Post Acquisition Stress Disorder
I had a weird moment yesterday. I was updating my blog and I read my last post where I enthusiastically (albeit quite delayed) wrote about starting my new company Retsly.
Little did I know that 2 months after that post was published, we would be acquired by arguably the most successful company in North American real estate. We were 10 months old.
Being acquired has been a huge learning experience for me. I want to be absolutely clear that I am extremely grateful for the opportunity that we have been given by our acquiring leadership team. I’m onboard 110% and I have managed to adjust, but I don’t want to pretend like it wasn’t hard for me get there. It was really hard.
Reading that post made me think about my mindset pre-acquisition, during the acquisition and post-acquisition so I decided to write about something I am calling Post Acquisition Stress Disorder.
General James Stockdale once said…
This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.
I should probably put this in context in case you aren’t familiar with his story. General Stockdale was a fighter pilot for the US in the Vietnam war. On September 9, 1965, he ejected from his Douglas A-4E Skyhawk over North Vietnam. He parachuted into a small village where he was beaten and taken prisoner. He was a prisoner of war for the next 7 years.
I think it is important to critically analyze all outcomes, not just failures but also the wins. In any situation, you can gain a lot by inverting your perspective. Obviously being acquired is nothing like being in a POW camp for 7 years, but what can be assimilated to Stockdale’s quote is the mindset that a POW must be able to adopt in order to succeed at any cost to make it out alive.
This never give up attitude is absolutely critical in start up founders. This quote completely encompasses how I felt about my pre-acquisition mindset. Stay alive, keep moving. I think every founder should adopt this mind set. That said however, this type of ruthless focus can make for a really stressful adjustment period when all the sudden the doors open and you are released from ramen purgatory.
I want to be crystal clear, being acquired was the best thing that happened to Retsly. It came at the perfect time and I know in the end it will be the pivotal decision that not only led to Retsly having a huge impact for online real estate, but also allowed me to solidify my future as an entrepreneur.
That said, being acquired wasn’t all sunshine and rainbows.
For the ~2 months during the acquisition phase everything was great. It was such a high to be on the cusp of achieving something you worked so hard for. We had a few small celebrations and everyone was really excited. Looking back this was probably the most exciting and fun time of all. We should have celebrated it more and took more pictures. I will always remember cracking champagne on the roof of our rail town office. I’m glad I will always have that photo of the founding team.
The first months post-acquisition were much different. It was really hard for me. All the sudden, it wasn’t my business anymore. I used to feel like I had the final say on just about everything, now things were changing and happening without me even realizing it. During this period, our business shifted from being all about the product to being all about administrative tasks like paying out shareholders and integrating with new processes. My mind constantly raced about what our future would hold. Are they going to live up to their promises? Am I? Why aren’t things getting done as fast as they used to? Who do I contact to solve issue X? Are we going to be able to integrate into their culture?
My co-founder says I have unrealistic expectations, he’s right. I also constantly anticipate things that are out of my control when I should just be living in the moment. I found myself putting so much pressure on myself during this period that every little issue began to snowball and before I knew it, for the first time in 10 years, I started having really intense panic attacks randomly throughout the day. All of this stress almost put me off the rails. I felt completely isolated and started to feel like I could not cope with my stress. After almost a year of complete ownership over my destiny, it was so very scary to think about the lack of control I had that I genuinely felt like I might be better off just moving on to the next thing.
Luckily I got some great advice from people I respect, and also had a really supportive co-founder who could shoulder most of the administrative burden during this time. If it wasn’t for that and my wife’s support I would have ended up doing something I regretted.
In retrospect, I realize now that what I was feeling post-acquisition, could be closely related, on a much lesser scale, to how a soldier suffers from PTSD. I had just spent 10 sleepless months running into walls trying to find a way to survive. All along the way I was dodging the scatter bones of dead startups, some of which were my friends and mentors.
Am I being dramatic? In the real world, yes, yes I am. I’m also doing something I hate to do by romanticizing the bad parts of start up culture. Why do it then? To be honest, it’s really the only explanation I found that helped me rationalize what I was going through. This humble assimilation allowed me to understand and cope with what I am going through.
If you think about it, maybe that is what the General was saying in the first place…
My advice for start ups who going through an acquisition process are…
Get the culture right
This isn’t much different from what they say about building your team and it’s just as critical. You need to be 100% sure that you are aligning your goals with the people you will now report to. You need to make sure you believe in their goals, that they believe in yours and above all else you need to truly believe that they will make you better and together you will win. If you have to shop it around to get a bit of perspective on this, do so. You’ll benefit greatly if you get this right.
Sometimes things take time. You have to be patient. My co-founder taught me this. I subscribe to WIN. Want it now, but sometimes you need to be patient and let things come in their own time. Whether it is a term sheet, a potential recruit, unkept promises, or even a shift in mindset. When you force these things you are creating more stress and friction for yourself.
It’s not your business anymore. The buck doesn’t stop with you, maybe it never did. If you got the culture right, you don’t have to worry about catching every little thing that may fall through the cracks. You decided to work with these people for a reason. Trust them that they can get the job done. Once you get the culture right, you need to let go a little and just focus on being a good leader for your team.
Take a vacation
Chances are you haven’t had one in a while and it’s probably a major reason you are so on edge about everything. If you take a vacation, it will do a lot to get your head right so that when you come back you can begin the adjustment.
Earn out before you burn out
If you keep operating like you did pre-acquisition, you are going to burn out before you earn out. Get familiar with the rest of the company, find ways to connect with people internally so when you need help you can find it. It does your leadership team no favours if you burn yourself out. Pace yourself.
Think about this… a startup looks to maximize value over a short term. A corporate company looks to maximize even more value over a longer term.
Figure out how to adjust your mindset for this. If you go into a large company with the same ruthless, no-sleep, approach that worked for your startup, you are going to have a hard time adjusting, just as I did.
Think about new ideas
Something I found what really helped me get past my issues with losing control over the business was to think about what my next idea might be. I decided fairly quickly that I wasn’t actually going to execute on anything but I did spend a lot of time ideating. Hackathons are a great way to get inspired, and when you are inspired, you will feel relief and realize that regardless of how the next few years go, you always have options.
Talk to your co-founder
I never expressed to him the full story as I’ve written here but he probably knew. Eventually I realized I needed to talk to him more about the little things that were bothering me and focus on developing our relationship, because when it comes down to it, we have to have each others backs now more then ever.
When I did this, things got a lot better. Not talking about little issues creates resentment to the point where you cannot be an effective team and that is how the snowball is made. Avoid the snowball at all costs.
Building a start up is hard. Selling your startup is also hard. Neither are as hard as being a POW in North Vietnam for 7 years, but if you find yourself building mental prisons, always remember what James Stockdale said.