20 VC FF 032 Jeff Seibert on Lessons From Being Acquired By Twitter & Box and Now Leading Twitter's Consumer Product



In an enlightening conversation on the 20 minutes VC, host Harry Stebbings interviews Jeff Seibert, Senior Director of Product at Twitter and co-founder of Crashlytics. Seibert shares his journey from a self-taught programmer to a successful entrepreneur, reflecting on the acquisitions of his startups In Crayo by Box and Crashlytics by Twitter. He emphasizes the importance of aligning with an acquirer's culture and strategic vision, ensuring continued investment in the product post-acquisition, and maintaining a balance between transparency and focus within a team during the acquisition process. Seibert also discusses his current role at Twitter, where he's excited about upcoming improvements to the platform, advocating for a mission-driven approach to entrepreneurship and the value of authentic connections in business.

Summary Notes

Introduction to Jeff Seibert

  • Jeff Seibert is currently the Senior Director of Product at Twitter.
  • He co-founded Crashlytics with Wayne Chang, which is now used on over a billion devices and was acquired by Twitter for $259 million.
  • Before Crashlytics, Jeff founded Increo, which was acquired by Box in 2009.
  • Harry thanks Nico Bonassos at General Catalyst for the introduction to Jeff.
  • The interview is set to explore Jeff's journey through three chapters: the acquisition by Box, the acquisition by Twitter, and life at Twitter.

"Well, joining us today is an absolutely phenomenal entrepreneur and currently senior director of product at Twitter, Jeff Seibert." "Prior to his role at Twitter, Jeff was the co-founder, alongside Wayne Chang, of the crash analysis tool Crashlytics, which I believe is used on over a billion devices today." "As before, Crashlytics, Jeff was the founder of Increo, which was Box's first ever acquisition in 2009."

These quotes introduce Jeff Seibert as a successful entrepreneur with a significant impact on the tech industry through his ventures Crashlytics and Increo, both of which were acquired by major companies.

Jeff's Early Interest in Technology

  • Jeff grew up in Baltimore, Maryland, an area not known for computer technology.
  • His interest in technology was sparked by receiving a book on Mac programming as a child.
  • He spent 15 years coding for several hours a day after being inspired by creating a simple Mac application.

"I grew up in Baltimore, Maryland, which is not a bastion of computer technology." "In 6th grade, my parents sort of out of the blue, gave me the book Mac programming for dummies." "The moment that text turned orange, a light bulb went off of my head. And I thought to myself, oh, wow, I can make any piece of software that ever exists."

Jeff's early fascination with technology was ignited by a programming book his parents gave him, leading to a lifelong passion for coding and software development.

The Foundation of Increo

  • Jeff attended Stanford University, where he was deeply involved in computer science.
  • He and his friends met regularly to discuss business ideas, aiming not initially to start a company but to train themselves in evaluating business concepts.
  • They founded Increo to facilitate idea sharing and collaboration online.
  • Increo's name represents a blend of innovation and creativity.

"Finished up high school in Maryland, went out to Stanford for college." "We decided, okay, let's just be a little more practical. Why don't we build something to help people share and iterate and improve on their ideas?" "And so we started a company called Increo. The name came from sort of the combination of innovation and creativity."

These quotes detail the origin of Increo, from the initial brainstorming sessions at Stanford to the practical decision to create a platform for idea sharing and collaboration.

Acquisition of Increo by Box

  • The acquisition of Increo by Box is the first chapter of Jeff's journey to be discussed.
  • Raising funds in 2009 was challenging due to the economic climate and investor caution.
  • Jeff and his team had previously raised a seed round but found it difficult to secure additional funding, meeting with numerous firms without success.
  • They realized that their approach to meeting with too many firms was not effective.

"So, leading up to the acquisition by Box, what was it like going to Sandhill Road to raise in 2009 with the obvious financial turmoil only the year before?" "It was really a fascinating time in the valley and incredibly difficult to close any round, I think, unless you had just tremendous revenue growth and numbers."

These quotes capture the challenging fundraising environment during the financial crisis of 2009, which ultimately led to Increo's acquisition by Box.

Jeff's Reflection on Fundraising Timing

  • Jeff reflects on whether they waited too long to raise funding, leaving them in a desperate position.
  • He acknowledges the tough macroeconomic conditions and investor reluctance to commit to new investments during that period.

"You said there you had six months left to raise that funding. Do you think you possibly waited too long and left too little time, and so you were put in a rather desperate position? Or was it more the fact that the macroeconomic conditions were extremely tough and there was no investment around at the time?"

This quote prompts a reflection on the timing of fundraising efforts and the impact of external economic factors on the ability to secure investment.

Fundraising Timeline and Misconceptions

  • The average fundraising round takes four to six months to close.
  • Founders often underestimate the time needed for raising money, expecting it to happen in as little as two weeks.
  • It's important to start considering alternative options early on, not just when funding seems unlikely.
  • The speaker's company began seeking partnerships with only two months of runway left, which was not enough time and led to pivoting towards acquisition.

"I'd say we had the right amount of time to raise money, which was six months. And if you look on the data, the average round takes four to six months to close."

This quote emphasizes the importance of having realistic expectations when it comes to the timeframe for securing funding.

Strategic Alternatives to Extend Runway

  • Accelerating charging and striking partnership deals were considered to extend the company's runway.
  • The company considered leveraging its assets, like document preview technology and licensing, to improve its financial position.
  • Starting partnership discussions with only two months left was too late, forcing a pivot toward acquisition.

"So we decided, hey, okay, what if we accelerate charging? What if we strike a bunch of big partnership deals? We can power document preview. We could license our technology."

This quote highlights the strategic thinking behind trying to find alternative revenue streams or partnerships to extend the company's financial runway.

Negotiation Leverage in Acquisition

  • Having more time would have provided more leverage in negotiation for a higher company valuation.
  • The speaker's company had a weak negotiating position due to the limited runway.

"Completely? Yes, because they were well aware that we had a very weak negotiating position because of our Runway."

This quote confirms that time constraints can weaken a company's position in acquisition negotiations.

Transparency in Company Culture

  • Full transparency, especially during fundraising or acquisition, can lead to stress and reduced productivity.
  • It's the CEO's job to moderate the emotional roller coaster for the team.
  • The speaker's company was overly transparent, causing the team to experience every up and down, leading to paralysis.

"And so, as we were going through this, we were very, very transparent with the team, not only about the Runway, which I think you should be transparent about, but exactly what the different options were and how they were going."

This quote illustrates the potential downside of being too transparent with the team about every aspect of the company's situation.

Balancing Transparency and Direction

  • Transparency is important, but it must be balanced with the need to provide a clear direction for the team.
  • Employees join startups for specific reasons, and it's important to communicate how an acquisition aligns with the company's mission.
  • The speaker's company's acquisition by Box was successful because it stayed true to its mission and accelerated its roadmap.

"My belief on acquisitions and ipos, for that matter, exits of any kind, is that they are not about exiting. The entire point is to become more successful at your mission."

This quote explains that the goal of an acquisition should be to further the company's mission, not just to exit, and this should be communicated to the team.

Decision to Sell to Twitter

  • Crashlytics was approached by Twitter for acquisition despite having funding and being successful.
  • The decision to sell was influenced by Twitter's nuanced understanding of the mobile ecosystem.
  • Conversations with Twitter's executive team revealed a strategic fit that wasn't initially obvious.

"And we had had a bunch of conversations with Twitter. They were already using crashlytics. And so that's exactly right. When they approached us as an acquisition, we didn't understand the point."

This quote reflects the initial hesitation and eventual realization of strategic alignment that led to the decision to sell Crashlytics to Twitter.

Understanding of Mobile Development and Market Consolidation

  • Jeff Seibert and his team had a deep understanding of mobile development trends and market consolidation.
  • They predicted how mobile development would scale and how the mobile SDK (Software Development Kit) market would consolidate.
  • Their plan for success included making Crashlytics free and growing the team to build adjacent products, leading to the creation of Fabric.
  • The team's knowledge and strategic plan inspired confidence in their decision to be acquired by Twitter.

"And so they had a really, really deep understanding of how mobile development was scaling, how they believed it would continue to scale over the next few years." "It was a combination of sort of the confidence gained by their deep understanding and their plan to succeed in that environment." "And so they were willing to make crashlytics free."

These quotes highlight the team's comprehensive grasp of the industry's trajectory and their strategic approach to align with market trends, which was integral to their growth and acquisition strategy.

Negotiating Continued Investment in Acquisitions

  • Ensuring continued investment in a product post-acquisition is crucial.
  • Transparency about motivations and strategic importance is key for both the acquiring company and the founders.
  • Founders should negotiate deal terms that include commitments for future investments and internal support.
  • Understanding the acquiring company's corporate strategy helps determine how well the startup fits into their plans.

"And the biggest lessons I've learned from Twitter, and to be clear, they are incredibly professional at doing acquisitions." "It's really key for the long term success of the deal for the acquiring company to be completely open about why they are doing it." "Our biggest lesson from was, was not being able to guarantee future investment in the technology."

Jeff Seibert stresses the importance of transparency and strategic alignment in acquisition deals, and how these factors contribute to the long-term success of the acquisition.

Boston's Startup Ecosystem and Funding for Crashlytics

  • Boston's startup ecosystem is supportive and tight-knit, with many startup events.
  • Crashlytics received interest from local firms and sought bicoastal investment support.
  • Flybridge, a Boston firm, led the investment for Crashlytics, with additional West Coast funding.

"Boston was actually deeply supportive and deeply excited." "We went with a Boston firm, Flybridge, which led our investments."

The quotes reflect the supportive nature of Boston's startup ecosystem and the strategic decision to secure funding from both local and West Coast investors to bolster Crashlytics' growth.

Selecting a Co-Founder

  • Jeff Seibert met his co-founder, Wayne, at a Boston startup event.
  • Wayne's understanding of technology and intuition for what mobile developers want was impressive.
  • Wayne demonstrated his commitment and ability to execute by bringing in potential users for Crashlytics.

"Wayne had a really deep understanding of technology, despite being more on the business side." "This guy executes like crazy."

These quotes illustrate the importance of a co-founder's technical understanding and execution ability, which were critical factors in Jeff's decision to partner with Wayne.

Ensuring Proper Reporting Structure Post-Acquisition

  • Reporting directly to the VP of Engineering or other key decision-makers is essential for success post-acquisition.
  • Founders should anticipate potential reorganizations within large companies and secure commitments to maintain reporting structures.
  • Ensuring a stable reporting structure can help maintain focus and priority on the acquired company's product.

"What we didn't anticipate as a startup was that large companies also go through periodic reorgs." "What I would have done, in retrospect, is sought some commitment to continue to report to that person for x"

The quote emphasizes the need for foresight in acquisition negotiations, particularly regarding the stability of the reporting structure to ensure the acquired company's continued success and alignment with corporate priorities.

Acquisition Integration and Commitment Duration

  • Jeff Seibert discusses the importance of a commitment duration post-acquisition to ensure stability and integration into the company.
  • He suggests a six to nine-month commitment would have been optimal for their situation at Twitter.
  • A shorter term can be risky due to potential reorganizations within the acquiring company.

"I would have sought some sort of maybe six or nine month commitment to stay at that level so that we could really integrate into the company, understand what was going on, and then identify the best place to report into."

The quote highlights Jeff's perspective on the need for a defined period post-acquisition to effectively integrate and stabilize within the new company structure.

Decision to Sell to Twitter

  • The decision to sell Crashlytics to Twitter was influenced by the opportunity to leverage Twitter's name and offer the product for free.
  • Jeff Seibert emphasizes their mission to solve bugs in mobile and how being free would lead to universal adoption.
  • The acquisition allowed Crashlytics to achieve widespread distribution, being installed on over a billion devices.

"What Twitter offered the opportunity to do is to leverage their name, which we thought was critically important and would make us sort of the de facto standard in the space, and the ability to offer the product for free."

The quote explains the strategic decision behind selling Crashlytics to Twitter, focusing on the advantages of brand association and the goal of universal, free distribution to solve mobile bugs.

Post-Acquisition Experience and Culture at Twitter

  • Jeff Seibert values company culture highly when considering an acquisition.
  • He describes Twitter's culture as chill, friendly, passionate, and driven, with constant change.
  • The retention of their team and the tripling of its size post-acquisition is highlighted as a positive outcome.
  • Jeff transitioned from leading Twitter's developer platform to heading up consumer product, focusing on improving the Twitter app across various platforms.

"As you start looking at companies to potentially join forces with, I would put culture above anything else."

The quote underscores the significance Jeff places on company culture when merging with another organization, suggesting it's a critical factor in the success of an acquisition.

Career Highlights and Personal Favorites

  • Jeff Seibert's career highlight includes returning to Stanford to speak at a lecture series he once led.
  • He expresses his preference for the Daring Fireball blog due to his admiration for Apple.
  • Jeff shares that his favorite book is "How to Win Friends and Influence People" for its authenticity and perspective on sales and problem-solving.

"Honestly, it was actually returning to Stanford this fall and speaking."

This quote reflects on Jeff's personal sense of achievement and the meaningful experience of contributing to an academic community that played a role in his past.

Thoughts on Aqua Hires

  • Jeff Seibert is not in favor of aqua hires from the startup perspective.
  • He believes in staying true to a startup's mission, which is often not the focus in an aqua hire scenario.
  • Jeff argues that it's more fulfilling to pursue one's mission honestly, even if it means facing failure, rather than compromising through an aqua hire.

"I'm not a fan because I deeply believe in staying true to your mission and an aqua hire, sort of. By definition, you're joining for the talent you've built up, but not the product."

The quote highlights Jeff's stance on aqua hires, emphasizing the importance of mission alignment and the potential downsides of being acquired primarily for talent rather than the product.

Future Plans and Speculations

  • Jeff Seibert acknowledges that he cannot share all details about Twitter's future plans.
  • He hints at exciting changes and improvements coming to Twitter's product.
  • Speculations and rumors about Twitter's activities are mentioned as a point of interest from an insider perspective.

"We're entering a period of some really fun changes and improvements to Twitter's product."

This quote teases upcoming developments at Twitter, indicating a period of innovation and growth, while maintaining a sense of anticipation and confidentiality.

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