boulder office.
Panel speakers came from Silicon Valley and local tech community; ServiceRocket’s COO Erin Rand spoke at the panel, alongside QuickLeft’s Chris McAvoy and Gorilla Logic’s Rachel Beisdel, whom I spoke with on a panel last November as part of NewCo Boulder, and SendGrid’s Josh Ashton, with whom I work closely through Flatirons Tech meetup.
ServiceRocket’s COO Erin Rand also spoke at an another event organized by SheSays Boulder on creative entrepreneurship. It was an awesome night of inspiration from some of the best c-level talent in Boulder and beyond, who just happened to be women.
I loved attending and helping shape Boulder Startup Week this year. I look forward to next year and continuing to be involved in its success.
Gainsight Pulse Conference And Customer Success Updates
Earlier in the month, I attended Gainsight Pulse Conference on behalf of ServiceRocket, who sponsored. This was my second time attending the awesome annual gathering of the Customer Success community, of which I am proud to be a part.
We’ll be releasing several episode of Helping Sells Radio that include interviews with experts from the conference. In the meantime, here’s two episodes we launched during the conference featuring Customer Success experts Todd Eby and Catherine Blackmore.
Named Top 100 Influencer In Customer Success By MindTouch and Customer Success A-Lister By Amity For 2016
I was honored to be included in MindTouch’s Top 100 Influencers In Customer Success among such amazing leaders in the industry. Thank you to MindTouch for including me.
I was also honored to be named A “Customer Success A-Lister” by Amity.
Helping Sells Radio Listed In “What’s Hot?” Section Of iTunes
The podcast I co-host, Helping Sells Radio, was listed in “What’s Hot” section of iTunes in Tech podcast category. My co-host Bill Cushard and I have been speaking to more great technology experts, including Geoffrey Moore, Aaron Ross, and more. Listen to past episodes.
Thank you for reading. -Sarah
Tomorrow, I’m attending Gainsight’s Pulse Conference 2015 alongside team members from my amazing client, ServiceRocket, who are proud sponsors of the event. I’ve been watching the meteoric growth of Pulse these past few years, and am truly excited to be joining 2000+ other Customer Success enthusiasts and practitioners this year–the first time I’ll be in attendance. I’m excited to meet great people, learn a lot from the expert panels and sessions, and soak up all of the vibes and insights from the premier Customer Success event of the year.
In anticipation of Pulse, here are a few of the latest projects I’ve been working on in the Customer Success world:
I worked on this guide alongside others from the fantastic ServiceRocket team. It includes recommended speakers, panels, events, and even events to enjoy when you’re in town. I really recommend viewing and downloading if you’re coming to Pulse this year. Published on ServiceRocket website.
Through introducing customer training into the pre-sales equation, CSMs can help seal the deal and sow the seeds of software adoption and customer loyalty. Here’s why it’s so smart to leverage training to help convert your prospects into customers, as well as some tips for getting started. Published on the Learndot blog.
To link your customer training to business outcomes and ultimately business return, you need to build training that your customers will actually use. To do this, you’ll need to create courses that are personalized to your customer personas with respect to delivery method, individual users’ professional growth, and ongoing feedback. Wherever your company is in the software training maturity model, you can get started building training your customers will directly benefit from and love to use. Published on the Learndot blog.
In other exciting news, MindTouch unexpectedly listed me as a ‘Top 100 Customer Success Influencer to Meet at Pulse Conference.’ I was surprised and honored by the mention, and look forward to connecting with others on the list as well as the uncounted numbers from incredible companies who deserve to be on here. Grab the PDF list of influencers on the MindTouch website.
Thanks so much for reading! If you’re at Pulse and want to meet up, tweet me at @SEBMarketing and say hi. As always, if you have any questions about the amazing companies or software mentioned here, please feel free to drop a line.