YouSaid · the spoken record

Matt Switzer

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25
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2017-10-02
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2017-10-02
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1
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  1. “So earlier this year, we acquired a company called Adespresso. And what's kind of really unique about them is they hit on all three T's in a really meaningful way. They had a really well designed, easy to use, yet powerful product. They're one of the largest Facebook advertising partners globally and are growing extremely quickly. And their team was amazing, smart, hardworking, brilliant. They're also based in Milan, so we get to go to Europe. And so it was just a great acquisition. And we really, it's been an awesome one to see flourish.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “You know, for me, it's probably people management. You actually had a friend of mine on the show a while back, Harley Finkelstein from Shopify, and I think he said it really well. And that leadership is often innate, but management skills are learned. And so people management is a discipline, I think, as my role in my career changed over the years from a doer to a manager. I think a lot about being a really effective people manager for my team.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “So, not sure about favorite, that's a really tough question. I did just finish a book called Red Notice by Bill Browder, which is particularly relevant, I guess, right now, but it was a really fun read”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “I think you often see startups trying to engineer the perfect process, trying to make the company look as perfect as it can possibly be. And I think probably the thing I like founders to know the most is really that trust is everything. It's more important that we feel as though we have a trusted partner to go and do something with rather than have a perfect company or entity to acquire. It's about the people and the trust associated with those relationships. And I think that's just a really important thing to note. We'd way rather someone just came up and talked to us about where the business was really at. And we can get over tons of challenges that approach has taken.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “The biggest thing I learned in my career is that people, especially in this business, people are the only thing that matter. There's no widgets created. We have no inputs. It's just people in their minds. And so I think just a relentless focus on hiring, retaining, and developing the best people. It has proven to me over and over to be the highest ROI activity I can do on a daily basis.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Absolutely. I mean, I think in most cases, founders have had very little to no exposure in M&A. And there's a real role for VCs to play to guide founders through that process, be a steady hand on what is an otherwise jarring and sometimes scary process. I think there's a real opportunity for VCs to play a constructive role in that process.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “We're pretty careful. We almost always try to work through the management team directly, or if we are interacting with VCs, we are typically trying to do so with the consent of management. In almost every case for us, we're looking to retain the team. And those relationships are built on trust, and we're very cautious and careful not to do anything that would affect or impair that trust early on.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “About the value that we ascribe to transactions very much around that how do we value that early work, that painstaking work that founders have done to establish that product market fit in a way that would be very difficult for us to do so.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “When we look at MA, we're often looking at it in the context of how we can solve a particular problem for our customers. And we take a very build-by partner agnostic view of solving that problem. And so I think when we look at it in that perspective, I think value creation or the value that we ascribe to a particular opportunity is directly proportional to how we would think about solving it in other ways. And so for companies of our size, and I think, and definitely for bigger companies, you start to believe that you can with hundreds or thousands of developers, you could probably build anything. And with a large marketing and sales team, you could probably take anything to market. But as everybody knows, the real magic is in that painstaking work that founders have done to establish product market fit. And so I think that's really when we think about ROI in Chengli, when we think”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “I think so. And it goes into the opportunity cost of M&A. I think people are an organization like us, and I think most acquires are going to be, they're trying to solve a problem with M&A. And there's going to be opportunity costs and risks associated with any path to solve that problem. And so I think to the extent that a startup has tight unit economics, I think there's just a better chance to have de-risked that particular path and that particular opportunity.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “I think generally unless you are in a situation where you absolutely need to sell, I think it's inadvisable to put a for sale sign in front of your company. I really think it's too much opportunity to destroy value. I think you can just leave too much value on the table. That being said, I think there's lots.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Well, I think less about the money that you've raised. I think it's more around the establishing of product market fit and to what degree you've established product market fit. And I say that in that, and I don't know if I'd peg a specific revenue number or raise number around it, but I think if you don't feel as though or you really understand your customer and your market and you're able to have predictable unit economics that you can throw dollars behind, I think that makes for a challenging M&A conversation and maybe too early to reach out. I also think reaching out too early just defocuses the business and can be a huge distraction. And businesses that have been built to sell early are really, really obvious to acquirers.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “As a general rule, I think founders should focus their energy on driving customer value and building a sustainable and durable business. That being said, as a founder of a company, I think your goal is to maximize the return for your shareholders. And I think most founders I meet and interact with take that responsibility pretty seriously. And return, when you get to tactical return can be realized in one of three ways. Either you can go public, you can turn into a dividend cash machine and dividend out money to your investors, or you can sell your business. And so I think today most companies and startups that are built are not built out as sort of cash flowing entities. And so that's not always a viable way to return capital or at least not top of mind for most of the startups we interact with. Going public requires scale, often 100 plus million dollars in revenue, which is large for a lot of the founders to be thinking about at least in the relatively early stages. And so I think it's reasonable.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “I think things that are relevant are definitely funding rounds are interesting. It could either signal that someone could be open or interested in M&A, or it could mean that they've gotten beyond what we could do a deal in and maybe they're out of our range. They've raised a really large sum of money. I think if we see big announcements around growth and inflection points in the business, I think those are particularly interesting to us, but also just a lot of personal things. You know, the comings and goings of executives and founders and milestones that those organizations are hitting, I think is less about sort of some, well, critical piece of information that's going to make us act rather than just getting a sense of the overall organization and really getting to know them.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Oh my God, that sounds exhausting. We have the thought of every tweak being an MA process or investigation scares me a bit. Ours is pretty human. We try to schedule regular touch points with the companies that we're talking to. We have a bunch of mechanisms that we use to follow people. So we have a bunch of search strings. We obviously use social a lot. A member of our team who just organizes a lot of inbound around some of the relationships that we have to make sure that we're not missing anything. And that's disseminated out on a daily basis if there's anything particularly high priority or critical or on a weekly basis. It's kind of a newsletter for the team of some of the goings on in our universe, but largely it falls upon each of the business and corporate development managers, the guys who are responsible for a particular area or sector thesis, M&A thesis, and they do an amazing job of staying on top of the companies. We use similar to VCs, we use CRMs in the back end to track hauls interactions we're having and making sure that we all understand the nature and where”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Well, I think there's a couple things. One is we're always engaging companies and talking to companies. That's a key part of the function. So I think I did a, we did a poll a couple weeks ago for something else. And I think over the course of a year, we will have substantive, and this is probably 30 minute at least discussions with over 300 companies over the course of a year. And so we're a relatively small acquisition team, and that's a lot of contact. And so we talk to and try to talk to every company. That is just something we focus on. And often we'll reach out over LinkedIn. We have a collectively across the company. We have connections to most of the big venture funds and a lot of companies in our space. It's a pretty small community of startups that are in marketing and social and a lot of adjacent spaces that we're involved in. So I think it's not really that difficult again. In most cases, a quick LinkedIn reach out or email it. And in most cases, and in many cases, they've already reached out to us previously to kind of build a part.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, so we try to engage really early in the process, and we often try to do it through partnering. You know, partnering is a key differentiator for Hoot Suite. And so if there is an opportunity for us to work together in a really easy, lightweight fashion early on, that's our strong preference. And I think if you look at the transactions that we've done disproportionately, they've been partners with Hootsuite before we've engaged.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “I think so. I think everybody accepts that for us at least talent is involved in every transaction that we do is very rare we pursue a transaction without that particular T being in place. And so I think people realize that relationships are built on trust and trust is built over time. And so the sooner we can get together with another party and start talking right away. I think that drives a lot of trust and increases the chance that the transaction is going to be successful.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “It's interesting. In the early days, it was very simple. Ryan and I would need to be aligned on the value it would create for the business, and then we would go and execute on it. I think now at 1,000 people, and I can only imagine how it becomes more complicated as you get bigger, but there is a lot of different stakeholders. And one of the biggest risks associated with M&A, as I think everybody in M&A quickly learns,”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “At all. I think what we typically see is that acquisitions will have a combination of at least two of the three, but we've done of the 10 plus transactions we've done in the last few years. I think there is a really varied mix of where that value sits. And we've hit almost every major permutation of those three.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “So we, and I think everybody has to have a framework of some sort, but ours is called the three T's. And these are really the three sources of value in a transaction and everything that we do here through the M&A process centers around these three Ts. And they are technology, talent, and traction. So technology can take the form of a product or an app or some IP. Talent can be a killer team, a brilliant founder, some really specialized knowledge potentially. And traction is revenue growth or scale. It could be something like a beachhead in a new geography or market or some amazing logos in a particular vertical. We try to be really dispassionate at the way we look at the sources of value and assess them as objectively as possible.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “We call market maps or sector overviews that lay out what exactly that market entails, who are the players in it, what are the opportunities for Hoosuit within that market. And these are pretty exhaustive, and the team works extremely hard at creating these because they form kind of the basis for the acquisition thesis that we then go and execute on.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Interesting, you know, I think first it has to start with company strategy. For a startup, you're busy, you're doing lots of stuff, and often codifying company strategy is not at the top of the list, but there's two big forcing functions for codifying company strategy. And I think one of those is financings and raising money. And then the other is M&A. And so I think when you figure out where you want to go, you need to chart a really clear path to get there. And really, if you think about the B2B software company that we are B2B software companies in general, your focus is pretty simple. You're responsible for bringing company solutions to their problems. And so I think you can arrive at solutions in one of three ways. You can either build something, you can find someone to partner with that has that technology you can acquire that capability. And I think so we go through that build by and partner thinking internally. We ultimately decide what areas we want to make acquisitions in.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Back in startups. But when I think about what I thought about the transactional nature of it, it did start to wear on me. And so I entered the world of venture investing. I joined a fund. Started an accelerator. We got to work with some amazing companies, and about two years into that, and I think this is a common story for lots of people that are involved in venture, is that I met an amazing founder and I wanted to get involved beyond just in an investment capacity. And I met Ryan. And so what we met outside of the context of this venture fund, I got to know him. He was amazingly generous. He let me get involved in this companies in the early days. And I've had an amazing experience. I've been lucky enough to have a pretty interesting set of responsibilities. I'm responsible here for fundraising, partnerships, M&A. Our product innovation team, whose we labs, and then the Hootsweed Developer ecosystem. So it's been a really, really interesting run. That was almost six years ago and raised a couple hundred million dollars acquired a bunch of companies. And now we're around 1,000 employees.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “So I was a big computer nerd in high school. I built PCs with my friend Al. I then went into computer science and I graduated in 2001, which was possibly the worst time to graduate with a computer science degree. When I caught a big break, I got a job at one of the few promising startups at the time doing pretty much whatever needed to be done. And against all odds, at that time, at least, the company grew to 700 people. We went public in 2003. And then when we sold the company in 2005, I went back and did my MBA. graduating again at probably the worst time to graduate with that respective degree. I ended up joining an investment bank, which is kind of why I pursued MBA school in the first place. I had an amazing experience there working on primarily M&A, but a whole bunch of debt and equity as well. And it was an amazing experience, gave me lots of exposure to execs and big companies. And for a lot of the same reasons other people enjoy investment banking, which I think was commonly referred to now as the dark side.”

    2017-10-02 · The Twenty Minute VC · 20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite · IDENTIFIED FROM THE TRANSCRIPT · source