Entrepreneurs get absorbed into big companies every day when their startups are acquired. When they eventually leave, as so many do, the smart ones exit gracefully.
You can put Tobias Peggs in that camp. Peggs is the former CEO of OneRiot, a young startup that developed a social targeting service for mobile ads within apps and that sold to Walmart in September 2011 for undisclosed terms. Fast forward to today, and Peggs — who just left Walmart for a new, still-stealth project — characterizes the experience as nothing but instructive.
“I set myself two goals walking into Walmart,” says Peggs. “One was to do my job as well as I could, to deliver ROI, and two was to learn how to execute at massive scale, [which is] something I had not come across in my startup career. I hit those two goals and left happy.” Adds Peggs, “I can imagine that if you don’t set those goals, and spend the first couple of months flailing around without a purpose, you might end up unhappy and start complaining about the acquirer. Basically, I think you get out what you put in.”
It’s good advice, and Peggs has much more of it for entrepreneurs who may be amenable to selling their startups to large acquirers but don’t know what to expect after the paperwork is signed. Indeed, while Peggs says the best tip he can offer is to come with a plan and goals for the first 100 days that are “achievable and valuable and, importantly, clear,” (if you can deliver something successful inside the first 100 days, “you’re likely to be flying for the rest of your time” at the acquirer, he says), he’s produced a number of other points worth digesting. You can find them here. We’ve also reprinted them with Peggs’ permission below.
1. Develop patience. It’s a virtue. (And pushing multiple initiatives is the only way to maintain sanity.) In a startup, you can have an idea while brushing your teeth in the morning and it’s in market that afternoon. If it doesn’t work, you just roll it back – easy. It’s not like that in a Big Co, for a bunch of reasons – many very valid. In Walmart IT circles, there’s a saying that goes something like: “the ‘one in a million’ happens 15 times a day at Walmart scale”. In other words, if there’s the smallest chance that something you push is not 100% perfect, your customers are going to have issues multiple times everyday. And if they’re biggies, that could cost you millions of dollars in lost revenue – which is unacceptable. You have to take the time to get it right. So it follows that things you think should be banged out in a week can often take a month, and initiatives you think could be in market this quarter can often take a year to fully realize – especially if they touch multiple parts of various other business systems and processes. Understanding that reality, and working with it, is the key to avoid frustration. So rather than kicking off one single initiative, and possibly waiting around for a year to see it finally being used by customers, you can kick off several things and pace them in parallel. Individually, they might all be going “slower” than you’re used to in startup land, but in aggregate they’ll keep you busy and deliver a big impact when they finally pop.
2. Learn to love “Alignment.” Achieving it will become a big part of your job. In the physical retail world, it’s often said that the three most important things are location, location and location. When trying to get something done in a Big Co, the three most important things are alignment, alignment and alignment. No matter how small or isolated you think your particular initiative is, there’s a good chance that it’s going to impact someone else’s – possibly in a part of the business you’ve never even contemplated before. And it might also be true that someone else is already working on something related (or worse, working on something conflicting). Getting alignment upfront is the key to avoiding frustration with other folks downstream, and reducing the risk of someone somewhere executing expensive, redundant work. But getting that alignment in a Big Co takes patience, time, and a whole lot of repetitive, consistent communication. At OneRiot, we use to do a whole-company standup meeting every Friday morning to make sure we were all on the same page. But we only had 20 people. That doesn’t scale when you have 2 million employees like Walmart. But you still need the same level of alignment to avoid tripping yourselves up. Just prepare for that to take time, and commit to making it happen. (One technique I used was actually borrowed from my startup days: a monthly “board meeting” for my products.)
3. Understand the Mission Statement. Mission Statements are often derided for being vacuous or disconnected with what the company is actually doing for its customers in the real world. But when you’ve got a good one, it can act as THE reference point for every decision that’s made. Think about “organize the world’s information and make it universally accessible and useful”. If you are working at Google, whether you’re setting top-level strategy or committing a single line of code, if you’re doing something that helps “organize the world’s information…” then you know you’re probably doing the right thing. You can proceed quickly and with confidence. A good Mission Statement can be very powerful in a Big Co – as a means to speed up decision making while keeping everyone on the same page. At Walmart, the mission is to “save people money so they can live better”. If a new search engine could better surface the best deals for customers, let’s do it. If a new mobile app meant parents could get home-delivery of weekly groceries, saving them a couple of hours dragging two toddlers around a supermarket, then let’s do it. The mission statement wasn’t “let’s build some cool shit and throw it at the wall to see what sticks”. It was very much focused on price-conscious customer retention and loyalty, which in turn set the tone for new customer acquisition and additional growth. Understanding that – and making sure that your new ideas, initiatives and projects line up with that mission – can be key to quickly getting all the support you need to deliver something that will be met with success in the market.
4. Seek out the brilliant people in other departments, and learn from them. It’s probably true that Big Co got big because they know what they’re doing. (Maybe not in every department, but certainly in their core business.) And they know what they’re doing because the people there know their shit. Working in a Big Co is a fantastic opportunity to seek out these folks, and to learn from them. Often they will come from different worlds to the one you inhabit (e.g. Walmart is brimming with brilliant operators and merchandisers – something I wouldn’t come across while deciphering social signals all day long at OneRiot). And while it’s often interesting to talk about specific details of their job, it’s always really fascinating to hear these people’s bigger picture insights on topics like “how do you execute at massive scale?” or “what triggered the fastest growth spurt you’ve ever seen at this company?” It’s great to spot patterns and parallels in their answers that can help back in “your world”. To get the most out of this, a friend who got acquired by Cisco gave me the idea of doing “200 breakfasts” in a year. That’s practically a breakfast every workday with someone from around the organization who you could learn from. I don’t think I quite hit 200, but I definitely absorbed lessons from a great many people who’ve had fabulous and successful careers in complete different fields to mine. I feel much richer for that experience.
5. Understand, and revel in, the scale. The scale of Big Co might be a reason why things can go slow (you need lots of alignment, the one-in-million is always around the corner, etc, etc). But if you wrap your head around it, you can also leverage that scale to achieve some crazy things. Consider my tiny slice of the Walmart world… I was working on mobile initiatives for non-US markets. With a small scrappy team, we launched 5 mobile apps in 9 months for the UK, and took that market from a standing start to 50% of typical weekly global mobile revenue. We achieved that not only by building quality products, but by leveraging the organization’s massive scale to distribute our products to acquire highly active customers at staggering rates. Likewise, my colleagues in the mobile team focused on the US delivered some incredible stuff this year – including innovations like smart phone-based self-checkout and amazing user experiences to help crush Black Friday. The scale of what we achieved this year might be “normal” to many folks in Big Cos, but it was eye-poppingly enjoyable for me.
6. Realize that you’re sometimes at war with other departments, not just your competitors. In startup land, everyone is in it together. You’re busting your collective guts to make sure your company wins – end of story. In a Big Co, that might not be true all the time. A friend who was acquired by Microsoft put it well: “in a startup, you’re at war with your competitors. At Microsoft, I was often at war with other departments”. Microsoft’s woes here are well documented, but I found a flavor of that sentiment in talking to everyone who’d been acquired by a Big Co this year, whatever company they landed at. You might be at war for budget, for resource, for senior management mindshare, or because your boss wants to annex other parts of the business and build an empire. There will be politics, perhaps hostility, and certainly lots of posturing and positioning. For many startup folks, that’s completely alien. But those are the rules of the game. If you think you’re going to build a long career at Big Co, then it’s best to jump in, learn the rules and start playing. If you’re happy staying on the sidelines (“I’m keeping my head down, just doing my job”) then that’s fine – but accept that you will likely be always on the sidelines. Thankfully, I saw a few folks learn to use their political powers for good – it was heartwarming, like watching the Rebel Alliance strike back.
7. Get the highest-ranking job title you can. It impacts the speed with which you can execute. Startups tend to be mercifully free of much hierarchy. The first tech company I worked for had few role titles internally. But the founder knew that titles were important “signals” to the outside world we were doing business with. So we were given license to call ourselves whatever we needed to get the next sales meeting. I can remember being told: “if you need to be the VP of Intergalactic Importance to get the meeting, then you are now VP of Intergalactic Importance. Just get the bloody meeting!” I’ve always adopted that approach in startups – but it seems a different approach is required in Big Cos. In a Big Co, where many initiatives can be cross-department, or even cross-continent, you’ll often need to connect and communicate with folks you don’t know and who don’t know you. In that case, it helps speed up the process if you really are VP of Intergalactic Importance. That signal – your title – tends to inform other people’s speed (or even willingness) to respond. And, unlike in startup land, you can’t make it up. You and your title are “in the system” – easy to look up, and easy to be bumped down someone’s priority list if the signal isn’t strong enough. This can result in some infuriating, time-wasting behavior – for example, bringing more senior folks into a meeting, simply to ensure that the meeting takes place. But if you get the right title, you can navigate the organization fluently, and easily exert influence in all the right places to get your initiatives out the door. That title also helps information flow to you as well. For example, email distros for “VPs and above” might contain info that helps you understand what’s going on in other parts of the organisation, giving you a broader appreciation of business dynamics and where you can contribute most. If you’re not on that list, you’ll struggle to get that insight. In summary: if you are about to be acquired by a Big Co, fight for the highest title you can – walk in the door with the strongest signal that you’re here to execute and have the authority to do so.
8. Accept that certain things in your workday are going to suck, or else everything will suck. Assuming you have a decent role, on a decent project, and are generally happy with what you have to deliver day-to-day, there’s still a lot of stuff around the edges of your workday that is going to suck. You’re on a Mac using Chrome, but the timesheet system will only work on a PC with IE. Security systems make working remotely difficult. Impenetrable Travel and Expenses policies mean you just let receipts pile up on your desk unclaimed. Etc, etc, etc. The easy flow of working at your Google Apps-oriented startup could well be replaced by a bureaucratic grind supported by ancient, creaking systems. But none of that matters. At least it shouldn’t. More to the point, you’re unlikely to change it – so don’t fight it. I’ve seen many people lose much energy rallying against the system and process, to the point where they lose sight of why they’re there in the first place. It’s better to simply focus on what you’re there to deliver, and make that fun. Ignore the sideshows.
9. Don’t forget who you are. At the end of the day, that’s why you were bought. On my first day at Walmart, I was pulled aside by a very senior executive who told me: “We’re going to teach you a lot of new things while you’re here. But we’re also going to learn from you. So don’t lose your startup spirit. Just figure out how to apply it at Walmart scale.” I will always remember that. And every time I felt beaten up, or boxed in, or not listened to, or just frustrated, I went back to that day-one conversation and started charging again. Above all else, that’s really what Walmart wanted me to do.
10. Don’t drag it out to the point of diminishing returns. There will come a point when you’ve done what you set out to achieve at Big Co. That might be seeing your original startup product rolled out to market at massive scale, or it might be the delivery and acceptance of a new initiative you were driving. At that point, you’ve probably also delivered ROI on your acquisition – so everyone should be happy with what you’ve done, including you. And when you’re at that point, take a good hard look at yourself and ask: am I going to make a bigger impact next year? If the answer is no, and you’re at the point of diminishing returns, then it’s probably time to walk and find the next startup. You’re not helping anyone by moping around making half the impact you were last year. Especially yourself. Certain startup skills (that you don’t use in Big Co) might go stale – making your entrance back into startup land difficult. Or you might get “comfortable” – making your entrance back into startup life almost impossible. Of course, in many situations, deciding to stay at Big Co might have a bigger impact on your wider world (maybe you’re on a retention plan that could set your family up for life). It’s never that black and white. But it’s always worth considering…