Post-Deal Best Practices In the Socialize Acquisition by ShareThis
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.
Importantly, I didn't put dates around those goals. Instead, I ordered them by importance. This is a key part of the scrum methodology that's often employed by engineers, but less often employed by executives: Things take as long as they take. By putting arbitrary deadlines around goals, you're just creating stress and inefficiency for those trying to achieve them. Instead, just order the goals based on what's most important to the company, and get them done in that order. If things aren't moving fast enough, reallocate resources in an agile manner to put even more emphasis on what's important. Everything can't be important at the same time, because when everything is a priority, then nothing is a priority. By trusting your team to produce results, and prioritizing them to work on whatever is most important at any given moment in time, then those things will get done first. It's as easy as that.
I co-edited this Integration Document with the ShareThis executive team using Google Docs until we were all satisfied that the Socialize team had a clear direction that would add the most value to ShareThis based on its goals. This document became the planning document around which our team broke the main goals down into actionable steps, and it now has child planning docs that expand on each goal for the acquisition which have been shared with the ShareThis team members involved in each goal.
This worked very well. So, the first piece of learning I have thus far is to ensure you have a clear understanding of what the acquiring company's goals are, how you'll help achieve them, and then memorialize this understanding in a document that the executive teams of both companies buy into. And importantly, I took on the task of creating this document so the ShareThis team didn’t have to. My perspective was that as the company being acquired, this document was much more important to us than to the acquiring company (which has a lot of other things going on), so the best way to position us for a successful acquisition was to create a framework as early as possible that everyone could contribute to, and take ownership of that framework. To me, this is a core responsibility of the CEO of the company being acquired.
The second major point revolves around cultural integration. Cultural differences can kill an acquisition faster than any other single factor. I've heard many sad entrepreneur's stories that describe how an otherwise well intentioned acquisition failed due to the lack of a cultural integration.
To combat this issue, I've made it a personal priority to work out of the ShareThis main office for the first few months of the acquisition, and to use meals and happy hours as an informal setting to get to know as much of the ShareThis team as possible. Even before the deal was signed I had scheduled conference calls with the executive members of the ShareThis team, to make sure they understood Socialize and could provide input on the main goals of the acquisition, as well as for me to have a better understanding of what their roles and priorities were. Additionally, several members from the ShareThis team, including Kurt, the CEO, will spend time working from the Socialize office. Although doing this feels inefficient since the Socialize office is up in the city of San Francisco, and ShareThis' main HQ is in Palo Alto, about 45 minutes south, the right way to think about it is as an investment we're all making in creating the relationships that will allow us to grow together as a unified entity.
These are my two major learnings thus far. I'll keep adding to this list as I find things that I consider to be critical to the success of any acquisition, and I welcome your comments below, especially if you have personal experience with things that worked well or caused problems.