A potential acquisition was looming ahead for the previous startup I was at.
We were going to talk about our company’s technology so I rehearsed the presentation over thirty times. Ten to the team, twenty solo in my apartment.
I remember drinking coffee before a practice round. My team’s feedback was I bolted through the talk in half the time plus my voice bypassed the sound-proof glass window. I’m normally not loud. Without caffeine.
Then the day of presenting to the acquiring company arrived.
When I walked into the building with the team, I’ve never seen an office with wood everywhere for decoration. Wooden whiteboards and stumps for tables. I guess the valuation of this company would justify the decor.
We were soon escorted into a conference room. I was asked to sit facing the door. While we waited for the meeting to begin, we checked our documentation and readied the demos. We had internet and our website loaded.
The door opened. Five people surrounded our team. They were all executives. The most senior executive boomed, “We only need to be as clever as we need to be.”
He drew a diagram on the board with a spectrum of users to developers and what they cared about. Here’s my recreation of that picture:
He wrote down 4 areas each archetype would care about:
- Abstraction
- Complexity
- Code
- Math
I noticed how his purple sneakers matched the marker he was using. Even with the room’s mood lighting and purple ink on a brown surface, the message was clear.
App developers at an estimated population of 50 million didn’t care about abstraction or complexity of our technology. What’s important to them was writing code for a product to make customers happy. Our team was a little dot. We were on the deep end of complex pointer programming and memory management.
When acquiring a company, they wanted app developers, not C/C++ hardcore hackers who might get bored if the technology wasn’t “cool enough.”
They were concerned.
I got the point. Their app was making a multiplier of money far larger than I’ve ever seen. Clearly they’re doing something right, like proper product-market fit with paying customers.
Not a great way to start a meeting. At that moment, we could have failed the round of due diligence. I was sure they were about to escort us out of the building.
I remember us saying, “Wait – want to see our app?”
We dropped our entire powerpoint and super-technical demo strategy. I never had to deliver the presentation because I didn’t anticipate what the executives were looking for. I spent all that time preparing for the wrong thing.
They did not want to hear about a lockless ring buffer filtering data super fast.
The entire session transformed into a Q&A about the product and how we did build an app in Ruby on Rails. We relieved the executives’ concerns and passed this round of due diligence.
For other reasons we ultimately did not clear the acquisition with this company in later rounds.
Two takeaways –
- Remember your audience!
- Don’t get too clever with technical complexity when selling a company
I also skipped coffee since I didn’t have a time limit.
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