Insights From Inside a Twitter Acquisition

ABOUT THIS EPISODE

It’s the dream of every startup — to get acquired by a big internet company. But what is that experience really like?

Marko Gargenta, Founder of PlusPlus.co, joins us to share what he learned when his previous startup, Marakana, was acquired by Twitter. He also shared other insights from his extensive startup career.

Some topics we cover:

-3 reasons why Marko agreed to let Twitter acquire Marakana

-The importance of having a support network — like a founders group

-Getting involved with startup groups like StartX and Sand Hill Angels

-How building a startup with investors differed from building one without

Want to reach out to Marko?

-Follow him on Twitter

-Follow him on LinkedIn

This discussion with Marko Gargenta was taken from our show Startup Success. If you want to hear more episodes like this one, check us out on Apple Podcasts.

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Welcome to start up success, thepodcast for startup founders and investors here you'll find stories ofsuccess from others in the trenches as they work to scale some of the fastestgrowing startups in the world stories that will help you in your own journeystart up. Success starts now welcome to start up success. Today we have MarcoGargenta as a guest, and I am really looking forward to our conversation.Marco is currently the founder and CEO of PLS Plas. He has extensive startupexperience prior to plus Plas he founded Maricana, which was acquired bytwitter and he's also involved with the sandhill angels and Starx. So I knowMarco is going to have a lot of helpful insights to share today so welcom Marcothanks for joining us today. Okay, good thin, her thanks fo. Thank you. Thankyou. I know you're really busy, so maybe you could start and tell us alittle bit about plus class and what you're doing there yeah so so ATCs apoutime, iaan a softer training company with my brother, that was Marconam,built it and then twiter acquired us in two thousand and thirteen. So we wentin house and basically what the leadership there wanted to do is enableto put teir engineers to do their best work right and see. If you can o thinkabout whatl, you need to do best work. You need to write skills. So how do weenable people to hear the right skills? So we came up with this concept ofPerre learning or people learn from one another and then to to do that at scale.We needed to build a system, so so we kind of build that toether it workdwell, and then I had I insit well if it works there, it's going to work, workelsewhere, right Ow, that other companies must have the same issues. SoI left tother a couple years later to start posspos to basically recreate themagic of what wo Di it witther elsewhere right. So essentially, whatwe do is enable democetizing learning at the technology companies first ailike that, because that's so critical for those companies right, you know-and it's and it's difficult to do, Wale, scaling and growing right. That's andyou probably add a lot of help to that process for them. I'm guessing, I hopeso I mean yeah. We are were fortunate to work with some really amazingcustomers, and so they challengeus a lot, as you can imagine right, butitether have it that way bit. Is that force you to kind, innovate and youknow make changes to what you're offering I'm guessing based on theirneeds. I mean that's got to be a good thing right to get that kind offeedback yeah, so so early on, we realized mean. Ultimately we want. Youknow to bet the default learning platform, for you know the world, butwe figured we studed Sillichon valley, because Silicon Valle is sort of Daving.The future of work so might as well have the initial refrencible customersbe from our own backyard right and so early on we signed up with sales. CIRSTwas our customer one and then Air BMB shopify Linktn Netflix ECET. So youkind of get the idea. So this are all like large friend name companies, andthis is something that's, I guess not very typical for entipriess companiesto start from, like a handful of like Markilaugus, usually what I see atleast with my Pierc, is you know they delin, SOM, smaller dels and then kindof work. Their way up, we sort of did it the opposite and the advantages ofdisadventagees to both approaches. So so so yeah we just kind of chose tostuff from the DOP down so yeah. It's interesting. You say that because whenyou just rattled off your client list, that was the first thing. I thoughtthat is such an impressive list of clients to start with especially salesforce as your first client. So I think...

...that's a testament to what you're doingand offering right. So that's exciting, and you mentionedsomething else that caught my air. You mentioned. You started Americana withyour brother, so is your brother involved with plus plus as well yeah, so him and I were ell, we had awhole team right, werabout ithin people at the time of tothe acquisition, so webuilt a previous company together, worked on that for eight years and thenwe got into into toother work ing to the university together. I left early alot two years im. He stayed for seven years at toter and he just joined us asa head of product. HES AME is ELEXANDERSO. He just joined this inSeptember and now is leading all the product development that at postcast sobut yeah. So it's our third enture together. I guess that's great to hearbecause on so many of these conversations I hear stories about youknow difficulties with founding partners, and you know among theleadership team and the fact that you know you're now on to your third kindof venture together and your siblings and says a lot about your relation. Youknow very complementary of your relationship, so tell me about Mark Hona little bit more and what it was like to go through the acquisition bytwitter, because I know a lot of people listening today. That's a dream right,yeah yeah! So so so at a time of theacquisition you know we were we basically on the company hundredpercent two of us. We had no investors, wewere services, company and Soplitteirapproaces about Acquisitionand Andso to your point, everyone as anEuntrepreneur. This is sort of like a dream. Come through right. Like a big,you know, Internet companies like approaching you and like offering oacquire it, but then, once I started like sort of peeling, the augment ofwhat Ha Deal looks like I was like wait. So I'm going to exchange what I own ahundred percent of fully control and understand for basically a bag of stockwhich at the time was private, so ai can sell it. Be I don't understand whothers business at all and see I'm going to be CEO Minos. Who knows what so I'mgoing to be like Alon, the Togin poll and and so what a lot of people don'tknow is that we, we told whether no at least a hand ful of times right. Wewere like. We don't think this acquisition actually makes sense for usright and so, but they kept pushing and being persistent. And then there was apoint in time where I saw something different, so basically it's it wasreally hard, like finances are very fazzy when you project four or fiveyears into the future, unless unless you'R CF is Berlan right Aa to do that,so I m Tis, like thes. Two options were very puzzy and it boiled down to. Ilooked for three things I look for. Where am I gonna see what it takes to intact billion people right, because wewere not doing that Markana then I was looking at. Where am I going to be getto meet amazing amazing people that are going to be inpirmen and a Mor Kan of aretiny team? So I was working the same thimg for many many years. I wasn't. Ididn't Brodtat as as much right and then see I wanted to see what it takesto build a company at that scale, and so it's like Coolyou know financis aside because I can't figure them out and I didn' Have Brooklyn. Let's justtake this: Let's, let's Tik Tho hat bill and let's go for the you know forthe joy right and see you know what we get out of that and so Dallas that wasa journey. I got those three things that I wanted to get and yeah that okay.That makes the story even better that...

...you said no a few times and then I likehow you broke down the three things that made you reconsider, because Iwouldn't have guessed any of those three things but they're so important.I wrote him down. I really like the last one, because you know I thinkthat's so important and did you find that all three of those things were met?Like you know you you, I mean I guess you did get to a billion people and I'msure you'v worked with amazing people at twitter are correct. Yeah I mean the people I was just blong.I was like a kin kid in a candy store right like, and this is to the N toAdjustto win public shortly afterwards, and so it was it was. You know we weredefinitely one of the top sort of Internet companies. At a time I got tomeet with some amazing people. Many of them are Ni investers in post PAS andalso like you know, twitter was my first full time job like to actuallywork somewhere right and I was like almost forty years old, and so it wasinteresting to to go to that experience of actually seeing what professionallyon company looks like from Esid right is Eso right, I'm sure that's, givenyou some good insight now as your building s plus right about scaling andhow to organize and what you know kind of teams you need- and so you know now that you're involved with plus PlasI keep hearing over and over again. That founders should be involved in afounder circle or network. How important it is. Are you involved in?Neither of those I mean. How do you, you know, get kind of real time, helpfrom peers that are doing what you're doing yeah so so, as as you probablyknow so, both Jeff Brooklyn and I and six other guys were part of a forumwhich spun out of Ontprenerce Organization Eo Forum, so so we go wayback, probably about fifteen years back and so and we made meet on a monthlybasis, and so this is my. This is my peer group. This is, you know the DAACESA guys I get to you know, interact with compare notes on everything likeit's really deep, the Plaba of trust, deep connection and it's tresixed. YouKnow Business Self, personal, family, everything right so so that peer groupis hugely profound. For me, my life,beyond just you know as an oentrepreneur right, you can think ofit as a man's group for women. I know that's more mbcomes more natural tohave those teps Riatn, I'm very fortunate to Hav that and then on theother hand, I also we joined storics, which is a Stanford to accelerateerprogram. We did that a couple of years ago, and so that's also wonderfulorganization, so yeah, okay and were you involved with either during theacquisition by twitter? So start us, so so not bit sodics, butI wor mast. Definitely that was the group that I leaned on.Okay, I was going no say. I would think that you would need somebody. You KnowGroup of people to lean on during that experience, because I'm sure I mean nowit's a success story and you know it's exciting to hear about, but I'm sure atthe time it was stressful, a bit too right, yeah it yeah. That was that wasdefinitely yeah. I was super super spressful. It was. It was sort of oneof these like radpill bluepill experiences that like like neoingmatrix and so like. What do you choose and you know we could have easilychosen to blue pill woke up and forgotten to the whole thing everhappened right and kept on a steady path. Instead, we we chose this redpill, which Gat US basically jump into a the abyss, hoping you know thatthings are going to work out. The way...

...they did, but we had no guaranteesright. That was a very Li if anyis, safet Y it and so kind of computingthat figuring that op and you can like a you know, you can try to do thatrationally and then your running to a whole bunch of robots, because youdon't have the data to figure it out. Rastianly ye can po emotionally likegoing deep down into like what feels right, and so definitely you know doingit by myself would be a very lonely experience so having a trusted group ofpeer to to Toleno- and it was, you know, very, very required so right becauseit's the decision, like you said, comes down to both the emotional and all. Youknow the factual, logical data points so were there did anything go wrong inthat acquisition? Where that you know that made, you second guess yourdecision that it just I'm asking, because it would be interesting tohighlight to founders that might be going through that right now. That then,ultimately obviously worked out because it's success story, but at the timemade you second gass, which choice you made. I mean so it's a yeah, I mean so so we joined. Ikeep talking about whether peacetime, toter and a wartime tutter right. Sowhen we joined whether it was the peacetime company right, an FREEIPO,everything was rosy if you like, if you wanted to spin up a project you justlike you get a headcouount you can like you know you can do anything, you wantright and then the IPO came around and then our regime changed. We became muchmore, you know numbers driven and we had you know public markets to reportto, and so so it was very, very different, twether overnight internallyright. I changed in that. Remember how I never had he manager well in that onefirst year. I think it went to like three or five managers. It's STHAT's, Ichange yeah. So so so I gots what they ask forcompity rapidly. Okay, yeah hose those are bigadjustments to make. Definitely, yes, yes, and so you mentioned just a fewminutes ago, startacts. What is that? Can you tell us a little bit more aboutthat? Yeah asthotics? Is it's a program that studied at Stanfordand the idea was to to support stanfords best and briesstarps, right and and the other idea in that was you know it? What I like aboutstartics and like other accelerators, that is that it's a non profit. So it'snot there to take a certain percentage of you equity. It's not you know. Soit's as a matter of fact, that's the kind of the the tag line right it's forentrepreneurs who don't need to give up aquity, and so so that resonated withme, and so we joined that in two thousand and nineteen en went to theprogram. What I really different people get different things out of the program,and so what I wanted to get out of that is that's sort of like a turning pointfor a while I was struggling with. Do I want to build what I call a RhinoCompany, so like a hundred million dollar company, that you know more orless fully control and and so on, or do I want to build a Unicorn Company whichyou know it's much bigger, but it's a different game in theire, proceconstaboth and I was sort of like evaliating those agaim bread Av to Bopill, sort of cenerize yeah, and so we, when we basically decided or I chose Iwant he- the Unicorn path that that's when starriks made a lot of sensebasically gave us a lot of like challenges to think bigger and what Ireally what I got out of. It is a thinking bigger, b, a got an amazingadvisor, Mymood Spenjaoni, so yeah. Those are the two things that kind ofGoen most I like that challenges to...

...think bigger because a lot of times Ihear that when I talk to venture capital partners that sometimes inpitches that they hear the founders are so you know, Nich focused they're, notthinking big enough. You know, and so I like how you phrase that I could seewhere that would be very helpful and I'm guessing you know you probablystill work with the mentor that you you know had from startaks today correct.Yes, we do yep yeah, that's Great and the nonprofit factor it does. It adds anice component to it, and then I saw that you're also involved in sandhillangel, so tell us about sanhell angels. I love the name so yeah yeah, so Sandhit, the sosenticalangels, is one of the oldest angel groups in Silicon Valle started abouttwenty years ago, and it was basically tharted as a couple of ex operators.You know getting together and saying: Hey: Let's do a deal flow together,let's invest together right, and so they intend to grow it into anorganization. We now kept it at about hundred members, and so we've investedin a couple F hundred startups and it's a pretty active group. The funny storywith San Heel is so Marcana was a services company right COSI. At onepoint I attempted to raise money and I actually pitched to San Hil. I actuallygot invited to you know: What's called a dinner meeting, which is a finalmeaning. This is two thousand and seven, and then I decided to scrabe that andgo back to just you know not raising money and owning the companine hundredpercent so anyway. So that was that was that and then fast forward, posttwitter. We suddenly had some liquidity and I was like okay well, I'm gonnaStart Angel Investing and to lung the robs. I need to surround my myself withpeople who are much better than me right, so I join Mary Esenil O I like that Lison yeah yeah, so on,went from pitching them to joining them to being on the board of theorganization and then, as I was starting plas pass. I was like okay.Well, maybe it's not a time for me to also pitch again to Sanilsa step fromthe board, and now sandhell is actually they led our friends and family round,so now their investors in the company. So there's e olnestl great trajectory,yes right, the keips is swapping the side of the table that Im sitting yeah.That's. How did you originally get hooked upwith them? I forget it was just one of the angel glups. You know, there's likethere's only a camful of reputable angel groups in thebay area, so it was one of them and yeah. So this Han, you know twothousand seven and you've had this projectory, where you've literallyplayed all these different roles with them. I really I love thateathat'sgreat, that's great, and so you know we have a lot of startup founderslistening and they always like to hear you know what challenges other foundersare facing. I mean what' s. What are you working on like right now, at Plus,plus, that's kind of you know a challenge for you. This quarter rightnow, yeah, you know so, and hen like being an Enterprese SASS company,there's sort of certain milestones right. So you know you start customerone an then you want you want to get to that magical product market fit than aone millionaearart and you know fondraising them. So there's all thisentire sort of sort of journey, and so what we're at right now is still honingin or go to market fit right. So while we have some amazing logos and they'reall renewing and all that with us, we don't quite have the motions of how toto terepeatably and predictably, we...

...have some of that. But it's not dial,then right. It's not it's not forally, quite scallable yet so that go tomarket is. Is Our next big challenge? So that's that's the main focus, that's a big one. I can see wherereaching that predictable nature, where you can start o forecast moreaccurately, would be very important for your organization yeah. Do you findit's a little more stressful with investors versus Marcana when you andyour brother own the company and we're doing it without or do they add? Youknow some sides, just their investment. Also, some helpful. You know knowledgeand insights. It's a great question and Iparticularly was strugging with that right. So in my entire ontopreneur realcareer twenty Sev years, I never raised money right like I build thisbusinesses, but I did it on my. You know on credit cards or you know on myown cash, and so I was struggling with that. But ID like it kind of changes,everything righ one yeah- and I remember I mean I had someconversations with which have Brooklan about that and, like prosen cost of,like you know, boothtrapping versus having investors and Sufwort, and thenthere was a point in time where I was like okay. Well, let's do what I call asafe test, T, let's Gind, of try it out and see what happens right and so forus, the safe tesk was to do a friends ome family around so fun fact, Jeff wasactually the the very first check yeah. Well, I know Jeff, so I'm sure you knowhe did the full financial scrutiny. So I would say the investment is a hugecompliment. So that's good yeah. So we did the Friends of familydond about a year ago and- and I was like woal actually there'sway more advantages to having investors and non like ou challenge this again,and I kind of appreciate that suddenly I had to you know we chose to do montlereporting W, which was like we had to have datadall in our numbers, anrprocesses, and so all that was actually sort of like a part of growing up, andso I enjoyed it. I I was like I shouldn'te,you know, that's if I look back. That's one thing I would have done earlierraise money earlier, then you know, kicking kicking down the road, so yeah. What a helpful insight- and I like howyou tied it to the fact that having these investors, you know, motivatesyou to kind of raise the bar a bit with your reporting back, and you knowreaching milestones, I'm assuming that's really interesting, and I likethe safe test with the friends and family round. That's a that's a goodway to kind of dip your towl into it. That's exactly it yeah it was. It wasdipping the Tou to see like what dis this going to feel like great, and it felt great so it was like. Okay,let's do Moreso yeah, that's great! That's great! Any otherinsights you can share with founders. I mean you have such a compelling story.You've really done so much yeah. I mean wote other things. I early on IA,overobsessed about having the right product keving the product market fitand what I meant by that is we kin of defined it as having customers at terenewing and expanding right, and so we LD. You know. I spent a lot of time onmy customer on customer success like making sure that that the product is,we are constantly proving it making sure it. You know if it's the customersneeds and they're happy and expending and renewing. So we did that well, butwe did that at the cost of not not focusing on getting more new prospectsinto the final, and so I over indexed...

...on product and customer success at Thacost of go to market and acuasision yeah, so it til was one like one thing.Looking back, I would have probably balanced that a little better. I wouldhave raised money earlier and I would have gotten you know. Somebody to youknow: Toan keep building the pipeline, so you know, I think it's a finebalance, because I was with a startup several years ago and they did theopposite. They pushed the go to market strategy too fast, and so we were in ahuge acquisition phase, but the product we kept having issues with the product,so it can go either way. So I you know the fact that I do think it's a finebalance. I mean- and it also I think, speaks to all the success you've hadthat. That's something you care about you know, but then you have to figureout. How do you get that balance? So it's interesting yeahsthat's, a goodone. Yes, so you know you've done so much you're involved with two GreatOrganization Sand: Hal Angel Startax, now you're working on PLS, plus. Iflisteners want to reach out for more information, learn about plus plus orsome of these other organizations you're involved with. What's the bestway to reach you IUL, probably imagine totherer is- is an easy way to reachout to me, I'm just mmrkog Marcog at my handle in Tiller. I'm also easy tofind on linked in, and you know places like that. So Yeah Great. Thank you somuch for joining us today. I feel, like you, shared a lot of real helpfulinformation for those that are on this path as well, and you know I know youhave even more success in front of you. So it's great to chat with you. You'vebeen listening to start up success to make sure you don't miss out on futureepisodes subscribe to the show in your favorite podcast player. Like would youhear tap the number of stars? You think the show deserves an apple podcast formore tools and resources for your own start up. Success check out, BerklandAssociatescom. Thank you so much for listening until next time.

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