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I once killed a $125M deal by being “too honest”
- coldacid 5y agoLost a $125M deal, but gained a $265M one months later. It may have hurt originally, but sounds like things eventually ended up better than expected!
- paulpauper 5y agofailing forward
- awb 5y ago*6 months > The lessons proved helpful 6 months later when Microsoft offered $265M for LinkExchange.
- coldacid 5y agoOops! Could swear that I typed "six". At least "months" was properly plural.
- cudgy 5y agoAlcohol damages more than our brains.
- jraph 5y agoOk, my take away: if I ever want to merge my team with another team, I'll avoid "but that team is better than us" (not that I'll ever be in that situation in the foreseeable future anyway) (pg's answer in this thread: "Whoah, I had no idea about any of this till now...")
- gumby 5y agoThat’s not the takeaway. One of the classic rules of selling is “shut up and leave as soon as you have the order.” It’s not just literal sales call. If your meeting is to get the signed contract, run out the door once it’s in your hand. Don’t push for the P.O. in that moment. If you have a call with a prospect to set up a meeting, you’ve got that scheduled hang up and prepare for the in person meeting. Etc etc.
- tarsinge 5y agoAlso applicable to interviews. > run out the door once it’s in your hand Resisting the urge to add something at the door is crucial, more than one good meeting was ruined there (at least for me).
- khazhoux 5y agoYou mean the candidate (or hiring manager) said something that turned you off, or you said something?
- awb 5y ago“X is better than Y” is subjective, so kind of a silly position to debate in the first place. It would be interesting for me to know what he meant by “better”. More efficient? More prestigious? More collaborative? More visionary?
- timdaub 5y agoNitter.net link. Here's the link that should have been submitted to HN assuming not all HN users have/want Twitter accounts: https://nitter.net/apartovi/status/1449856639331340289 https://nitter.net/apartovi/status/1449856639331340289
- andrepd 5y agoOr use the privacyredirect addon ;)
- lordnacho 5y agoIntegrity matters. Even if he hadn't gotten a big offer later on, he could still walk away with that. Yes, you can argue that he could have just kept his mouth shut and still honestly taken the Yahoo deal, but he said what he thought was right and gave Yahoo some good judgement about pg's team. I recently interviewed with a number of firms, and the ones that give off the best impression are the ones who ask to integrity at some point in the process. Hopefully this won't turn into the next "what's your greatest weakness" of interview questions. But firms doing the same thing in the same industry can often have a very different feel to them, and this is one of those things that might change your impression.
- ethbr0 5y agoMakes you wonder if behind the scenes, someone at Microsoft checked with someone at Yahoo and heard the story, and then Microsoft did the deal.
- vsareto 5y agoHow do you have integrity when you throw your own engineers under the bus?
- CapitalistCartr 5y agoTelling the truth isn't throwing anyone under the bus. If "they" are better than "us", that's the truth. Personally, I'd have bought the guy's company just because that's the right sort of engineer I want. Having said that, he wasn't under any obligation to tell Jerry anything.
- Version467 5y agoThat hurt to read. I'm expecting to be in a position where I could meaningfully influence any acquisition or merger (let alone a 125 million USD one), but knowing when to shut your mouth is a valuable skill to have in many situations. I'll try to keep this in mind whenever I realize that I'm overexcited (which I tend to be).
- Version467 5y ago*not expecting to be
- brk 5y agoIn sales there is a term "know when to stop selling", this story is kind of a variant of that. If you have acceptable terms worked out, stop "selling", stop trying to show or add more value to the deal. Close the deal you have, and then work on any new or additional things.
- gabrielsroka 5y agoSelling past the close. https://en.wiktionary.org/wiki/sell_past_the_close https://en.wiktionary.org/wiki/sell_past_the_close
- curtson 5y agoThis makes sense. It's disappointing that you're doing your best to sell your value, but instead, you got your chances ruined.
- admissionsguy 5y agoIt’s something I’ve been always struggling to accept. Be it sales, academic debates, court cases, or just dinner table conversations. Why does the outcome depend on the timing and specific choice of words used? Isn’t it a proof or irrationality of it all? Shouldn’t the outcome converge to the "best" one (optimal, true) the longer the process takes?
- htrp 5y agoThere's a nobel prize awarded in 02 for the guys who figured out that people are irrational
- ProjectArcturis 5y agoYes, of course it's irrational. People are not machinelike optimizers of information accuracy. If that's your mental model of people, you're going to have a bad time.
- wombatmobile 5y agoThe explanation is perfectly rational. Once the buyer has been convinced, his worldview is dependent upon a number of assumptions he's made by extrapolating limited information. He makes a number of those assumptions on the basis of trusting the seller. If that trust wavers, the assumptions crumble and the worldview collapses. The buyer's trust in the seller is fragile because the buyer doesn't really know the seller. His image of the seller is based on an internal model that the seller has triggered by being similar on a few heuristic markers. The buyer jumps to the conclusion that the seller is that good guy he's been waiting for, on the strength of a few matching signals. But the more the seller says after that point to demonstrate defining characteristics of his knowledge, personality, or character, the more he risks varying from the buyer's internal model. Less is more, because by increasing the number of points of comparison, the more the seller risks spoiling the match.
- FinanceAnon 5y agoIs this the same guy who recently posted about trying to bluff Steve Jobs, getting called out on it and losing a deal? I wonder how many more stories like these he has lol Edit: found the link for those interested https://news.ycombinator.com/item?id=28826437 https://news.ycombinator.com/item?id=28826437
- rexreed 5y agoYup I was about to post, it's the same guy. You'd think he'd learn his lesson about keeping his mouth shut. Not speaking sometimes is as strategic as speaking. Not sure what impact he wants these tweet threads to have, but if all you know from him are those tweet threads, it doesn't paint a very positive light. I'd like to replace TL;DR with TT;DR: Tweet Thread, Didn't Read.
- ksec 5y agoExactly. It is basic Business 101 with Yahoo. It wasn't about "too honest". ( What a nice way he is trying to spin it ). But that is Ok. We were all once young, naive and vigorous. But that was the Yahoo era. He then repeat the same mistake with Steve? And Apple has a history of not paying much for M&A. It was really well known even in 2008. And $300M for P.A Semi was considered a very big deal back then.
- raydev 5y ago> Not sure what impact he wants these tweet threads to have They're notable stories and helpful to others who might make the same mistakes. I'm more concerned that you are bothered by his honesty about past mistakes.
- gonehome 5y agoIt’s kind of the same mistake? Talking when he should have stopped talking.
- crate_barre 5y agoThe mistake was he tried negotiating with Jobs himself lol. I dunno, getting 50m in Apple stock would have been fine if the buyout had to be 50m. The deal would have been way more than 3x by now. Bravado at work here. Yes, this man has the same problem I suffer from (not in selling myself, I’m pretty good about shutting the fuck up in that regard), but in general, this gentleman suffers from ‘can not shut the fuck up’. I can commiserate.
- darkerside 5y agoI know pop culture references don't always go over well here, but this reminds me of the Kanye situation at the VMAs. He was likely drunk and attention-seeking, but he was also probably completely incensed when he saw Beyonce fail to win Best Music Video for "Single Ladies". He saw such a misunderstanding of a clearly superior talent and effort that resulted in a qualitatively better result, and he couldn't help but say something, and ended up putting his foot in his mouth.
- pavlov 5y agoAs the Tamarians say, “Kanye when the single ladies fell.”
- jerrre 5y agoA big difference being that in your case Kanye had no specific stake either way. The parallel would be if Taylor Swift would've said: Beyonce's video is better, and the VMAs would've said: actually you're right, please hand back the award.
- scns 5y agoIs this art or Kanye West? Snark intended
- khazhoux 5y agoThat was just Kanye being Kanye though.
- xwdv 5y agoI don’t even see his mistake as being “too honest”, it’s more like he was just being petty. If someone thinks a company sucks but you think it’s great, is it really worth arguing to change their opinion, especially with such an inflammatory statement?
- Miner49er 5y agoYeah, the guy doubted himself and his own team even after they landed that deal, and as a result lost the deal? If I was on his team I would be pissed.
- pixelgeek 5y ago“To lose one parent, Mr. Worthing, may be regarded as a misfortune; to lose both looks like carelessness.”
- toss1 5y agoGreat story (& from the same guy with the Steve Jobs story ~last week). Immediately calls to mind two phrases of advice I've found very useful over the years related to sales and deal making. "Quit drilling - you struck oil", as in don't try to keep selling once your counterparty agrees - you can only cause harm at that point (and even if there are more great things to discover, no harm if they get happier after the deal closes.) And, one of the the most frequently applicable ones in life (& once seen l, it's amazing to see how much unhappiness comes from not heeding it): "The deal's not done until the check clears."
- jccc 5y agoFrom pg: “Whoah, I had no idea about any of this till now...” https://mobile.twitter.com/paulg/status/1449861338390466561 https://mobile.twitter.com/paulg/status/1449861338390466561
- locuscoeruleus 5y agoI'm very curious what narrative he had on what he did right to land this deal and if that changed with this new information.
- thih9 5y agoTwitter web UI is not loading tweets for me past the 18th message. Is anyone else facing this or knows how to read the rest? Edit: https://threadreaderapp.com/thread/1449858706750033921.html https://threadreaderapp.com/thread/1449858706750033921.html
- retSava 5y agoThey've seemingly done some a/b on me so that many times it requires me to log in/sign up. Also looking at you reddit, "this thread can be read in the app". Thank the kings and queens for 3rd party viewers (using Slide).
- zibzab 5y agoI wonder how many A/B tests take into account the people who get so pissed off that they immediately leave the platform. (This is how I stopped using YouTube)
- crate_barre 5y agoWhy is everyone so sure Yahoo would not have reneged on the deal anyway? If they were ready to renege the way they did, which is extremely ruthless, what makes you all think Yahoo would divulge they were doing due diligence on Viaweb with an existing floating offer already in place for LinkExchange? Maybe another company was out for Viaweb, Yahoo secures LinkExchange, but continues to try for Viaweb, totally ready to drop LinkExchange if Viaweb comes through. Look at what the company did (renege an offer) and you will understand what they were also doing behind the scenes. A little bit of a hot take, but I don’t think $125 mil goes out the window because someone said something over drinks (especially something as benign as an exaggerated flattering compliment). I often give similar compliments when others undermine someone I know well, but respect me. I always say ‘look, that person is a better person than me’, all I’m trying to convey is if ‘if you respect me, know that I respect them, so take that into consideration’. I don’t literally mean they are a better person, that’s not for me, or for you to judge, so let me flip this notion on its head for all of us.
- Invictus0 5y agoAn off-color comment over drinks has tanked many, MANY deals.
- hnbad 5y agoNo kidding. If I was giddy to buy out a company and their CEO told me there's another company that is much better than them and also looking to get acquired and insist their people are better when I push back on it, I'd be extremely cautious about going forward as planned. It may not be that the other company really is that good, but if the CEO is so comfortable underselling their own team, that suggests the company is not as attractive as initially thought. Especially in a space where hype is the norm.
- NVHacker 5y agoBlabbering your opinion when you should shut up has nothing to do with "honesty".
- MichaelZuo 5y agoIf he didn’t make that momentous blunder, YC may never have happened…
- ghufran_syed 5y agoThis wasn’t integrity - just bad sales technique. He had some knowledge that was potentially of value to Yahoo, but instead of seeing if Yahoo was interested in buying that knowledge, he just gave it to them for free.
- simonswords82 5y agoI know this comes up on every longform Twitterstorm or whatever it's called - but I really wish people would stop posting otherwise interesting and insightful anecdotes to Twitter.
- wombatmobile 5y ago"When you're young, the temptation is maybe to think, 'More is more.' But a lot of the time less is more." -- Daniel Ricciardo
- ChrisMarshallNY 5y agoI am sorry he lost the money, but this quote: > My intentions were good, if naive. I helped both Yahoo and Viaweb. Business isn’t just about winning; it’s about helping others. Tells me that he's a decent chap. I mentioned in another post, that today's culture doesn't reward "decent chaps." In my own case, I don't care. I do my best to be a "decent chap," even though I'll never get rich that way. I'm clean-shaven, and it's important to be able to look myself in the eye every morning, or I'd cut myself to ribbons.
- awb 5y agoAnother moral to this story that I haven’t seen mentioned yet: Don’t give unsolicited advice. Not only was this advice to buy a different company not asked for, it was presented in a vague way: “They’re better than us”. If I was the CEO of Yahoo on the receiving end of that, I’d be thinking a few things: 1) You don’t know my business well enough to be giving me unsolicited advice. 2) You’re passionate about subjective opinions: “They’re team is better than us.” 3) You appear to be lacking confidence by buying into this subjective thought that another team could be “better than” yours. 4) You don’t lead with the important information, about why you think they’re better: Are they more efficient? More experienced? More creative? More careful? 5) Your passion and attention is placed on the future rather than the present and the more important task that I’m paying you for which is integrating your business into our ecosystem. The list probably goes on, but the phrase “They’re team is better than ours” raises a lot of red flags IMO. Looks like it ended well in the end as they sold for 2x to Microsoft just 6mo later. A great example of “failing up”, which happens to a lot of successful entrepreneurs.
- deleted 5y ago[deleted]
- novaleaf 5y agoI don't think the introspection need be so nuanced. The instinctual "Why are you shit talking yourself? What did you just let slip that I don't know?!?" Is just as valid a red flag.
- md8z 5y agoOr it could just be a drunk person running their mouth and a nervous exec getting spooked. No need to overanalyze every word of conversation to look for red flags.
- DiggyJohnson 5y agoWell if the speaker is drunk, then its exactly excusable is it? Seems like I would rather take the parent comments point than wave it away as poor communication skills on the part of the listener, or intoxication of the speaker.
- qwerty456127 5y ago> I wasn’t allowed to respond to him, and I wasn’t allowed to tell him why. This is ridiculous. I can hardly believe such requirements are legally allowed to exist.
- qwerty456127 5y agoTo whoever has downvoted: what if the person you were forbidden to respond to, the other company executive, was yor mother or your best friend?
- numair 5y ago> As a financially-insecure immigrant, I knew this deal would change my life. What is it with this guy and his desire for a hero narrative? First he took credit for the Like button, now this... His cousin Dara is totally insufferable in his lackluster position as CEO of Uber, but at least he’s honest about their very privileged upbringing. Is this a prelude to a political career or something?
- dangelov 5y agoAs a financially-insecure immigrant, that line actually helped me understand his mindset, and did not come across in any way as a "hero narrative".
- CarelessExpert 5y ago> What is it with this guy and his desire for a hero narrative? LOL, that's practically every SV CEO. They all want us to believe that a) they were the underdog, and b) they were the hero in their own story. What I can never tell is which ones are doing it deliberately as part of a PR strategy and which ones simply lack the perspective to realize they're doing it at all.
- kwertyoowiyop 5y agoPorque no los dos, as they say.
- InternetPerson 5y agoThere are many reasons why Yahoo may have called off the deal. I doubt it was this one single comment.
- bmitc 5y agoI know we're on a forum associated with a startup accelerator, but something just rubs me wrong on these waxing poetic startup stories. It's like these people live in their own little world, where companies and little "ideas" and massive sums of money are just pawns in some game that ultimately doesn't matter. It's a sort of entrepreneurial aggrandizement, and there's a lot of unnecessary adulation and cult of personality. There was some reply there that was basically "I lost tens or even hundreds of millions of dollars because of a dumb decision too but I have no regrets". Seriously? That's immediate retirement money for me, my immediate family, and then enough left over to pursue pet projects, volunteer work, and non-profit(s). This guy in the posted Tweet made an idiotic decision that killed an opportunity for himself and his employees, and he seems okay with that and even fond of the decision. Kind of weird to me.
- rsstack 5y agoHe has enough money for him and his children to retire comfortably. _Now_ he doesn't need to regret it. In 1998 he probably regretted it a lot when he realized what happened.
- meowface 5y agoSometimes there are people who really are temporarily embarrassed (hundred-)millionaires.
- khazhoux 5y agoHa, I noticed this part in the twitter thread: > Yahoo offered $125 million > As a financially-insecure immigrant, I knew this deal would change my life. I enjoyed how he specifically qualified that this was a lot of money for a "financially-insecure immigrant." Um... no. This is a lot of money for 99.999% of human beings on the planet. A good read though.
- prewett 5y agoAnother interpretation is "[because] I was a financially-insecure immigrant, I knew this deal would change my life [by clearly achieving the financial security I had been constantly worrying about and seeking to get][and therefore I was nervous that the deal might not happen]". It's not that the amount of money was larger for him than other people, but that having $125m/n founders was so clearly financially secure.
- buescher 5y agoAm I the only one who reads these stories (others have linked to his Steve Jobs story - he was, um, not honest enough for Steve Jobs) as "I almost got acqui-hired twice by names you'd recognize but flunked the job interview both times" rather than as dashing tales of dealmaking derring-do?
- raydev 5y agoWhy do you think your initial reading isn't his intent?
- buescher 5y agoI think it’s pretty plain that he’s cuing up the stories - which I’ve enjoyed by the way, he’s a good raconteur - as “what I learned about negotiation that day” rather than “how I didn't get hired”. The pivotal moments in his stories may not have actually been what kept the deal from going through - he alludes to this in the yahoo story, even, but discounts it.
- jiveturkey 5y agoouch. I want to bask in the schadenfreude and the superiority complex over this noob, but I cannot. The way he relates the story is deceptively endearing. I like this guy and would work for him, even knowing that he so deftly killed his own companies in the past. I mean, taking him at his letter. It is all a lie though.
- khazhoux 5y agoYour comment was the fastest roller-coaster I've ever ridden.
- armchairhacker 5y agoTdlr; he was "too honest" because he literally told the buyer that there was a similar company with better engineers - essentially that there was another company which could do the same exact thing much better. So they bought the other company instead. Were the engineers objectively "better" than yours, or was there still something your company offered that the other did not? If the other company was essentially better, than you're lucky Yahoo didn't realize and you got that deal in the first place.
- cratermoon 5y agoI admire him for his honesty and not letting greed and ambition get in the way of being a decent person.