A story about saying no to Facebook

and losing over $60,000,000

As I was wrapping up work at 5:52pm on October 10, 2010, I got an email FWD from my partner Jonathan.

When I read the words “Facebook” and “acquisition offer” my heart skipped a beat. I immediately called Jonathan because I thought for sure it was fake Nope. It was real. They wanted to meet us. Holy crap.

Within 1 week we were on a plane to visit Facebook HQ. The night before we were up till 2am putting the final touches on our product demo for their product team, which included Adam Mosseri, who now runs Instagram. No pressure.


The presentation

When we arrived at the office, we were escorted to a large conference room where we could set up for our presentation.

As the Facebook team trickled in, I kept rehearsing the presentation in my head. “Jack …remember buddy, focus on them, focus on how our expertise can help them achieve their goals. Don’t tell them, show them. You’ve got one freakin shot at this.”

The next 45 minutes were a blur, but in the end the presentation did the job. They were excited and that’s all I wanted. I was exhausted and relieved.

What I didn’t realize is we weren’t even a quarter of the way through the process. Good thing they had a free snack bar with all the beef jerky and all the caffeine you could handle. It was like going into a 7 Eleven, but everything’s free.


Back to back meetings

We were then separated into small conferences rooms alone, and for the next FIVE hours, we had 10 back to back 30 min interviews, with a few minutes in between to hit the bathroom.

If you ever find yourself in this position, here’s a tip I learned to help make these interviews fun and stress-free. If you know ahead of time who you’re going to be meeting with, research them ahead of time, and find 2-3 things you can ask them about right away. When Kate, the Design Director for all of Facebook walked in, I immediately asked her about Pittsburgh, since we both grew up in PA. We talked about the Steelers, PA weather, PA food, and before you knew it, the interview was almost over and we had barely even spoken about design. It didn’t matter, the goal was to get to know each other and find out if working together would be a good fit.

When they walk in, focus on them, ask them questions, find out what challenges they have in their department. And when it’s your turn to speak, tailor everything towards what they told you they were looking for. There’s a reason you’re in this meeting. Find out why as soon as possible and then show them how your skillset will solve their problem.


The offer

After the meetings were over, we flew home and waited for the call.

A week later we were offered a very generous acquisition deal that was pre-IPO at a share price of $25. The stock price today is $277, an 11x increase.

And yet we said no.

JACK, WHY ON EARTH WOULD YOU TURN THAT DOWN?

A few factors went into this terrible decision:

  • Facebook was going through a rough patch at the time with their product

  • We didn’t want to work for the man and valued our independence

  • We were naive and thought our company was worth 2x more

Had we said yes, this deal would have been well north of $60,000,000.

🤦‍♂️


The lesson

The acquisition process is nowhere near how it’s presented in the press. I used to think you’d get an email, you’d say heck yea, and they’d mail a check and you could buy your Lamborghini the next day.

The reality is, it’s a sales process. You are selling them and they are selling you. When you give presentations, focus on your tech and how it can help them with their tech. When you are in individual meetings, do your research on all the team members and ask relevant questions that give you the reasons why you’re there.

And if you get a generous offer, take it!

Hopefully you can learn from my mistakes :)

Jack

ps, I also did a tweet thread with some more more insight into the process.


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