Who among us hasn’t looked in the rearview mirror and wondered if an outcome might have been better if we’d done things just a little differently? Who hasn’t wondered, “What if …?”
Hindsight, Jay Shah knows too well, is 20-20, but he admitted Tuesday that the decision he and co-founders Aditya Bali and Mike McCauley undertook in November of 2012, to sell their company, BufferBox, to Google, might be one they’d do differently if they could do it all over again. It might have made more sense, Shah said, to have continued their startup’s journey on their own.
“I often get asked, when talking about the BufferBox story, was it the right choice to get acquired? In hindsight, would you do it again? Do you regret that?” Shah said, speaking to a lunchtime audience at the Tannery, during an entertaining and informative edition of Pizza with the Prez.
“Generally speaking, my answer is, for us to have realized the vision that we wanted, that we set forward, [selling to Google] was not the right path for us to take.
“I still believe that factoring in everything I know now, the value of attempting to realize the vision we had set out would have been greater than the proceeds of the acquisition.”
BufferBox was a Velocity startup that gave consumers the ability to collect purchases they had ordered online at a drop box using a discrete code, eliminating the need to be home for a delivery.
Shah, now the Director of Velocity, the University of Waterloo startup incubator housed at the Tannery, raised the issue of the BufferBox exit himself Tuesday as he discussed the often-asked question of whether Canadian startups sell too early.
The answer, he said, is always personal; there’s no cookie-cutter response. And, he says, exits have the benefit of generating the funds that fuel an ecosystem.
In BufferBox’s case, the company went from inception to acquisition in just 18 months. A little more than a year after making the acquisition and taking on BufferBox’s staff, Google decided to shut the project down. Did it hurt? Yes.
“It was painful,” Shah said, speaking to Communitech News after his lunchtime talk. “We were operating for a year trying to expand within Google before the inevitable shutdown.
“The first three months, we had an inkling [that] this wasn’t going the way we thought it was going to: From the speed of execution, from the commitment to the vision. The next nine months were painful.
“To some degree it was kind of like this slow death. When it finally came to that strategic choice – ’OK, we’re going to end this bet’ – it was like, well that might actually be less painful than trying to keep going.”
Shah told his audience – Pizza with the Prez is a continuing series of lunch hour discussions with local tech leaders – that there were good reasons why selling to Google made sense. Not least among them, the company was at a fork in the road. It needed capital to execute on the next phase of growth and had begun discussions with venture capital firms.
But, he said, the founders should have asked tougher questions of Google when the acquisition was being negotiated.
“Knowing what I know now, I’d probably ask very different questions going through the acquisition process, about what would happen to our baby once it was integrated,” he said.
Velocity’s Jay Shah, Tuesday at Communitech. (Communitech photo: Sara Jalali)
“We thought there was fundamental product fit with what Google was trying to do with their commerce portfolio. We fit into that infrastructure. It looked like a really good alignment. What we didn’t ask were the questions that helped us understand: What was the staying power of that bet within Google? Was that fleeting? Was that going to be core to their business? We didn’t ask those questions, only to realize it’s quite common for tech companies to make big bets and then abandon them.”
He harbours no ill-will toward Google for shutting the project down, realizing that’s “just what big companies do.” It was incumbent upon the co-founders to ask questions, to know what the potential outcomes were.
And yes, he wonders, sometimes, what might have unfolded if the trio hadn’t sold. Would the company have crashed and burned? There were good reasons at the time why that outcome might have unfolded.
Or would it today be a global success story?
“I believe the market opportunity was real. I believe there was money behind that market opportunity. I believe there were customers who would pay. I believe we could have capitalized on that opportunity.
“I believe we could have been successful, to some degree.”
The company, he said, had headwinds ahead of it. The founders needed to raise money. They needed to build and deploy hundreds of thousands of boxes.
“The big stumbling block could have been, let’s say we spent several million dollars rolling out that infrastructure. If we couldn’t convert some of those big players [like UPS or FedEx] to be users, the company was dead.”
The BufferBox shutdown notwithstanding, he says only good things have unfolded in the wake of the sale to Google.
“There were a lot of really good things post-acquisition,” he said. “I wouldn’t have had the opportunity to support our ecosystem with angel investments or seed funds. “[I met] amazing people at Google here and in Mountain View [Calif.].
And he’s continuing to support the local ecosystem by investing in a property redevelopment in the form of the former Budds department store on King Street in downtown Kitchener.
Would he do another startup? He wouldn’t rule it out. If it was the right project.
“It’s not a no; it’s not an immediate yes. Part of that is a sensitivity. Picking an activity as a thing I want to do next is a dangerous way for me to move forward, as opposed to picking an [activity that has] impact. That was part of the reason I left Google [and went to Velocity].
“Could I imagine a world where I think I can have my most impact through a startup? Yes. But I would only do that if that were true. I wouldn’t do it just because I want another startup.”
