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During the spring and summer of 2018 I was negotiating a possible acquihire of Checkly / moi with Datadog. I'm only writing about it right now because Datadog recently launched their Synthetics product — the product I would be involved with as some form of product manager.
This post details how this all came to be, what steps we took in the process and some reflections on the whole thing.
First contact
In March '18 I got an email from a Datadog representative inquiring about Checkly and if a possible integration would be beneficial for both our customers. I "jumped on a call" and we chatted about how such an integration would work: think dev accounts, testing and marketplace stuff. This was pretty similar to when I added the Pagerduty integration.
Looking back now, this initial call was probably a thinly covered first reconnaissance mission. They just wanted to see if I was not some crackpot or weirdo, as very shortly after, I received a follow up message along the lines of "a closer partnership" between Checkly and Datadog.
This was also the moment I looked up what a Business Development department does. They acquire businesses (mostly) or in corporate speak "develop and implement growth opportunities within and between organizations".
Takeaways
- Integrations between SaaS companies can lead to much more than just the integration.
- Super pro tip: Look up what a department or job title means! 😱
The meetings start
We plan a follow up Zoom call. This time I talk to a product manager and a developer. We discuss all kinds of things, from the Datadog product, our backgrounds and what general direction the company is going.
Nothing top secret is discussed, no offers or compensation is mentioned. However, the reconnaissance is over. We are officially and openly courting each other: I am trying to figure out if this is something I would be interested in. They are selecting a candidate as I'm pretty sure they are looking at other people and companies too.
Luckily, we seem to be getting along quite good. The talks flow easily and there are no sore thumbs. So in the beginning of April we plan an in-person meeting over two days at the Paris Datadog HQ. This is getting exciting! I love France 🇫�� Viva la revolución!
I'm going to meet some engineers and, at my request, the two founders of a startup Datadog had acquired at least a year earlier. I want to pick their brains and hear what it is like for them to be gobbled up by a larger player.
The NDA and why it does and does not matter
Before my trip to Paris, we put in place an NDA or actually a Mutual Confidentiality Agreement. The agreement assures we can talk openly about basically anything technical like source code and we can share notes, documents or analyses.
Of course, you need to have this. It is a sine qua non. But if you take a step back, this may seem a bit ridiculous. All NDA's between solo bootstrappers and large, well funded companies are from a practical side really one sided if things go south.
Why? Because I could never in a million years muster a legal team to actual enforce any of the terms if they were to be broken. Am I sour about this? Totally not. It is a signal the company is taking you serious and is also getting rid of any blockades in sharing their information with you.
Also, we are not courting each other because of the value of my code, notes or documents: all the bits of infrastructure around Checkly are not the actual thing on the table. We are talking because they want me and my ability to execute and deliver. Building a SaaS exactly in the space of interest has demonstrated that beyond any CV or diploma. This is about an acquihire, after all.
Meetings continued
Back to our meetings. I hop on a plane (TXL ✈️ ORY) and meet the next morning at the Datadog HQ in the Marais neighborhood. We drink coffee, we chat, we admire the nice weather and we go for a French lunch.
I meet the two founders of the other startup and pick their brains. They are head down in integrating their product into the Datadog ecosystem and hard at work on some cool new features they want to announce in a couple of months.
The founders share their experience of them, their teams and their product being assimilated into this 50 times larger company. The work is crazy busy and the company is growing at a rapid tempo. This is really though.
However their product — their baby! — is also growing rapidly. Of course it's dressed up like a Datadog product, but I get the feeling they don't really care. Their product is now reaching so many more customers than they could have ever reached. It's taking of and it's exhilarating
I meet the CTO and we talk about tech, Paris and the challenges he faces as the engineering department grows like crazy. I note that having a one on one with the CTO is a good sign.
I fly back home with a good feeling. Nice people. This might work. No hard agreements are made on follow up.
Takeaways
- Get an NDA when diving deep. It helps smooth over any blockades on both sides.
- In an acquihire, you or your team are the thing on the table.
- Talking to C-level means this is not a fluke.
Do I really want this?
So why did I want to be acquihired by Datadog? I just pulled Checkly out of private beta and I already want to jump ship? Really?
The 100%, swear-on-my-grave-truth is I actually thought of Datadog as a potential exit for Checkly somewhere down the line. I never wrote this down, but it is fairly obvious that larger players in the monitoring world acquire smaller players. And Datadog did not have Synthetics product at that stage...
Another part of the answer is that I am not a hardcore bootstrapping-before-everything fundamentalist. Bootstrapping is hard. In an established tech space like monitoring it is even harder.
So in two bullet points, why did I pursue this acquihire possibility?
- If a bunch of people come along and offer you a great deal to join them and work on your product with the benefit of a huge existing customer base and huge pile of cash in the bank (or their VC's bank) it is something I am open to consider.
- What doesn't happen now, might happen later. Or any contacts made or network built will always benefit you in some way in the future.
Towards closing
I flew to Paris again for more sessions with the engineering team. I flew to New York to attend Datadog's Dash conference and meet with the CEO, CPO and more product managers.
All of these talks were great. The people were great. I can honestly not find anything to complain about here. It was clear Datadog was hard pressed to find people like me and I was more and more seeing myself as part of their team.
The only thing that nagged me was the lack of concrete offers. I pushed for it at the close of every day of talks. As mentioned, I'm pretty sure they were talking to more people so this can be a reason to stall any actual contracts / term sheets being discussed.
As a bootstrapper, you have only one really valuable asset: time. Paradoxically, large organizations have more people to do stuff but are also much slower. This creates friction where any week or month delay in planning creates chaos and insecurity with the bootstrapper but is hardly noticed by the larger player.
So, in the meantime I kept plugging away at Checkly as if nothing was happening. I was answering customer requests and helping with onboarding from the Datadog HQ in between meetings.I'll repeat this again. You have to keep working as if this interested player has never appeared on your doorstep.
Takeaways
- Keep plugging away as if nothing is going on.
- Make things as concrete as you can as you progress.
- You'll learn a ton even when the deal falls through. Might as well enjoy the ride.
No deal
Prior to my second time flying out to Paris, Datadog made clear that I would have to move to Paris if we came to an agreement. This is was a fairly big issue for me. I love spaghetti, but I already moved to Berlin some years ago and I look forward to moving back my native Netherlands somewhere in the near future.
However, everything is negotiable up to a degree. People change their minds. I'm pretty flexible and so is my partner. So, we discussed partly remote working, or other forms of onsite/offsite combinations. I just had a really hard time seeing myself living and working in Paris.
In the end, I don't know 100% sure if this was the reason for me and Checkly not joining Datadog, but this was what they said. And I completely understand. Even better now 8 months later.
When creating and pushing a new product towards launch you have to be there. Day in, day out. You need to breath the product and develop excellent relations with all involved coworkers. Remote is a thing for more and more people, but for me it's not ideal. I enjoy the office, the city, the people. I would actually not hire myself as partly remote manager for this new product. Enough said.
Takeaways
- Nothing is done until it's done, in writing, signed, money in the bank, you and your partner moved into the new house.
1) If any of the people from Datadog I met during these months read this, first of all "Hi!". Second, thanks for the interesting and great learning experience!
2) If you came here looking for top secret notes, contracts and pricing details than you'll be disappointed. See the section on NDA's.
banner image: detail from "Willow at the Ferry Station in Yoshino River", Hasui Kawase, 1883-1957, Japan. Source