
Take the Money and Run - nkohari
http://nate.io/posts/take-the-money-and-run.html
======
exelius
Aah, so it sounds like one of the big reasons you sold was because of imposter
syndrome? I don't mean that negatively -- I feel one of the things that comes
with experience is you realize that _nobody_ knows what they are doing. This
dispels the impostor syndrome pretty quickly.

Once you think you know how a business or industry works, you develop patterns
to solve it. This can sometimes work against you because it can blind you from
the change happening as other people figure out different and possibly better
ways to do things.

But I assume you already know all of this, and that's what's coming in part 2
:)

~~~
themodelplumber
Hahaha. That is true. One of my favorite ways of getting used to this is
thinking of my biggest competitors as friends (or trying to).

I would say "keep your enemies closer" but I really don't think of them as
enemies. On the advice of my business coach I usually call my competitors to
chat every once in a while and I think we mutually realize that we're just
trying our best not to go obsolete. We also need each other's help from time
to time. And we usually don't have quite the same business interests, so this
naturally makes our businesses each appeal to a slightly different type of
client.

When a new competitor shows up, they are usually inexperienced and either
won't last long or will end up joining our club of friends. That's just how it
works.

(Small business owner)

~~~
jacques_chester
> _When a new competitor shows up, they are usually inexperienced and either
> won 't last long or will end up joining our club of friends. That's just how
> it works._

Not that I am a lawyer, but depending on your jurisdiction, you will need to
be careful about what topics you can and cannot discuss.

Antitrust and consumer protection laws can bite you if you stray into the
wrong subject.

~~~
themodelplumber
Yes, I've been aware of this since reading the Graphic Artists Guild Handbook
in 1996. The number and type of things you cannot discuss (at least where I
live) is very limited, and tend to be contingent upon (or take fruit in)
specific market conditions that simply don't apply most of the time in my
field.

------
Cthulhu_
I'm probably being petulant or don't understand American culture, but:

> To avoid spending money, we'd been subsisting on a diet consisting largely
> of soup. [...] But now, we'd gradually started to feel like we might be able
> to afford to eat at restaurants again.

No middle ground?

~~~
nikibeth
Co-founder and "soup-maker" here. Not to dwell too much on the soup point, but
it was our go-to meal for several reasons. I personally love making soup,
especially when it's cold out. I can make it reasonably balanced in terms of
meat, veggies, and carbs. It's pretty budget-friendly too because it extends
more "expensive" items like lean meats. Lastly, it's convenient to make in
between working on marketing content or answering support requests.

~~~
Lord_Zero
id love a recipe!

~~~
samstave
[http://www.reddit.com/r/slowcooking](http://www.reddit.com/r/slowcooking)

------
sg_gabriel
Hi Nate, thanks for sharing your story. I think it's interesting because my
co-founder is also my wife. And it's an interesting dynamic to say the least.
If you don't mind me asking, what are the roles that you play individually?
Just curious ;)

For myself, I'm the backend engineer and devops, while my wife does the design
and front-end engineering.

~~~
nkohari
Roughly speaking, with Zen (and now again with our new startup TaskTorch), I
was in charge of the technical side of the business, and she was in charge of
anything non-technical (finance, marketing, support, etc.)

Niki is an industrial-organizational psychologist, so her viewpoint is
completely different from mine as a software engineer. As a developer it can
be hard for me to see past the software sometimes, and Niki's perspective
helps quite a bit.

~~~
atmosx
So basically, you've build the entire app yourself, right?

What kind of lang/framework did you use?

~~~
nkohari
Zen was ASP.NET MVC, SQL Server, and a big mess of jQuery. TaskTorch is React,
Node, and RethinkDB.

~~~
AwesomeGorilla
Zen looked nicely done. How would you compare these two platforms?

~~~
nkohari
The new platform is light years ahead of the old one. Part of that is six
years difference in technology, part of it is that I have another six years of
experience, but mostly it's a difference in mindset. RethinkDB and React in
particular are fantastic.

~~~
adyus
How do you feel about Meteor.js?

------
ph0rque
> Eventually, we'd come to learn how wrong we were, how hard the road ahead of
> us would be, and that selling the company would mean the end of what we'd
> worked so hard to build. But that night was for celebrating.

So ominous... any hint as to what happened before the next blog post
installment?

~~~
BinaryIdiot
> So ominous... any hint as to what happened before the next blog post
> installment?

Looks like they started a new company called TaskTorch. Considering this
acquisition happened in 2010 and TaskTorch hasn't really launched yet I'm
going to assume they stuck around big company for a few years, hated what they
were doing to the software they loved to build and eventually quit after
taking their sticking-around bonus.

Good way to announce your new company if I do say so :)

~~~
polysaturate
Sounds like some 4 year vesting...

------
ssharp
I was a little excited to read about Akron and Sandusky on Hacker News and
then, of course, they're used for the backdrop of how "miserable" winters are
here in Ohio.

~~~
billmalarky
Well, if it looks like a duck ;-)... (Born and raised in Columbus here).

~~~
ssharp
Weather seems like a commonly-stated reason for leaving Ohio. I'm from here,
so I obviously take note of it, but I do wonder if people commonly talk about
leaving places like Boston and NYC for warmer climates. Those areas seem to
have equally miserable winter weather.

~~~
antognini
As someone who moved to Ohio from California for grad school, the big problem
I've had with the winters is just the lack of sun. [1] It's as though sometime
around the beginning of November a gigantic cloud descends on central Ohio and
doesn't lift until late April. Boston and New York get cold, but I would find
them much more tolerable just because the sun is out more often.

I had heard this complaint from the other grad students when I was visiting
here, but it's hard to understand how important the sun is for your well being
until you've lived without it for months at a time.

[1]: For reference, Cleveland, Columbus, and Cincinnati consistently rank in
the top 10 cloudiest cities in the US.
([http://www.currentresults.com/Weather-
Extremes/US/cloudiest-...](http://www.currentresults.com/Weather-
Extremes/US/cloudiest-cities.php))

~~~
a3n
BTDT. I lived in Seattle 15 years, and while I loved it, and learned to love
the rain, when I moved to Colorado I realized that sun and light and dry can
be more than pretty nice too. (There's moss growing on the roads in Seattle,
fer cryin' out loud.)

For some of us, sun and light make a huge difference. And yes, the sun does
come out in Seattle, and when it does it's especially beautiful, but in a way
that's like saying that you're hitting yourself on the head because it feels
so good when you stop. (But I still miss Seattle.)

------
Rainymood
Thank you for this article. I loved it :)

>It was January, and the weather was fucking bleak.

I was hooked from the first sentence. Please keep doing more of these.

~~~
myth_buster
I posted this above before I read yours.

    
    
      You also seem to have a knack for writing. Reading the beginning, I got the
    
        The sky above the port was the color of television, tuned to a dead channel.
    
      feel.

~~~
Animats
_" The sky above the port was the color of television, tuned to a dead
channel."_

That's so last-cen analog TV.

~~~
PhasmaFelis
It amuses me to think that millenials would interpret that line as meaning
that it was clear and sunny.

~~~
myth_buster
Much like how poetry will mean different things for different generations.
Perhaps 100 years down the line nature would mean vicious tyrannical entity.

------
sumedh
Just out of curiosity, can you share a ballpark figure about the buyout price.
5,10,20 Million?

~~~
roel_v
The article says they had 70k turnover. Take [http://www.quora.com/What-are-
typical-exit-revenue-multiples...](http://www.quora.com/What-are-typical-exit-
revenue-multiples-for-SaaS-companies-at-sub-5mm-5-10mm-10mm+) as a ballpark
estimate for a multiple. They'd have been very lucky to be paid 7 figures.

5 million is _a lot_ of money. Sometimes I feel like it's 1999 all over again
- people spouting 200k salaries and 8 digit 'acquisitions' of < 10 people
companies as 'normal'.

------
arenaninja
Man, that last paragraph was so sobering. Everything up to that point made it
seem like it was a decent deal that they could live with

~~~
thebouv
I know. Now I want to know more about this story after that last paragraph. Up
to that point I was excited for them.

------
hitekker
A very well-crafted story. Excellent and unpretentious: thank you very kindly
for writing up your experience getting acquired, OP.

------
bsenftner
Chapter 2 please.

~~~
nkohari
It's coming soon, I promise. :)

~~~
Navarr
I would very much like not to miss it, so I've subscribed via RSS....
however....

Your RSS file is completely blank! I'd fix that if I were you ;)

~~~
nkohari
Fixed! Sorry about that.

------
darklajid
Whoa, this was fun.

The story felt like a typical HN submission. I read it with interest, but
expected a 'morale' lesson at the end. Instead the story is quite straight
forward, but what threw me off is the name below the article (and - now I see
that Nate submitted this as well).

I'm a fan of Ninject, following the author on Twitter. Nate, you've got a
couple of beers waiting for you in Germany, if you ever want to remind
yourself of the bad weather in Ohio by visiting us here.

~~~
nkohari
Thanks, on all counts. :)

------
a-priori
Sounds like you made the right choice. When you're weighing certain money
versus 'we think this company will be a big deal someday if we slog it out',
it'd be silly not to cash out. As long as it's a reasonable offer, of course.

Worst case you work for a couple years at the acquirer until your golden
handcuffs run out, then start another company -- this time with money in the
bank.

------
bengali3
Team of 2 going into meetings to talk acquisition very exciting! But makes me
think the deck is stacked pretty unfairly (always is) but you might have been
able to improve your odds by hiring some M&A experience for the day.

Would you have sold to Atlassian if they had offered? If so, did they know
your company was in play?

------
kross
Cliffhanger! Looking forward to the next installment. These types of posts do
a great service to others, I read many before selling my first company. The
structure of my deal was largely based on the lessons learned from others with
which I read about in the blogs posted on HN.

------
leftnode
I loved AgileZen when it was first launched and I was a huge champion of it at
Quickoffice. Definitely helped keep us organized and on track. Thanks for the
write up and behind the scenes details - can't wait for part 2.

~~~
AwesomeGorilla
How does AgileZen compare to Trello? Looks like a very similar kanban-based
product.

~~~
nkohari
Yeah, we did kanban before it was cool. :)

~~~
woof
s/cool/popular/

Kanban was cool ~40 years ago. It might still be cool, I don't know ;)

------
kpennell
What made you not want to move to Colorado?

~~~
michael_h
If you're trying to escape the cold, Colorado is not the place to go.

~~~
myth_buster
Boulder gets around 300 days of sunshine. Also it's not wet cold and hence you
don't feel the cold much. But the sub-zero overcast days is a different story.

I got the impression that they moved to NC.

    
    
      We weren't keen on moving to Colorado, but strangely enough, 
      they had an office in Raleigh, NC, where we already had several friends. 
      It felt like serendipity.

------
abluecloud
Not directed at OP in particular, but with acquisitions that include shares,
is there something that stops you from just dumping them straight away,
essentially making it a cash only deal?

~~~
nkohari
When we were acquired, Rally was a privately-held company, so our shares were
illiquid. If the company was publicly-traded, we could have sold them, but
there are often lockup agreements in place that restrict you from selling for
a few months.

------
bontoJR
Very nice story, I have just one question: why did you guys not look for
fundings or apply to something like Y Combinator?

Also, I know there are a lot of other similar stories around the US. I would
really like to find and ear something similar in an European country, in the
hi-tech industry: a small startup doing a good job, with a tiny but prepared
team, being lately acquired by a larger competitor. Is there any similar story
based in the old-continent?

~~~
nickstinemates
If you can bootstrap, why raise unless you have a major barrier to achieve
success?

~~~
emptybits
The stock answers to "why raise?" reduce to 1) to achieve the same success
faster, or 2) to achieve a larger scale of success, or 3) because raising
money drops you into a new world of experience and learning and future
networks.

I'm not suggesting any of the above are superior paths to what was chosen in
the article, BTW.

------
giulianob
When did you guys get acquired? I used AgileZen a couple of years ago at a
large company and I'm curious if it was before or after the acquisition.

~~~
nkohari
We joined Rally on April 1st, 2010.

~~~
NDizzle
Do you ever wonder if it's a long-con April fools joke? My wedding anniversary
is that same day!

------
ScottBurson
I've used Rally and don't care for it. It wouldn't surprise me at all if
you've come up with something that's actually better. I'll take a look at
AgileZen... though now that Rally owns it, I don't know that I'd use it
because I'd be concerned they would screw it up.

------
jsingleton
Good read. Can't wait for the next part. Keep it up.

Oh and thanks for Ninject BTW! Maybe you should alter the footer on
[http://www.ninject.org](http://www.ninject.org) to point to
[http://nate.io](http://nate.io).

------
klink008
I currently live in Columbus and actually attended CodeMash this past year.
Its great to hear about people in my own back yard, so to speak, that have a
successful start up. Typically you only hear about them in silicon valley.
Great story and i'm looking forward to the next installment.

~~~
kmeves
I live in Columbus too. Its a huge start-up city. Some label it as the next
Silicon Valley because of Battelle, Ohio State, and the SIGNIFICANTLY lower
cost of living.

------
jameshk
Interesting and well-written. Thanks.

------
dreamcompiler
This seemed counter to pg's advice about corp dev
([http://paulgraham.com/corpdev.html](http://paulgraham.com/corpdev.html))
until I read the last paragraph.

------
serve_yay
So the takeaway is, start your company in San Diego or Thailand or something
:)

------
srameshc
Great story and well written. I always like stories with happy ending :)

~~~
nkohari
You might be disappointed at the rest of the story, then. :)

~~~
matthewrhoden1
I feel like this is the next episode of game of thrones that I'm waiting on,
looking forward to reading it

~~~
mjcohen
Red wedding.

------
ca98am79
great to see some other hackers from Akron on Hacker News. Sorry the
acquisition didn't work out as you expected - looking forward to your next
blog post

------
mattmaroon
Congrats man! We met a couple years back, glad to hear things ended up going
well for you guys! If you're ever back in Akron let's grab a beer.

~~~
nkohari
Sure Matt, I remember! We come back every now and again, so we'll have to take
you up on that offer.

------
codewithcheese
Got me hooked :) Looking forward to the next post. Please fix the rss, so I
can get the next post in my inbox (ifttt).

~~~
nkohari
RSS fixed! Sorry about that.

~~~
codewithcheese
great, thanks!

------
njloof
I'd love to read the followup article -- got an RSS feed?

------
jlebrech
why dwell on one good idea all your life, if you know you can come up with
products sell it and offer the world more things.

~~~
nkohari
Working on that right now, actually.

------
user12340987
Take mine please!

