OPERATING DIVISION OR TECHNOLOGY TUCK-IN: BEING REALISTIC ABOUT WHERE YOU FIT IN THE ACQUIRING COMPANY
Indulge me in a ridiculous metaphor. Are you a kidney – an organ that will be transplanted into a new host? Or are you a soldier – a self-contained unit that will operate independently and report back up to the host?
Hearing this in plain language is the real test.
Will you shed your administrative staff, integrate your technology into a bigger stack, and disappear? Or will you remain intact after the acquisition, carry on with your mission, and report to the CEO of the acquiring company?
Organ transplants are tricky. Even if you match blood types and wash your hands carefully, the host may reject the transplant. Blood vessels have to be plumbed and anti-rejection medications administered. The new host body has generated itself around certain comfortable patterns, and it’s uncomfortable with the new tissue that was invented elsewhere.
I recently pitched a middleware solution to an enterprise software company. Obviously, I can’t disclose who the enterprise company is, so let’s refer to it by the code name “Soft Micro.” Generations of Soft Micro’s engineers had built the software and the current generation did not want to deal with a new technology. They didn’t want a new team stealing their glory and sucking up their time. We delivered a presentation about our middleware and even as they smiled and nodded and paid lip service to the idea of absorbing the new tech, Soft Micro’s team took advantage of every opportunity to quash the project. “We have good engineers;” “this middleware wasn’t created with our back-end in mind;” “we don’t have resources to manage a new team. . .”
The presentation was over, attendees were glancing at watches and phones, it felt like a dead end. Then one of the Soft Micro guys asked quietly, “how are you solving the cloud compression problem?” Our lead engineer gave a brief answer that led to another “how did you?” question and the meeting was transformed from a pitch to a collaboration.
Making the Transplant Work
Why did the meeting turn out successful? Because every good tech team is starved for talent. There aren’t many engineers that meet the bar. And if they recognize, in your team, the kind of talent they are looking for, then you become part of the solution rather than part of the problem.
Which is a long-winded way of saying that an organ transplant is really an acquihire. If you play your cards right, you will get value for the IP, but what you are really selling is the engineers who can make the solution happen in the new host.
The pitch is different if you’re a soldier. In that case, you aren’t selling a dreamy team; you’re selling a dreamy business. If your business can reliably win sales and bring home enough earnings to be accretive—and do it in a way that is clearly aligned with the buyer’s business model—then you might be invited to the battle. But only if you know how to pitch the business. And this is very different from pitching the product, very different from pitching the team.
So, where do you think your business fits in?