What Acquirers Really Buy: Lessons from Superhuman's Rahul Vohra

The best acquisitions are ones where the company is buying 4 things-ish at the same time. They're buying the team, they're buying the product or the suite of products that you've built, they're buying a rapidly scaling revenue line, and they're also buying future strategic premium. The things that you have or are going to build are on their roadmap. And when all 4 of those things are true, that's when you sell companies for the high hundreds of millions or the billions or the tens of billions of dollars, right?

Hey everyone, welcome to the Founders in Arms podcast with me, Imad Akhund, co-founder of Mercury.

And I'm Raj Suri, co-founder of Lemind Tribe. And today we have with us Rahul Vora. Rahul, you're the original founder and CEO of Superhuman, and you sold to Grammarly. Now it's called Superhuman. So are you still called the founder of Superhuman?

My job title would be head of Superhuman Mail. I think I have a hilarious LinkedIn slash Twitter bio where I'm founder and CEO of Superhuman Mail, formerly known as Superhuman, acquired by Grammarly, also known as Superhuman.

Not complicated at all.

Was the plan always to change the name, or was it afterwards they were like, oh, actually, this fits our vision more?

It actually started as a joke, and then of course it was a very serious decision that probably hundreds of people obsessed over for a very long time. But initially it was a joke. I was a small angel investor in Coda, Shishir, our CEO's company, that was also acquired by Grammarly. He was a small angel in Superhuman. And so when the Coda acquisition was announced, which was about, I would say, 7 months before the Superhuman acquisition, I immediately texted him and I was like, hey, congrats, would love to jump on a call. This was like December 20th, so he was just about to leave on vacation, but he jumps on a Zoom and where he's sharing the good news and he's also sharing the vision. And I was like, well, we should have a more serious conversation because this is also our vision. We also want to build the AI-native product productivity suite of choice, and maybe we should do that together. And he said, well, I'm not even the CEO yet, so give me a few weeks. I'm CEO January 10th, and then I'll need some time. And then a few weeks later, it was like January 18th, we were at the Coda acquisition party. For those who know San Francisco, it's Press Club here in downtown or in SoMa. And Shishir was there, a bunch of people were there. And I asked him, I was like, well, now that you've— Grammarly has bought Coda and you all are going to build out this AI-native suite, what are you going to call the company? Because Grammarly doesn't really make sense anymore. And he threw out a few names. I'm not going to share what those names are, but they weren't great names. I was like, dude, these are not good names for all the following reasons. But I have the best name ever, and we've been using it for 10 years. It has incredible brand built behind it, a ton of goodwill. Most importantly, I think it can see us through the next 50 or 100 years of this company and stands for what we want to do, how we want to make people feel like they have superpowers at work. But it also keeps the human right in the middle of it, which we think is very differentiated from other AI companies today. So it started off as a little bit of a joke, and then about 4 or 5 months later, Grammarly had hired a branding and an identity agency, actually one of the best in the world. And they independently came up with a list of names. The top of that list was Superhuman, and they did not know that we were in M&A discussions. So from a variety of ways, the name was triangulated.

Wow, that's cool. It's a cool story. It is a fantastic name. The funny thing is my wife was just— my wife has become cloud-pilled quite recently and like, you know, AI-pilled very recently. And she was describing herself I guess independently, as superhuman. She was saying, this is making me superhuman. And I was like, wow, that is a great description of it. That is the right branding and description of it versus— even Trump is trying to brand this as superintelligence versus artificial intelligence and stuff. But I think superhuman is probably the right way to think about it. It's the most positive way to look at it.

Yeah, I agree. For what it's worth, I think superintelligence is probably a better word or a better phrase than artificial intelligence. for all the reasons the administration outlined. But it still doesn't talk to the humanity of it. It doesn't talk to why we're doing this or where we're going or speak to where our place in the future is. And that's just something we obsess over at this company.

Yeah, I think my last company, Presto, acquired a company called CyborgOps. And this idea of a cyborg or something with a human plus— and that's what they did. They did a human-in-the-loop like AI. So, um, and, and they were focused on that. Um, and I, and I, you know, I did— I do think it was the right way to think about, you know, when humans plus AI are together, like, you can do really amazing things. Um, and, uh, so, but people have to kind of experience that to see what you can do.

I was gonna go on a tangent a little bit. I, I find the— have you seen these clips on the internet of like, uh, Dario saying like, you know, like, please stop me from like destroying everything? Like, there's like that other vision which is like very like dystopian that AGI is going to take over everything and we have to slow the frontier and all of those. But yeah, I agree that the superhuman takeoff we're getting, we're giving humans superpowers and getting rid of tedious work that they had to do and all that kind of stuff is much better branding for sure.

Yeah, there was the SNL skit, right, this past weekend on Vidario. It was funny.

The video that went viral of the group of them standing outside and Dario is kind of put on the spot to say a thing and he's saying it earnestly. And like, I actually thought he did a pretty good job, to be honest, of conveying like, we're going to try our best. There are still risks. But it was very funny to see how every single CEO slash executive showed up so differently in that little viral video.

Yeah.

Yeah.

He has to be brave too. I mean, to be in a room with those types of people and like still say the same things, right? Like, you know, you have to— Yeah.

He doesn't have an easy job for sure.

Yeah, other people are probably telling him, you know, Jen's like, hey, don't say that, you know, and he's like, I still got to say it, I still got to say it.

He looks anxious, but he's sticking to his beliefs, which, you know, you have to respect and admire. Yeah.

So, Raul, yeah, I think that's the second company you sold, right? Or was it the third?

Yes, second. There was a really tiny one back in Cambridge, but like, that's the second real one.

Yeah, yeah. I guess give us a quick history of your kind of entrepreneurship journey and kind of the various kind of Low points and high points for you.

Oh my gosh. Well, I guess starting sort of at the beginning, I started programming when I was 8 years old. This was back in the UK where you and I are from. Roger, did you also grow up in the UK?

No, but my sisters were born there and I have a lot of family there. I go down regularly.

I thought you had a close connection there. And so there was a time in the '80s when the government was super into computing in like an almost weird way. Like, this is not true today, day. But they, through the BBC, which is weirdly our television company, sponsored a microcomputer, the BBC Microcomputer, and every school had some. So growing up, I mean, these were old computers by the time I was using them, but even so, the school had them and I was able to program them. And I went to the library and I found all of these programming books and I taught myself how to program them. And my goal was to make video games because I think like many of us, I sort of grew up as a gamer. I still am a gamer. And my motivation was to make fun games that I could play and I could give to my friends and that they could play. And so I sort of cut my teeth on the BBC Microcomputer, and then over the next 10 years taught myself BASIC and then C and then C++. And then I was making graphics engines and video engines and all kinds of things, soundboards, music software. And then I went to Cambridge, studied computer science, where, Immad, you and I overlapped, right? Were we in the same year?

I think we were actually in the same year. That was 2005.

Yeah, exactly. Yeah. So I went in 2002 and I graduated in 2005. And then I sort of had like a weird left turn. I started a PhD. And I started a PhD for exactly the wrong reasons, which is I thought it would be a great way to start a company. Which is, it's not. It turns out the best way to start a company, as we all now know, is just to go start a company. And so I eventually realized that I was a year and a half in, and I was very entrepreneurial in the PhD program. I realized I wasn't smart enough to do a PhD, but I was a good enough communicator that I could help those other people that struggled with communication to convey their ideas and to get published in the best papers. So I would go hang out with researchers, listen to what they were trying to do, and then sort of figure out what is the best way we can pitch this idea in a paper, which interestingly enough is basically the same exercise you go through when you're raising funding. So I was having sort of this fundraising practice, but doing it with computer graphics ideas and graphics journals. And then eventually, I worked my way into the part— I dropped out and I worked my way into the part of the university that helps staff and students create companies, which is Cambridge University Entrepreneurs. And I became the president of that organization. It's a student-run volunteer organization. And like all such organizations, it had kind of been run into the ground by its predecessors, had had a storied, illustrious past, had completely run out of money. And we ran entirely on grants. And so I would have to go to VCs and angels and tech companies and say, Hey, give me money so I can give it to students who want to start companies. And you might think that sounds easy because there are lots of great companies that come out of the University of Cambridge, except that there was no equity involved. This was literally grant money. They were granting it to me and I was granting it to these teams. So it was also, in retrospect, amazing training for how you raise funding because the hardest funding to raise is when you're selling nothing but good vibes in return. And that's all this was, was good vibes. And so I did that, and through that, I met a lot of the early-stage investor and VC community around Cambridge, which, as you know, Imad, is not particularly large. There's like 5 angels that matter, 1 or 2—

Especially in like 2006, it was like nonexistent.

Like, I can literally name all 5 people. Yeah, maybe 10 people in total that mattered. But anyway, I met them all, and it was helpful and useful. And I was like surrounding myself with like-minded people like yourself, like our good friend Jude Gomia, who's also from Cambridge.

Do you guys know each other?

You know, he turned up to a few of these meetings. I always felt like he was a little bit more on the engineering side of things as opposed to the computer science side of things. But yeah, I knew him.

Well, that's Jude and Rahul. But I knew of Rahul. I don't think we— I'd left the UK pretty quickly. So when did you leave the UK?

Oh, sorry. I thought you were asking about Jude. I left I left quite a bit later. So once I once I finished running Cambridge University Entrepreneurs, this is sort of to your previous question some of the low points. I just I started trying to start companies, but I didn't do a particularly good job of it. And you know the first set.

But what year was this?

So I graduated 2005. I started Cambridge University Entrepreneurs 05. No no sorry. Started the PhD 05 06. Dropped out 07 08. Then started Cambridge University Entrepreneurs. Did that for a year or two. So around 2009-ish, I started trying to build companies.

Yeah. In 2010, we were in the same YC batch. And so, I'm sure you were in the US then.

Yeah. I moved to the US Q1 or Q2 of 2010. Yeah, the first line of code I remember was January 10th, 2010 for Reportive.

Reportive, yeah. And this was a really cool company, which you had the bios, right, in the email?

Yeah, for those who don't remember, which is probably no one, 'cause it's— we're talking ancient history at this point, but we were the first—

I mean, Raj and I are the few people that remember, probably.

Well, welcome to the old person's podcast. We talk about old companies that we started before. We were the first Gmail extension to scale to millions of users. And the way that this worked is on the right-hand side of Gmail, we showed you what people looked like, where they worked, their recent tweets, their job titles, links to their social networks. And honestly, I just built it for me. I built it for me because when I was raising funding Cambridge University entrepreneurs, I realized I was not good at raising funding. Like, I did not remember people's names, how many kids they had, where they went to school. I would even forget people I'd met the day before. And I was just like thinking, I can't be the only person who's bad at this stuff and needs to be good at this stuff. What would make my life easy? And especially back then, all of this work was happening over email, mostly still true today. And so I just thought, Wouldn't it be amazing if you could see everything you ever needed to know about someone right inside your email? So even if you got a cold email from someone who's important, you could tell they were important. Or an email that looked cold, and actually you see the picture and you realize, oh, I met this person yesterday, that's why they're following up with me. Or you're trying to reach out to someone cold, and you see that— you see something in a recent social post that they have put out that you can relate to. in some way break the ice. So this, again, I built it for me and another friend of ours, I don't know if you remember Peter Clark, who was sort of in the Cambridge scene at the time, or I suppose you'd left already. He— I had applied to Y Combinator and the thing that was— one of the things you have to do, of course, is to have a link to your demo. And they say, don't password protect it because we just want to kind of play with it. And this was true back then. And so I had an unprotected link to the demo. We had 10 users at the time. And then my buddy did something that at the time I was mad about, but in retrospect, this was the best thing he could ever have done. He just decided it was an incredible product and I was sitting on it for no particularly good reason. And so he tipped off The Next Web, which at the time was a large media property, kind of like Mashable and TechCrunch and so on. And The Next Web wrote it up and they gave it a glowing review. And then All of the other tech publications gave it glowing reviews. And then overnight we had 10,000 users. And then we were still waiting to hear back from YC. And it felt like every angel and every VC fund immediately contacted me overnight. And I'd gone from—

Why did you not wanna publish it? You thought it would break or it wasn't done or?

Well, it wasn't particularly polished. It didn't do very much. It was literally, you talk about thin wrappers, it was literally just a thin wrapper against another company, Rapleaf. So there was this company Rapleaf founded by Oren Hoffman, well-known entrepreneur here in the Valley. And they were scraping data. Not, by the way, the social networks hated them, but they were scraping Twitter and LinkedIn and Facebook and turning it into an API where you could give them an email address and they would give you the JSON blob that is that person. And they would do all the hard work to clean it up. And all I was really doing, and I built this in like 4 weeks, was taking that and putting it inside of Gmail. Now, today that seems super easy, but by the way, at the time, it seemed super crazy. Like the idea that you would build a browser extension to create this, you know, 10, 20 megabyte app that would manipulate the DOM and sort of tie it into events that were happening inside of somebody else's app, which could, by the way, change all the time and would change every day or every week. It all sounded crazy back then. Nowadays, it seems like an obvious way to build a business. And there have been multiple examples of billion-dollar browser extension businesses. I happen to be sitting in the offices of one of them, Grammarly, of course.

Yeah.

But there's Honey and a few others. So that, yeah, I was just scared to release it, but it turned out to be the best possible decision because it was ready actually. And in terms of scalability, we were on Heroku, so I could just dial up the number of servers very easily. And suddenly everyone was reaching out to me and like, I could have raised money well before we got to YC. So I emailed, who did I email? I emailed Harj because the Oxford-Cambridge connection, I knew him. He was coming up through Oxford University Entrepreneurs when I was doing Cambridge University Entrepreneurs. And I was like, yo, this is what's happening. I still want to do YC, but I could go raise funding right now. And so we did one of those very rare early interviews. And I think it was just PG, and it was a video call like this, except he was standing up and obviously he was wearing his shorts and he was just kind of walking around. So we were kind of talking to his midriff and his shorts, but he was asking great questions. And yeah, and it lasted like half an hour. And we did well and we got in. He did say afterwards that we were taking on a big risk because most people who do the early interview actually reduce their odds and it increases your chances of failure. But it worked out well for us.

Great. Great. I mean, it sounds like you went from these low points, right? You mentioned earlier in Cambridge and You got— you had a hit, um, in 2010 that kind of launched your entrepreneurial career.

How many, how many ideas did you explore before you kind of hit on Rapportive?

I want to say 2, 3, 4 ideas. In terms of time, I probably spent a year to 2 years just kind of wandering the wilderness, or the idea maze as people say.

Did you think at that time that you'd spend the next 16 years working on browser extensions and email? You know?

Oh my God, absolutely.

Your whole career, right?

I mean, like browser extensions, especially not. That just happened to be a good example of be early to the platform. You know, folks who are listening to this today, go build a ChatGPT plugin. If you have an app and you haven't made an MCP, what are you doing? Like, a significant chunk of our new Superhuman male users are coming from those platforms. So like, just be early to any platform. So that was surprising. The email thing is a little bit less surprising. Because I was really, really scarred by my time running Cambridge University Entrepreneurs. This was before Slack. This was before Gmail, or it was kind of around Gmail. I took over the organization in the year that Gmail launched, roughly, or the year after Gmail launched. So I was still kind of a hardcore Windows user. I mean, I believed in the Microsoft ecosystem. I was using Outlook, which is fine for casual use, but running this organization, I was in Outlook for 12 to 14 hours a day, and I hated it. I hated it so much. I can't describe how much I hated it. It was just so painful trying to get people to do— get students to do stuff. You know, you're not paying them to do these things, and they're only doing it to, like, get a badge on their resume. And I'm the only one getting paid in this organization because I'm the only person doing it full-time. And you're kind of trying to run this organization. Over email through Outlook, it was scarring. And so I felt the pain so intensely. And then again, when I was the founder and CEO of Reportive, running that company through email, doing all the fundraisers, going through the acquisition with LinkedIn, again, all over email, except that time with Gmail, that it's actually not surprising there was this through line of, look, this is really, really hard. And also it's a massive problem. It's one of the biggest problems in the world. Like there's a billion professionals in the world, and on average, we still spend 3 hours a day reading and writing email. So that's 3 billion hours every single day, or north of a trillion hours that go over a year that go into reading and writing email. And before Superhuman, it was just one-size-fits-all solutions like Gmail or Outlook. It didn't matter how much email you sent or received. It was just assumed that you would use the same product as everybody else. So it does make sense in retrospect, but it is also kind of surprising.

Um, so yeah, you and I did the same YC batch back then in YC Summertime. I have my own PG, like, um, uh, interview story. I came to his house, but I did get into, into the YC ecosystem through Harj as well, by the way. So shout out to Harj. Um, yeah, he, he convinced me to do it. I was actually skeptical, uh, but he was like, yeah, you should come chat with us.

Um, and you know, you were in summer 2010? I don't recall you being in that batch.

I was there. Yeah, yeah. But I, I was like not there very often because I was still going between back and forth between Boston. So we, we kind of did a different thing. Like, you know, we, we were invited into the batch sort of, right? And like, we never go through the normal YC kind of application process. We were a little bit further along. We were about a year and a bit into it. So we were kind of, um, we already had, uh, some enterprise pilots up and running. And we came for Demo Day basically. So, uh, I actually remember your Demo Day talk really well. You did a great job, you know, and you were very eloquent. We also were there. We had chef's hats on. You might remember we knew each other back then, actually.

You had that company, is that right?

No, no, no, it was a tablet for the restaurant tables. It was completely different. Yeah, yeah, yeah, yeah, yeah. We had, we had, yeah, we had, uh, 2 or 3 guys at demo day with chef's hats on. Um, and, um, yeah, so, but you guys were one of the top companies. I remember coming out of the batch And you raised money then, and then you later had an exit, right? Pretty soon.

We did. We did the weird thing, and I don't know why I did this. I guess it was just a good example of when lunch is served, you eat. But we actually raised our entire money before Demo Day. So for us, Demo Day, my Demo Day pitch was, we're not raising money, but if you'd like to get to know us, then here we are, and here's what we're doing. Which turned out to be really valuable, by the way. Emily Choi, who was, um, who's very well known now for running Coinbase, but at the time was running corp dev for LinkedIn. And she was there. And of all the people in the room, that was the most important connection. She came up to me and was like, hey, would you like to meet the head of product for LinkedIn? We really love what you're doing. We think it's great. And I was like, okay. I was always a little bit scared of that because, you know, you have these platform dependencies, and I knew that they hated the fact that Wrapleaf was doing what Wrapleaf did, and we were really popularizing what Wrapleaf did in a very consumer-focused kind of way. So there was always kind of attention to those conversations. But I went in to see LinkedIn a few months later, and this was a very high-stakes negotiation because they were basically trying to kill Wrapleaf. They were trying to end that business because As you would expect, Rapleaf was literally scraping the data and then selling it and not giving LinkedIn any money. And LinkedIn has a few business models, one of which is to sell access to the extremities of the network. And so, it kind of directly competed with LinkedIn. And so, I was in this conversation with Adam Nash, another well-known entrepreneur, product guy in the Valley. And he's super sweet, super nice. I was pitching him what we were doing and why we were doing it. And he was like, this is amazing, we want to support you. Just the small problem of the API. And we ended up coming to agreement where we would stop using Rapleaf, but only if LinkedIn would promise for a very long time to give us access to the Find by Email API. So this is a secret API. I think only 20 companies ever have had it. And you could give LinkedIn an email address and they would give you the entire LinkedIn profile back as as seen by that person. So if you were connected on LinkedIn, you would see the whole thing. If you were less connected, you would see less, which is an incredible API if you think about it. Think of all the businesses you could build with that. And again, they only ever gave it to 20 people. And we had so many copycats, so many people who tried to compete with us, but no one else ever got access to that API.

Did you have to pay for the API?

No, no, we didn't.

Wow, that's generous. This is just so they could hit Wrapleaf.

Exactly. So this is my point about, I was glad I spotted the stakes. The thing they wanted was to kill Wrapleaf. We were a tool in that. And also, it turned out to be good for their brand because, you know, you had this beloved cult product with— at the time, I didn't know this, but we'd amassed most of LinkedIn's daily active users onto this platform. I would've sold for a lot more money if I actually knew that. So they were able to kill multiple birds with one stone, sort of make their daily active users happy, support this growing product.

But you got this deal done before the acquisition? This is like kind of an introduction between the companies.

Oh yeah, this was shortly after Demo Day. And then for the next—

This is often like a piece of advice that people give that like, hey, don't chase an acquisition, chase a partnership first. So it's kind of like at least played out well for you.

Yeah, 100%. This is textbook acquisition. So we do Demo Day, a month or so later we have a BD deal with LinkedIn. Like a year and a bit later, we'd sold the company. So from first line of code to acquisition, it was 20 months.

People nowadays like saying like they're not doing companies to make money or to sell, but I feel like this wasn't the case back then. At least when I did my first few YC companies, I was like, I definitely wanna sell and make some money. Did you, like, how did you kind of think about the acquisition? Like, did you, is that, was that kind of the thing that you were chasing like from your first conversation with LinkedIn or like not really?

You know, it wasn't in the back of my mind in the conversations with LinkedIn, but it was sort of buried in the deep recesses of my mind as one of the motivations for being an entrepreneur. I had this— maybe you had a similar moment in your life, but I remember this is a story back from Cambridge. I was 21, so I just graduated. This would have been '05, '06. And I was with the girl I was dating at the time. She was studying medicine, and she was a few years younger, so she was still in her undergrad program. And we were just hanging out in her dorm room, sitting on her bed, talking about like life and what we wanted to do. And she was telling me about how she wants to do XYZ, become a management consultant, this, that, the other. And I was like— I said this super seriously— I said, well, I think I'm going to move to Silicon Valley, start a company, grow it, sell it, start another one, grow that to be way bigger, sell that one, and I'm just going to keep on doing that. And she kind of burst out laughing. And I was like, no, I'm entirely serious. That's exactly what I'm going to do. So I tell you this story because there was— and maybe we don't talk about this enough, but there was a part of me that was perfectly comfortable with, that's my life plan, that's my career plan. It combines all the things I love and I'm good at doing, and I'm going to go do that thing.

You know, it's funny you mentioned that. Like, I've also had this experience of people laughing at me when I tell them, you know, in college, who are like, I was going to be an entrepreneur. The reason people laugh at you is because so many people say that, right? There's a lot of people say that I want to be an entrepreneur because it sounds impressive to girls. You know, it's like, oh yeah, I'm going to start a company and like, I'm going to take agency in my life.

I mean, especially in the UK. Yeah, it's different when someone in Silicon Valley says they want to be an entrepreneur. Like, they're normally actually building something. In the UK, it's like there's a— Rahul hosted/went to a lot of events, but there's so many where you speak to people and you're just like, you speak to them 3 times in a row, you're like, you've literally not done anything in the last— you haven't built anything, you haven't launched anything. There's nothing being done here.

That is so true. Of the student entrepreneur cohort, the people who would hang around at those events and self-identify as, I want build companies, I would say the actual rate of people building companies was something like 1% or 2%. It was really low. I'm sure it's way, way higher in the universities here, but in the UK, it's sadly low.

I kind of think of entrepreneurship as a funnel. And this is one of— there's a set of advice which actually doesn't make that much sense, but makes sense for that set of people, which is when people are like, the idea doesn't matter, which As an experienced entrepreneur, the idea definitely matters, but you kind of have to tell people right at the start the idea doesn't matter just so that they actually build something. The initial bar is just like, go build something instead of worry about the idea for 2 years and not do anything.

I think this is definitely that meme with the Gaussian distribution and those 3 faces because early in your journey, I think you're absolutely right. The idea doesn't matter. What's important is getting reps in how to build, how to build a company, how to recruit co-founders, how to write code, how to distribute, all of that stuff. And then for most people in the middle of the curve, the idea does matter for all of the obvious reasons. And then I think for multiple serial founders or certain superhuman founders, I won't say the idea starts to matter less again because you have such outsized ability to— attract capital, attract people, and most importantly, navigate the idea maze quickly. You can start with a shitty idea, honestly, and if you're a good enough founder, you'll realize it a month or two in, or maybe even faster, and just navigate your way. So I think it's definitely that curve.

Yeah, I think that's exactly what I found. I mean, you can start with the wrong hypothesis, and the more experience you have, the faster you can iterate past that. Um, and it actually can be shocking to other people how fast you move past things, you know. It's like, uh, people have this sense of like, you know, uh, whiplash and stuff like, what, we just talked about that, now we're doing this? Uh, but, uh, you know, it, it's part of, you know, maturity, knowing that and not being too stuck on one thing, right? Um, and, and kind of knowing what product-market fit looks like, um, is, is actually a big advantage because—

Which I've never experienced. Both Reportive and Superhuman, they are their basically day one visions.

You never pivoted.

Never pivoted. So I don't know what that's like to pivot.

But you kind of pivoted in that you explored 4 ideas before you hit Reportive, right?

That's true.

I know that's not strictly pivot. You didn't pivot around the similar kind of idea, but you explored multiple ideas. And I think with AI, it's much easier to explore a larger maze of ideas as well.

I think Superhuman, you did pivot a little bit, or at least you moved to upmarket, right? Didn't you go to teams later, right? You started working with big—

Yeah, I separate multiplayer from upmarket/enterprise. We added our collaboration and multiplayer features, so the ability to share a conversation with people who aren't necessarily in that conversation. You can leave comments on it. Super useful. You can paste those links into Slack. We're right now building a Slack integration, so those comments will sync with Slack. You might be familiar with how that works with Linear, for example. When we built those multiplayer features, it was a step change in the business. I think those team features alone took our net dollar retention from something like On the team side, from something like 70% to 122%. So we suddenly had a compounding business and massively increased our expansion rate. Like, we went from an overall revenue line that was crumbling to a revenue line that theoretically would, left to its own devices, continue to grow. And so one thing I would have done earlier is to make it multiplayer from I mean, as early as we realistically could. I was really skeptical about building it because it was really, really hard. Like, the permissions models for who can see what and how you make this make sense to users is extremely challenging. Like, without getting into all the details of why, it was an incredibly difficult product and engineering problem that—

But wasn't your success But didn't that give you permission to build a multiplayer model? Like you had enough users that like you could expand? Like, I mean, would it work as like multiplayer upfront?

It did, but we probably could have done it a year or two earlier.

So in the case of Reportive and Superhuman, did you mostly just have one acquirer that you kind of talked to or did you run like a whole bidding process? I feel like most people don't talk about like, you know, how to do M&A well. Maybe this recent one is too recent to talk about, but, you know, Yeah, general lessons on, like, yeah, if I'm a company and I want to sell, like, what advice would you give them?

Oh my gosh, so many things. So first of all, don't leave it until the last minute, right? Don't leave it until you're running out of money. Hopefully this sounds obvious, but you have the least leverage when you're running out of money. It is still possible to do well. We sold Reportive with 2 weeks of runway left, and we still were able to sell at a premium. That is, I would not recommend that, Don't do that to anyone. I think I aged several years during that 3-month process. But yeah, don't do that, number one. Number 2, build relationships early. Get the BD deals done, meet the corp dev people. There's a whole art to meeting corp dev people, by the way. For example, be very careful what you say. And it's this balance of you don't wanna hold too much to your chest because then— And they have nothing to report back on. But you also don't want to give them the whole investor pitch because if you don't meet your goals, they're going to start measuring that and they're going to measure your say-do ratio. Or it's less that if you don't meet your goals, it's more if you like don't build what you say you're going to build or if, you know, moving slower than you said you're going to move. And so there is an art to how much you share and what you share. And what you share, should be getting them to the point where they think, this company is on our strategic roadmap. The best acquisitions are ones where the company is buying 4 things-ish at the same time. They're buying the team, they're buying the product or the suite of products that you've built, they're buying a rapidly scaling revenue line, and they're also buying future strategic premium. The things that you have or are going to build are on their roadmap. And when all 4 of those things are true, true, that's when you sell companies for the high hundreds of millions or the billions or the tens of billions of dollars, right? So that obviously wasn't true for Reportive. We were 5 people. We had made $0.14 of revenue in the entire history of the company. The reason though we had value is, like I said, we'd amassed all of LinkedIn's daily active users into one platform, and we were the perfect showcase for LinkedIn profiles inside email. Like, great. Obviously, a social network, especially LinkedIn, should own that. But that wasn't the reason why we were able to sell at a premium with just 2 weeks left. The reason why we were able to sell at a premium with just 2 weeks left was we were running a competitive process. And we were talking to Salesforce, we were talking to Facebook, we were talking to Twitter, we were talking to Google. Facebook and Google sort of quickly died, sort of like backed off. They weren't that interested. But Salesforce and Twitter were really interested. We had a compelling offer from Twitter, which we didn't take because was the product mission alignment wasn't really there. Like, for Twitter, it was— they'd gone, I think they'd gone public fairly recently and had a lot of capital to throw around, but it wasn't really clear what they wanted to do with the product. For Salesforce, the integration was obvious, right? Like, every salesperson should have something like this. And especially at the time, LinkedIn and Salesforce were at loggerheads. They were super competitive in many of the things that they were considering going into. And when the LinkedIn crew, the people who were working on the deal, got wind that Salesforce were looking at this, and I had to plant that in a very careful way, like this was during our no-shop period, so like my hands were tied, but like it doesn't mean other people's hands weren't tied. And so there are ways to kind of let people know that that, you know, if you let the Snow Shop expire, then there's going to be another acquirer. Okay, I realize that I'm not— I'm sort of skipping steps in the journey. Let me rewind. Let me rewind one step. I did a thing in this acquisition, which is a risky move, and it turned out all fine at the end of the day. But here is the risky move. I insisted that LinkedIn sign the term sheet before any kind of diligence. Now, sometimes you do it the other way around. In fact, the smaller the deal, the more likely it is to be the other way around because the larger company has all the leverage and they're running, they're kind of running the process, right? They're like, no, we're gonna meet all 5 of you before, as diligence, before we sign any term sheet because you are the deal, right? I was like, no, you don't get to do that. This isn't just an acquihire, you're also buying the product. And actually, the product's the most important thing, especially what we're going to build. So, We're also talking to a whole bunch of other companies, term sheet, and then diligence. And then they— we signed the term sheet, and it's a great offer. And then they do interviews, and then they do what almost any acquirer does. At the time, I took it personally. I don't take it personally anymore because now I realize how the incentives are structured and what these teams often do. And they took issue with 2 of the people on our team, and they were like, these 2 people aren't as good as you said they were. And I was like, And I was like, no, you're wrong. They're better than what I said they are, and they're better than how you measured them. And we just had this massive disagreement. And they came back and they reduced the offer after a signed term sheet. They were like, we need to reduce the offer. And I was like, are you fucking kidding me? Because it had fallen below the threshold where we were interested to do it. It was a very difficult situation. And this is why I left the clock running and I just let the no-shop run out. And like, I think many founders would have just crumbled during that period.

Wait, how long was the snowshop?

45 days, I think.

Okay, but you only had 2 weeks. So like, how did you, like, how did you have the confidence?

So 45 days, and then there was like 2 weeks after that before cash zero.

Okay. Well, still, like—

So it was basically a game of chicken. It was like, okay, who believes in themselves more? Me, that I can find another acquirer slash raise money, or you that you really want to buy this business. And I think they thought I would crumble. But I just took off a few days, I touched grass, I spent some time in nature. I realized, like, I've got this. Like, I absolutely have this. Even if there's 2 weeks left on the clock, I will find a way to make this work. And in those last conversations, and part of it was sort of lining up other acquirers to start conversations To resume conversations as soon as the no-shop had expired. Part of it was pinging a few of our biggest investors saying, if necessary, will you bridge us? It makes more sense to reinvest in us like a well-known business rather than something starting from scratch, which gave me the confidence in those last few conversations to LinkedIn to basically say, I'm sorry, it's the original deal or it's no deal. So that's how we were able to do that with just 2 weeks of runway left on the clock.

That's amazing. Great story.

We had a much worse experience where we— our deal was reneged and we renegotiated. It was a mess. But I like your strategy to try to like line up other people. It is tricky though because you can't talk to them. So you have to kind of line them up really in the background and like have the confidence.

Which is why you should do all of this well in advance. Some more advice, by the way. So I hired a banker in each case. In the report of case, it was an individual boutique practitioner, Brian Flynn. He's incredible. I'm happy to introduce him to anyone who wants to chat to him. And he coached me on what to say all the way throughout this process. And also when things are really hard, it's helpful to have a professional who has seen hundreds of deals. And he would give me the percentage of likelihood completion all the way. He was like, Great, you have a term sheet. That means you're 50% likely to close. Great, you have a signed term sheet. Even now, you're only 60-65% likely to close. Great, you have a draft of the definitive. Guess what? This is only 80-85% likely to close. Not until this is signed are you closed. And even then, there are some things that can go wrong. And so he would teach me what to say and sort of calibrate me in how likely things were along the way.

Is there some negotiation feedback he gave that, like, Kind of has stuck with you?

Oh, so much. Yeah. Well, one that— this is less relevant for selling. This is relevant for every negotiation, in particular for vendors. Like, how do you minimize your lawyer fee? How do you minimize your banker's fee? Frankly, any fee. It's never this deal. It's always the future business you're going to do with that person. So go to your lawyers and say, this is an This isn't the last company I'm ever going to do. I probably have 2 or 3 more companies in me. I need you to cut me your best deal right now because cash is so important to us and it makes such a big difference. And I promise you, I will come back. I will not only refer all my friends, but I will build my next company with you and the company after that. And it turns out that that pattern is incredibly powerful and works in almost every negotiation. This is an iterated game, most of it.

One advice I got from our banker, which I think is really useful, is he was like, if you don't like the deal, reject it. Like on the call straight away. Don't don't make it seem like you're thinking about it, whatever. And then it also makes it so like it's not in your code to come up with like a counter negotiation. You're just like, "Hey, can't do this. Sorry." And then you just like basically make it so obvious that you're rejecting it. I find it actually like quite useful in a few different places where you just like don't make it a negotiation. You just like go, "Okay, this is so out of the ballpark." Assuming it is like actually that out of the ballpark, like you just make an upfront kind of rejection. And I I found it like.

Did he give you any kind of rule of thumb for how close you should be? My guy did. He was like, you might be able to swing a deal 50%, meaning if it's $100 million, you might be able to get to $150 million.

Yeah, it's hard to swing something more than 50%. It's hard to go 3x if you start very far.

Exactly. Even 2x, I think, is challenging.

Yeah, unless you get some serious FOMO or something else, some external factor going for you.

Exactly.

So you were saying, so you used another banker for Superhuman?

Superhuman, super different, right? Like 120 going on 130 people, rapidly growing revenue line. We had grown twice as fast in 2023 compared to 2022. We were accelerating again in 2024. 2024 was also this period where I'm not sure why exactly this happened, but all the productivity and collaboration companies kind of looked down their product portfolio and realized they had a massive email-shaped hole. So I suddenly got a bunch of inbound saying, hey, Superhuman is awesome. This is the best product in the category. Would you be interested in selling? And when that happens all around the same time, you should take notice. Like, this is very important. It doesn't happen very often. So the stars were aligning. And at the board, we decided to take it seriously. So we hired this incredible set of M&A advisors, Axim Partners. They're all ex-Catalyst. Catalyst, one of the best, most successful, and largest firms, except they wanted to do the Catalyst playbook, but for mid-market. So Catalyst is not going to sell your company unless you're many billions of dollars. If you're mid-market, then you want to work with a different firm, and Axim, I believe, have built— the best firm in that space, and especially for AI companies. So we worked with them. We probably spoke with about 16-ish companies, all the companies that you might guess. Most of the connections came from me or from the board or from our VCs. Axim were able to fill in with a few. And I say that because people sometimes ask, like, you know, what's the value of a banker? Are they introducing you to companies? I mean, they can, Yeah. But that's not the main value. The main value is helping you figure out what to say, to whom, how to differentiate your pitch, how to— and especially how to pace the conversations. Because it's almost always the case that you started this process— hopefully it should be the case that you started this process because someone pinged you, as opposed to you needed to sell. Which means you have 1 or 2 hot people, and you have a whole bunch of cold people. So how do you slow down Slow down the hot people whilst speeding up the cold people. It's a very artful process, and bankers are excellent at managing that. And so we did that over the course of about 6 months. They're also really good at helping manage board dynamics. And if different board members have different opinions on whether or not a deal should be done or how a deal should be done, You as the founder CEO, ultimately, you're responsible, obviously, and you hold all of the fiduciary responsibilities. But if the conversations are getting challenging, then, and if they're getting heated, then your banker should be able to step in for you and have some conversations one-on-one. Then you can resume the conversations when things are a little bit calmer, and everyone can get to a great outcome.

Interesting. You know, I'll just put out a different experience. I mean, I've used used 6 or 7 different bankers going public, right? And, uh, I hated working with bankers, I have to say. I absolutely hated them.

And, uh, but going public and M&A is like kind of different, right?

Very different. It is different. Yeah. And, uh, I think there was a couple of times where I used— I was like encouraged to use bankers to raise money, um, in the 2010s, uh, by my VCs. I also hated working with them too. So maybe some of that was holdover. Yeah, but I like forming direct relationships with people. And like, um, I think there should be a broker, like an in-between broker, but it doesn't need to be a banker. It could be a board member, it could be an investor. Uh, but, but personally, I've had really bad experiences working with bankers.

I think they're very helpful in the M&A context.

I was just actually happened to be speaking to a banker yesterday, and he made a good point that like bankers make way more money in M&A than they do on IPOs or fundraising, 'cause it's like kind of like percentage of the deal kind of thing. So I do think they try harder and work better, and you get like higher quality bankers in the M&A space because of that as well. So maybe that's a factor too. I realize I have a meeting straight after this, which I have to get to. So—

We need to do a part 2 of this one, 'cause there's so much more. We haven't even talked about like—

Actually, Rahul has like amazing fundraising advice as well, which we didn't get to at all. So yeah, there's definitely—

Yeah, if you're open to it, we'll like to schedule a second one.

Yeah, let's do a part 2.

I think that's a good conversation though, because like acquisition is this like weird dark art where no one really talks about it, much less people go through it and they're normally like kind of secretive about it. So I think it's like, it's good for people to kind of hear about it. Thanks everyone for listening. Please leave us a review on whatever channel you're listening on. Makes a big difference to the algorithm and to the success of the show. And see you all next week.

Bye.