M&A, IPOs & Exits

If You Get Acquired, You’ll Need to Learn to Move from Persuasion to Alignment


Jason Lemkin

I’ve had a chance to semi-objectively watch a number of folks go through the M&A process over the past 18 months, and compare and contrast their experiences with mine.

Some acquisitions thrive.  YouTube, PayPal, Android.  Others of course die.  GeoCities, Broadcast.com.  Perhaps most actually meander in the middle.  Flickr.

Take a look at this interesting chart on Google’s acquisitions from ArsTechnica:  in fact most acquired companies/products do survive and make it, at least for quite some time, if they pay for themselves, at least at Google:

Screen Shot 2013-05-10 at 9.06.25 AM

But let’s put the products and companies aside.   Let’s talk about people.  What it will take for you, and those on your team, to make it post acquisition.

There’s one thing I’ve learned at the people level, why people don’t thrive after acquisitions (assuming they still want to succeed):  they can’t, or won’t, move from Persuasion as their way to drive decisions and change — to Alignment.

What do I mean?

Well, in most start-ups, even when you get pretty big … here’s how senior leaders Get Things Done:

  • Identify a problem, an opportunity, or something that needs to change; then
  • Get together the key players, physically, or by email, or whatever; then
  • Explain their position, with data and experience.  Convince the rest.  then
  • After convincing, new path is agreed upon.

And Then

  • And this is the key part — once everyone is convinced — then everyone in a start-up just goes out and executes on that new path.  They just go do it.  (Yes, probably with prodding by the CEO and all that — but they go do it).  Both because that’s what you do in a start-up … and also because everyone is on the same team, with the same goals.

The thing is, in the BigCos, those last 2 points don’t really happen naturally the way they do in start-ups, at least if some of the stakeholders aren’t your direct reports, and especially if they are in different departments.  There’s too much risk to think through, in brand, in budget, in opportunity costs.  Also, people in BigCos just don’t go execute on the new path.  They don’t report to you, they are in different departments, and they have their own priorities.  So they wait until they are told to act.  Even if you’re right and everyone agrees you are right.  In fact, it doesn’t really matter if you are right, until you achieve Alignment.

So the senior start-up people that are most frustrated post-acquisition  … they make great arguments … pretty much convince everyone they’re right, or at least that action needs to be taken … and then beat their heads against a wall when nothing happens after that.

“Is everyone so stupid?” these frustrated, post-acquisition employees think?

No, they aren’t.  In fact, the senior folks in every tech BigCo are probably just as smart and most likely smarter than you (after all, they’ve gotten further than you in most cases).  Though of course, they aren’t as smart as you in your domain.

Screen Shot 2013-05-09 at 3.14.37 PMThe problem, such as it is — is that you have to learn the skill of Alignment.  I know it’s an annoying concept if you haven’t had to live it.  Call it Politics, if you must.  It’s getting everyone at a reasonably senior level to go along with the New Path, or a different path than they are planning to go down.  It’s almost like guerrilla warfare, and you have to do it stakeholder-by-stakeholder, both 1-on-1 (to gain support) and then again in larger forums.  Probably, again and again.  And again.

This takes a lot of time.  You likely will even have to convince people who don’t care at all about your product or what you’re doing.  And you’ll have to find a way to get people to do things for you that don’t report to you.

It’s a hard skill to learn, especially when you’ve had success doing things your way (after all, this is why you got acquired).  Most start-up execs lack these skills unless they came from a BigCo at a reasonably senior level.

But you need to learn it, Alignment, if you get acquired.  Or at least, help your team learn it.

I’m proud of how we did after our acquisition.   I had some good, early success in Alignment, especially around maintaining our proven sales strategies.   You can see the results below:

Screen Shot 2013-05-09 at 3.12.07 PM

But it is hard, learning Alignment — and practicing it.  Making that change is hard.  I wish I’d done a little better job at it.

Published on May 16, 2013


  1. “Is everyone so stupid?” these frustrated, post-acquisition employees think?

    No, they aren’t. In fact, the senior folks in every tech BigCo are probably just as smart and most likely smarter than you (after all, they’ve gotten further than you in most cases). Though of course, they aren’t as smart as you in your domain.


    Gotta strongly disagree there, having participated in many startups and nearly as many Big Cos as we got acquired repeatedly.

    Yeah, they are in fact stupid when it comes to maximizing the value for the Big Co rather than lolling in the luxury of their fiefdoms, personal agendas, and political power. Whether they’re more successful or not is also not so obvious. Yeah, they got a job at Big Co, but have they really created anything of value, or are they just surfing the wave of a brand someone else built because they have the right friends and made all the right political moves? Lots of Big Co execs running around who are more cases of being in the right place and the right time for something someone else built than doing anything you could really call success except in the form of their paychecks.

    Jason, I’m glad you’re able to make the same moves those guys demand to be successful at Adobe, but you’re kidding yourself about Big Cos. They got to be Big Cos by acting as the startups did. Their momentum slowed considerably to the extent they lost that ability. And the ones responsible for that loss of momentum are precisely those executives you describe as needing to be aligned. Those are the guys setting them up to be Roadkill for the next round of innovators. Those are the Steve Ballmers of the world. That kind of person is the kind startups have increasingly moved away from hiring as they discovered just how counterproductive they could be.

    After seeing that in action a time or two, I resolved to negotiate 100% vesting in the event of acquisition from there on out. If the Big Co is serious about needing me, they can negotiate a new deal and make it work. Never had a problem either getting the term closed in my agreement or with the subsequent Big Co dealing with it.

    I wonder if some day Big Cos will figure out the same lesson and actually make it possible for decisions to be made because of great arguments that convince everyone they are right instead of politics?

  2. Bob, I hear all your points. What I can say is that at the senior levels in my F500 tech co experience — everyone was very smart. Everyone understood, at least after some discussion, exactly what the opportunities and challenges I faced were. But persuasion wasn’t enough. Call it politics, call it fiefdoms, it just doesn’t matter. That’s how mature, big companies are. Period.

    If all you want is to maximize your own monetary return, especially vs. time, then, I agree, just focus on 100% vesting, getting a pay out, and all that.

    If you want your child to survive the acquisition and indeed thrive … you may need to do more, especially if it’s not already doing $100m+. That’s just a fact. If you’re smaller, and you don’t achieve Alignment, your child may not make it. There’s too much else going on in the BigCo.

  3. Great post. To me this phenomenon is explained by the paradox of motivation. In a good startup the entire team is aligned behind one objective – serving the customer. Everyone is working to make the customer happy because that is the only path to survival. Even if you’re chasing revenue. Even if you’re chasing growth. Do what is helping your customers so you can get more of them and survive.

    In the world of F500 titans and their ilk, survival is off the table. At that self-perpetuating scale there is a disconnect between the work you do and its impact on longevity. So the motivation is vastly different – pleasing your boss is more important than pleasing the customer. The two don’t always go hand in hand and therein lies the rub.

    As you pointed out, that’s not to say there isn’t talent in corporate America. It is abundant. There are exceptionally bright people who just get it. There are folks who worry about being customer centric and try to espouse these ideals at their firms. But in my experience, for every one of these visionaries there are a dozen people more focused on their careers than the impact of their work.

    And as with all things large, inefficiencies are abound. There are folks who get promoted to their level of incompetence and just stay there for decades. The burning impetus is to maintain the status quo. This isn’t unnatural; humans tend to enjoy stability. It does put a cap on potential though, which is why most of these larger firms innovate through acquisition.

    Conversely, in a startup incompetence has a very real shelf-life. The filing cabinets on Sand Hill are a testament to this; a graveyard for founders who failed to address their customers.

    Interestingly though, neither ecosystem can survive without the other. Without acquisition exit potential term sheets will naturally be less favorable and innovation less encouraged. There is probably a whole series of posts you can write about how to manage the acquisition process from an operational standpoint. It’s a subject the valley doesn’t discuss enough; founders, executives, individual contributers alike.

    I encourage you to write more about this Jason. I’ve been through several and the EchoSign acquisition was far and away the best experience for me – something I credit the leadership on both sides for. Founders are usually hyperfocused on a liquid exit at the behest of their investors. There is an abundance of information on how to work with VCs and how to get to that point, but very little on what to do afterward. One thing’s for sure: whether you’re an ailing startup or a stagnant F1000, the cure is always the same – better leadership.

    I might be biased, but I think you can help with that.

  4. Not having to worry about survival is a critical difference, that’s for sure.

    We’ll do some more posts here, though it’s pretty nichey. You’re right, there waaaaay too much on how to work with VCs 😉

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