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Take the Money and Run
- ca98am79 11y agogreat to see some other hackers from Akron on Hacker News. Sorry the acquisition didn't work out as you expected - looking forward to your next blog post
- a-priori 11y agoSounds like you made the right choice. When you're weighing certain money versus 'we think this company will be a big deal someday if we slog it out', it'd be silly not to cash out. As long as it's a reasonable offer, of course. Worst case you work for a couple years at the acquirer until your golden handcuffs run out, then start another company -- this time with money in the bank.
- bsenftner 11y agoChapter 2 please.
- nkohari 11y agoIt's coming soon, I promise. :)
- Navarr 11y agoI would very much like not to miss it, so I've subscribed via RSS.... however.... Your RSS file is completely blank! I'd fix that if I were you ;)
- nkohari 11y agoFixed! Sorry about that.
- greenwalls 11y agoI can't wait to read about what happened next. Great writing!
- abluecloud 11y agoNot directed at OP in particular, but with acquisitions that include shares, is there something that stops you from just dumping them straight away, essentially making it a cash only deal?
- DevX101 11y agoThere can be lockup periods in the contract that say you can't sell for some specified period of time
- nkohari 11y agoWhen we were acquired, Rally was a privately-held company, so our shares were illiquid. If the company was publicly-traded, we could have sold them, but there are often lockup agreements in place that restrict you from selling for a few months.
- deleted 11y ago[deleted]
- s73v3r 11y agoVesting periods.
- Cthulhu_ 11y agoI'm probably being petulant or don't understand American culture, but: > To avoid spending money, we'd been subsisting on a diet consisting largely of soup. [...] But now, we'd gradually started to feel like we might be able to afford to eat at restaurants again. No middle ground?
- lbotos 11y agoI assume he was alluding to "ramen profitable": http://www.paulgraham.com/ramenprofitable.html http://www.paulgraham.com/ramenprofitable.html Some people actually try and live off of Ramen.
- deleted 11y ago[deleted]
- s73v3r 11y agoWhich is a terrible thing, because those things are so bad for you.
- yellowapple 11y agoAs are all the best things in life.
- learc83 11y agoEach ramen packet has about 400 calories, add in a few vegetables and a little meat and you've got a 500-600 calorie meal. Nothing in instant ramen is inherently bad for you (unless you have high blood pressure and are sensitive to sodium intake--and even then, just eat less of the seasoning). Sure living off of nothing but instant ramen isn't great, but neither is living off of nothing but broccoli.
- danneu 11y ago> Nothing in instant ramen is inherently bad for you Hydrogenated oil is inherently bad for you, for one. I'd be astonished if nothing else on this list is inherently bad for you: http://i.imgur.com/sHJldVY.jpg http://i.imgur.com/sHJldVY.jpg
- ph0rque 11y ago> Eventually, we'd come to learn how wrong we were, how hard the road ahead of us would be, and that selling the company would mean the end of what we'd worked so hard to build. But that night was for celebrating. So ominous... any hint as to what happened before the next blog post installment?
- BinaryIdiot 11y ago> So ominous... any hint as to what happened before the next blog post installment? Looks like they started a new company called TaskTorch. Considering this acquisition happened in 2010 and TaskTorch hasn't really launched yet I'm going to assume they stuck around big company for a few years, hated what they were doing to the software they loved to build and eventually quit after taking their sticking-around bonus. Good way to announce your new company if I do say so :)
- polysaturate 11y agoSounds like some 4 year vesting...
- mmorris 11y agoAnother little hint from the previous blog post: > The weakness of the design of the Zen UI also contributed significantly to the failure of the product after we were acquired, but that's another story. [Edit: link to other blog post: http://nate.io/posts/the-second-time-around.html http://nate.io/posts/the-second-time-around.html]
- hitekker 11y agoA very well-crafted story. Excellent and unpretentious: thank you very kindly for writing up your experience getting acquired, OP.
- sg_gabriel 11y agoHi Nate, thanks for sharing your story. I think it's interesting because my co-founder is also my wife. And it's an interesting dynamic to say the least. If you don't mind me asking, what are the roles that you play individually? Just curious ;) For myself, I'm the backend engineer and devops, while my wife does the design and front-end engineering.
- nkohari 11y agoRoughly speaking, with Zen (and now again with our new startup TaskTorch), I was in charge of the technical side of the business, and she was in charge of anything non-technical (finance, marketing, support, etc.) Niki is an industrial-organizational psychologist, so her viewpoint is completely different from mine as a software engineer. As a developer it can be hard for me to see past the software sometimes, and Niki's perspective helps quite a bit.
- sg_gabriel 11y agoVery cool! I can totally see where you are coming from. I also tend to get stuck in the minutiae of software sometimes, and it may be empirical data at best, but I feel that women are sometimes so much better at seeing things from the user's point of view, and have a better sense of empathy for the user. I'm glad to see that you managed to have such a close and complimentary working relationship with ur SO. All the best for your new startup, and am looking forward to Chapter 2 of your blog post!
- atmosx 11y agoSo basically, you've build the entire app yourself, right? What kind of lang/framework did you use?
- nkohari 11y agoZen was ASP.NET MVC, SQL Server, and a big mess of jQuery. TaskTorch is React, Node, and RethinkDB.
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- jameshk 11y agoInteresting and well-written. Thanks.
- giulianob 11y agoWhen did you guys get acquired? I used AgileZen a couple of years ago at a large company and I'm curious if it was before or after the acquisition.
- klink008 11y agoI currently live in Columbus and actually attended CodeMash this past year. Its great to hear about people in my own back yard, so to speak, that have a successful start up. Typically you only hear about them in silicon valley. Great story and i'm looking forward to the next installment.
- kmeves 11y agoI live in Columbus too. Its a huge start-up city. Some label it as the next Silicon Valley because of Battelle, Ohio State, and the SIGNIFICANTLY lower cost of living.
- kross 11y agoCliffhanger! Looking forward to the next installment. These types of posts do a great service to others, I read many before selling my first company. The structure of my deal was largely based on the lessons learned from others with which I read about in the blogs posted on HN.
- exelius 11y agoAah, so it sounds like one of the big reasons you sold was because of imposter syndrome? I don't mean that negatively -- I feel one of the things that comes with experience is you realize that nobody knows what they are doing. This dispels the impostor syndrome pretty quickly. Once you think you know how a business or industry works, you develop patterns to solve it. This can sometimes work against you because it can blind you from the change happening as other people figure out different and possibly better ways to do things. But I assume you already know all of this, and that's what's coming in part 2 :)
- mayukh 11y agoSo true. I've switched industries a few times and by now you'd think I'd get it. It still takes me some time to get up to speed with the 'dynamics' of the space/industry I'm working in and the realization everytime is that it is truly a con-fidence game. There is no consensus on the one 'right way' to do things and anyone who spouts with religious fervor that their way is the only way is being disingenuous or worse really believes the horse-shit they spew
- exelius 11y agoYeah, though often you have to publicly over-advocate your solution as being the only "right way" ("Why my novel carrier pigeon-based NoSQL database is eating the world") just to get any visibility around your product. Of course your solution isn't right for everyone, but the people who it's not right for probably know that already, and the people who it might be right for have a higher chance of seeing it.
- jodrellblank 11y agoOr they have the best way. Someone has to have the best way.
- themodelplumber 11y agoHahaha. That is true. One of my favorite ways of getting used to this is thinking of my biggest competitors as friends (or trying to). I would say "keep your enemies closer" but I really don't think of them as enemies. On the advice of my business coach I usually call my competitors to chat every once in a while and I think we mutually realize that we're just trying our best not to go obsolete. We also need each other's help from time to time. And we usually don't have quite the same business interests, so this naturally makes our businesses each appeal to a slightly different type of client. When a new competitor shows up, they are usually inexperienced and either won't last long or will end up joining our club of friends. That's just how it works. (Small business owner)
- leftnode 11y agoI loved AgileZen when it was first launched and I was a huge champion of it at Quickoffice. Definitely helped keep us organized and on track. Thanks for the write up and behind the scenes details - can't wait for part 2.
- AwesomeGorilla 11y agoHow does AgileZen compare to Trello? Looks like a very similar kanban-based product.
- karmakaze 11y agoI still use and love, AgileZen for my lighter personal projects. Even started an Android app Zendroid.
- bontoJR 11y agoVery nice story, I have just one question: why did you guys not look for fundings or apply to something like Y Combinator? Also, I know there are a lot of other similar stories around the US. I would really like to find and ear something similar in an European country, in the hi-tech industry: a small startup doing a good job, with a tiny but prepared team, being lately acquired by a larger competitor. Is there any similar story based in the old-continent?
- nickstinemates 11y agoIf you can bootstrap, why raise unless you have a major barrier to achieve success?
- s73v3r 11y agoOne of the reasons they gave for selling was that they weren't sure they would be able to take the product to the next level on their own. It sounds like they would have had to seek funding at some point if things didn't change.
- emptybits 11y agoThe stock answers to "why raise?" reduce to 1) to achieve the same success faster, or 2) to achieve a larger scale of success, or 3) because raising money drops you into a new world of experience and learning and future networks. I'm not suggesting any of the above are superior paths to what was chosen in the article, BTW.
- nikibeth 11y agoWe wanted to focus on building the product and getting it to market as quickly as possible, to see if people were even interested in what we were doing. Also, I was still in graduate school and under contract to teach an undergrad cognitive psychology class, so moving for any period of time wasn't an option. We were able to raise a small amount of grant funding, but the acquisition talks started soon after. We never spent any of the grant and ended up paying it all back once we were acquired.
- srameshc 11y agoGreat story and well written. I always like stories with happy ending :)
- nkohari 11y agoYou might be disappointed at the rest of the story, then. :)
- matthewrhoden1 11y agoI feel like this is the next episode of game of thrones that I'm waiting on, looking forward to reading it
- mjcohen 11y agoRed wedding.
- billmalarky 11y agoI'm on the edge of my seat!
- robterrell 11y agoI, for one, am very curious to hear what happened next... I came very close to accepting your offer to work at AgileZen three years ago ;) Good luck with the new startup!
- arenaninja 11y agoMan, that last paragraph was so sobering. Everything up to that point made it seem like it was a decent deal that they could live with
- thebouv 11y agoI know. Now I want to know more about this story after that last paragraph. Up to that point I was excited for them.
- codewithcheese 11y agoGot me hooked :) Looking forward to the next post. Please fix the rss, so I can get the next post in my inbox (ifttt).
- nkohari 11y agoRSS fixed! Sorry about that.
- codewithcheese 11y agogreat, thanks!
- bengali3 11y agoTeam of 2 going into meetings to talk acquisition very exciting! But makes me think the deck is stacked pretty unfairly (always is) but you might have been able to improve your odds by hiring some M&A experience for the day. Would you have sold to Atlassian if they had offered? If so, did they know your company was in play?
- sumedh 11y agoJust out of curiosity, can you share a ballpark figure about the buyout price. 5,10,20 Million?
- willu 11y agoGiven their size and stage at the time it was likely south of 7 figures or very low 7 figures. Considering their acquirer IPO'd soon after, though, the stock portion probably grew in value significantly. (No inside knowledge of course, but people's perceptions of acquisition windfalls tend to be skewed higher than reality)
- roel_v 11y agoThe article says they had 70k turnover. Take http://www.quora.com/What-are-typical-exit-revenue-multiples-for-SaaS-companies-at-sub-5mm-5-10mm-10mm+ http://www.quora.com/What-are-typical-exit-revenue-multiples... as a ballpark estimate for a multiple. They'd have been very lucky to be paid 7 figures. 5 million is a lot of money. Sometimes I feel like it's 1999 all over again - people spouting 200k salaries and 8 digit 'acquisitions' of < 10 people companies as 'normal'.
- ryanSrich 11y agoAt $70k ARR I'd guess no more than $500k. But that's just a guess.
- jlebrech 11y agowhy dwell on one good idea all your life, if you know you can come up with products sell it and offer the world more things.
- nkohari 11y agoWorking on that right now, actually.
- kpennell 11y agoWhat made you not want to move to Colorado?
- michael_h 11y agoIf you're trying to escape the cold, Colorado is not the place to go.
- kpennell 11y agoI live in Boulder and am pretty sure this Winter has nothing on an Ohio winter.
- myth_buster 11y agoBoulder gets around 300 days of sunshine. Also it's not wet cold and hence you don't feel the cold much. But the sub-zero overcast days is a different story. I got the impression that they moved to NC. We weren't keen on moving to Colorado, but strangely enough, they had an office in Raleigh, NC, where we already had several friends. It felt like serendipity.
- nikibeth 11y agoWe were actually interested in moving to Raleigh, NC before we knew Rally had an office there. It's 8-9 hours to drive from Raleigh to Akron, it's 2 hours to the beach, and anytime you already have friends in an area, it helps.
- kpennell 11y agoThanks!
- jsingleton 11y agoGood read. Can't wait for the next part. Keep it up. Oh and thanks for Ninject BTW! Maybe you should alter the footer on http://www.ninject.org http://www.ninject.org to point to http://nate.io http://nate.io.
- serve_yay 11y agoSo the takeaway is, start your company in San Diego or Thailand or something :)
- Rainymood 11y agoThank you for this article. I loved it :) >It was January, and the weather was fucking bleak. I was hooked from the first sentence. Please keep doing more of these.
- squigs25 11y agothen again, your username is Rainymood :-)
- myth_buster 11y agoI posted this above before I read yours. You also seem to have a knack for writing. Reading the beginning, I got the The sky above the port was the color of television, tuned to a dead channel. feel.
- Animats 11y ago"The sky above the port was the color of television, tuned to a dead channel." That's so last-cen analog TV.
- PhasmaFelis 11y agoIt amuses me to think that millenials would interpret that line as meaning that it was clear and sunny.
- myth_buster 11y agoMuch like how poetry will mean different things for different generations. Perhaps 100 years down the line nature would mean vicious tyrannical entity.
- deleted 11y ago[deleted]
- ssharp 11y agoI was a little excited to read about Akron and Sandusky on Hacker News and then, of course, they're used for the backdrop of how "miserable" winters are here in Ohio.
- billmalarky 11y agoWell, if it looks like a duck ;-)... (Born and raised in Columbus here).
- ssharp 11y agoWeather seems like a commonly-stated reason for leaving Ohio. I'm from here, so I obviously take note of it, but I do wonder if people commonly talk about leaving places like Boston and NYC for warmer climates. Those areas seem to have equally miserable winter weather.
- strangetimes 11y agoThis was posted on HN a few days ago, which largely discusses how the weather in LA is luring New Yorkers... http://www.nytimes.com/2015/05/03/style/los-angeles-and-its-booming-creative-class-lures-new-yorkers.html http://www.nytimes.com/2015/05/03/style/los-angeles-and-its-...
- xenophonf 11y agoI hate Cincinnati winters, but for the wrong reason: There isn't enough snow! (I miss sweet home Chicago.)
- billmalarky 11y agoIn my experience part of what makes Ohio winters so bad, is they are wet, cold, and muddy. It seems like every time it snows in Ohio, all the snow melts the next day and creates a mud pit. At least when it snows in NYC, the snow often sticks around long enough to be enjoyed.
- antognini 11y agoAs someone who moved to Ohio from California for grad school, the big problem I've had with the winters is just the lack of sun. [1] It's as though sometime around the beginning of November a gigantic cloud descends on central Ohio and doesn't lift until late April. Boston and New York get cold, but I would find them much more tolerable just because the sun is out more often. I had heard this complaint from the other grad students when I was visiting here, but it's hard to understand how important the sun is for your well being until you've lived without it for months at a time. [1]: For reference, Cleveland, Columbus, and Cincinnati consistently rank in the top 10 cloudiest cities in the US. (http://www.currentresults.com/Weather-Extremes/US/cloudiest-cities.php http://www.currentresults.com/Weather-Extremes/US/cloudiest-...)
- vladsanchez 11y agoCongrats, I'm glad you sold it! It's Rally's acceptance that their product is a PIECE OF SHIT and they needed a RELEVANT product out fast! Don't look back, my friend, focus on your own backlog. I know the thunder hits the same tree more than once. Stay Thirsty!
- user12340987 11y agoTake mine please!
- Throwaway1224 11y agoDon't ever... EVER... get drunk at a corporate function. EVER.
- njloof 11y agoI'd love to read the followup article -- got an RSS feed?
- mattmaroon 11y agoCongrats man! We met a couple years back, glad to hear things ended up going well for you guys! If you're ever back in Akron let's grab a beer.
- nkohari 11y agoSure Matt, I remember! We come back every now and again, so we'll have to take you up on that offer.
- darklajid 11y agoWhoa, this was fun. The story felt like a typical HN submission. I read it with interest, but expected a 'morale' lesson at the end. Instead the story is quite straight forward, but what threw me off is the name below the article (and - now I see that Nate submitted this as well). I'm a fan of Ninject, following the author on Twitter. Nate, you've got a couple of beers waiting for you in Germany, if you ever want to remind yourself of the bad weather in Ohio by visiting us here.
- nkohari 11y agoThanks, on all counts. :)
- dreamcompiler 11y agoThis seemed counter to pg's advice about corp dev (http://paulgraham.com/corpdev.html http://paulgraham.com/corpdev.html) until I read the last paragraph.
- ScottBurson 11y agoI've used Rally and don't care for it. It wouldn't surprise me at all if you've come up with something that's actually better. I'll take a look at AgileZen... though now that Rally owns it, I don't know that I'd use it because I'd be concerned they would screw it up.