We're Going on Summer Vacation!

07/19/19 • 0 min

The guys are taking a few weeks off from podcasting to enjoy the fleeting Pacific northwest summer. They'll be back in late August or early September, fully rested and ready with hot takes to warm you as summer turns to fall.

Previous Episode

To Be Or Not To Be Acquired - That Is The Question

The guys talk about their experiences with offers to acquire Honeybadger and go over some common structures of acquisition deals (hint - most don’t involve walking a wheelbarrow of money out of your office and never returning). They also chat about things that you should think about if you are presented with an offer to sell your company.

Links:
GitHub

Tropical MBA, Before the Exit

MicroConf

Honeybadger

Full Transcript:
Starr: 00:01 It's happening in me. I'm going to remember you silver lady, so don't you worry.

Josh: 00:08 You'll find her some day.

Announcer: 00:10 Hands off that dial. Business is about to get a whole lot nerdier. You're tuned in to FounderQuest.

Starr: 00:21 Somebody tweeted a while back and somebody referenced us and said that we should talk about this. You know, you should run your company like you're going to sell it. So then I thought, "Well maybe we could talk about sort of acquisitions in general, maybe weave it back and forth."

Starr: 00:33 So Honeybadger has had a couple of fairly serious acquisition talks, none ongoing right now, none that panned out obviously. We're not going to name names because I think it might be illegal for us to because we signed stuff. The first one was with a private equity firm that specialized in sort of smaller companies and taking these companies built by developers and then bringing in business people and figure out how to grow them. And then we had another acquisition talk with a pretty well known company in the developer space, and that would have been kind of a strategic thing because they were kind of trying to bring something to the market that was very similar to what we did. And sort of both of those eventually fell through because we just couldn't really come to terms.

Starr: 01:15 But I think we learned a lot while we were pursuing these because starting out I knew about acquisitions, like what pretty much I imagine anybody knows about acquisitions. It's like, "Okay, you sell a company, you make a ton of money, and that's like your happy ending." But it's really a lot more complex than that. Unless you happen to win the lottery, it's not necessarily like this huge, "You're going to be rich and set for the rest of your life event."

Starr: 01:40 Yeah, so I don't know. What do you guys think?

Ben: 01:44 I think that last statement is key. Our business has grown steadily, but not exponentially right? So, if you're sitting on a rocket ship you could probably have one of those acquisition events where you're set for the rest of your life because they're buying based on the future value of the company. They are not just based on what you've done so far, they are based on what they think you could do with them, combined with you. If you have had this exponential growth event, or if you can show that happening with their added resources to yours, then you could probably pull that off. But in our case, that wasn't really the scenario, right? We were growing steadily, the acquirers were interested in us because they knew that it was a reasonable business that could continue to grow, but not that it was expecting like this phenomenal growth. Yeah, so in our case those numbers weren't going to be crazy high numbers, but they were still nice numbers.

Starr: 02:47 I feel like this is kind of a theme in our podcast, in that the way that most people probably think about acquisitions is focused on the VC model of startups and fundings and acquisitions. In a lot of our episodes we're like, "Okay, this is the VC way of doing things," but that's not like the way for everybody. The sort of VC acquisition model that everybody has in their head is, "Okay, you start this company. Your company has a ton of growth and it targets some market that is adjacent to a big, big company. And that big, big company doesn't have their eye on this sort of little market. Maybe they don't realize how much opportunity is there, but then this little plucky startup comes and exploits that, gets crazy growth, and now you have this little company who is kind of edging in on the territory of a bigger company. And so the big company buys the little company in order to get access to that market." I think that's the most common approach. I mean sometimes the bigger company buys you because you've developed some crazy new technology that they couldn'...

Next Episode

You Know What We Did Last Summer - Season Two Begins!

Season Two of FounderQuest is upon you! The guys discuss what they did while on summer break, releasing breadcrumbs on Honeybadger and why they help when debugging, launching the new blog, Amazon RDS, and Airwolf!

Links:
Write for our blog.
Full Transcription:
Josh: We can't all be book-learned like you star.

Starr: Yeah, I'm book smart.

Josh: Yeah.

Starr: You guys are just the street smart ones.

Josh: We just read what's ever on the front page of Amazon.

Starr: No, y'all know how the streets work, you know how to get stuff done, you know, outside of formal channels if you know what I mean?

Announcer: Never forget that you have the tools to build a life on your terms. Forget the haters. This is Founder Quest.

Starr: We were going to talk about I mean we've been gone for a couple of weeks, several weeks, and I think we're just going to talk about what we're going to do. I've decided, we shouldn't say that we had a vacation because that's not the appropriate...

Josh: How I had multiple vacations and I did some work.

Starr: No, hush, hush, hush.

Josh: Okay.

Starr: I think we shouldn't call it a vacation. I think we should say that this is season two of Founder Quest.

Josh: Oh, I see where you're going. Okay, so season two go.

Starr: Yeah, nobody says like serial had a vacation.

Josh: Right.

Starr: There just on, you know, they had a new season.

Josh: So are we going to be a serial podcast now?

Starr: Well, we come serially so yeah sure.

Josh: Okay, cool.

Starr: Yeah, sure, it's just whenever we want to go on vacation we'll just say there's a new season.

Josh: Nice.

Starr: so people have to say tuned.

Ben: I can't wait for season three.

Starr: I hope we don't get canceled. That would suck.

Josh: Yeah.

Ben: So how were your vacations, Josh?

Starr: Yeah. How many vacations did you take?

Josh: I think I took two. The first one was a kind of a, I mean I was planning to take some time off, but it was not as planned as this last one. Yeah, in August I took a couple of weeks off just to kind of recuperate and just connect and stuff. This last week, I just got back from visiting my kids grandparents, my parents in Arizona. That was a fine. It wasn't, I don't know, it was still a lot of work because the kids. Taking two little toddlers on an airplane that was the first time we'd done that. Yeah, it was fine. Got some sun, they have a pool. We spent a lot of time by the pool.

Ben: Nice.

Starr: I see a little bit of a thousand-yardstare in your eyes.

Josh: Yeah, I think.

Starr: The children on the airplane thing.

Ben: Oh, Starr you did that too, right? You just got back?

Starr: Yeah, I got back from also a grandparent vacation, but this time the grandparents, my partner's parents were like, Hey, we've got this timeshare in Mexico in Puerto Vallarta and so you should come down and I've got to tell you, boys. I was skeptical because it seemed like we were doing all the work right because normally like paying for accommodations is not the most daunting part of an international vacation with a three-year-old. I was skeptical, but it turned out to be super nice and relaxing because they have the timeshare they have, it was very nice. It was a sort of like an all-inclusive resort. They had this giant like a four-bedroom suite with balconies and a hot tub on a balcony and like I got to sit during the day for several hours for multiple days in a row and just like read by myself. I haven't gotten to do this unless I just like skip work and do it or something.

Josh: That's what I did by the way.

Starr: It's not the same. Right, because you feel like you need to get back. Yeah, it was just great. I mean it wasn't a cultural trip. I lived in Mexico for a year. I feel like I have a good appreciation of the Mexican people, country and culture already. A little bit of a resort vacation. It was kind of welcome I think.

Josh: I also got to spend some time reading by the pool while the kids were napping and that was very nice. What about you Ben?

Ben: I did not take any vacations with toddlers, but I did drop off my older son at college. He just started college this fall. That was a pretty wild experience. Let me tell ya. And I got some house work done, like had contractors doing work on my house, so I'm flat broke now because between college and, Oh and then my car broke down. I had to replace a bunch of stuff on it.

Josh: Oh man.

Ben: One here actually another, it's been, it's been crazy, but you know, it was a good Summer I got to relax a bit and yeah, I didn't go anywhere. I didn't do anything but read some books and you know, I hit the trail with my bike several times, which is nice. We had...