
How not to get acquired - whit537
http://blog.gittip.com/post/25565694263/how-not-to-get-acquired
======
mvkel
The lesson learned here isn't that FeeFighters fucked up their acquisition.
It's that you should be especially wary building businesses that depend almost
entirely on another startup.

Put another way, you should only use services that are pretty obviously going
to stay around and aren't just a few years old with no solid track record.

A service may be perfect for your business to hook into, but is it really
realistic to expect something like Samurai to stick around for 5-10 years?

EDIT: I would also say that yes, FeeFighters _did_ royally eff up the
acquisition process in that they threw their customers under the bus. It lends
credence to the idea that they probably had no customers to begin with.

Also, GroupOn is not the enemy here. They acquired technology, talent,
whatever. It's in their best interest to negotiate terms that are favorable to
GroupOn. If FeeFighters didn't go to bat for their current customers, why
would GroupOn volunteer to take on that burden?

~~~
whit537
Yeah, no kidding. I ended up with a merchant account with fusty old FirstData
out of the ordeal. I look at FirstData and their portal,
www.mymerchantoffice.com, in a whole new light now. It may suck, but I can
expect it to suck consistently for years to come.

It also feels now like I should be vaulting cards with multiple vendors to
avoid a single point of failure. As mentioned I went with Stripe, who are
similarly green. I'm in the process of moving my merchant account over to
Braintree. Also looking at WePay and Dwolla. Who else?

~~~
polyfractal
Braintree is pretty great, I like working with their API and customer service
(always ready and willing to talk on the phone, which is great).

Avoid Authorize.Net like the plague. Horrifically bad XML API that will make
you want to claw your eyes out.

~~~
tzs
Where is there XML in Authorize.Net's API? Here's how you charge a card using
the AIM (Advanced Integration Method) interface (Perl sample code):

    
    
        my $post_values	= 
        {
            "x_login"			=> "API_LOGIN_ID",
            "x_tran_key"		=> "TRANSACTION_KEY",
            "x_version"			=> "3.1",
            "x_delim_data"		=> "TRUE",
            "x_delim_char"		=> "|",
            "x_relay_response"	=> "FALSE",
            "x_type"			=> "AUTH_CAPTURE",
            "x_method"			=> "CC",
            "x_card_num"		=> "4111111111111111",
            "x_exp_date"		=> "0115",
            "x_amount"			=> "19.99",
            "x_description"		=> "Sample Transaction",
            "x_first_name"		=> "John",
            "x_last_name"		=> "Doe",
            "x_address"			=> "1234 Street",
            "x_state"			=> "WA",
            "x_zip"				=> "98004"	
        };
        my $useragent	= LWP::UserAgent->new( protocols_allowed => ["https"] );
        my $request		= POST( $post_url, $post_values );
        my $response	= $useragent->request( $request );
    

That's just a straightforward form post to a CGI. Result is a line of CSV
data. No XML in sight.

Does the non-AIM option (I forget what it is called) use XML?

~~~
polyfractal
I don't have the code handy (was client work for a third party), but we
definitely used XML through Auth.net's AIM. Here are the API docs for it:

<http://www.authorize.net/support/AIM_guide_XML.pdf>

We also used XML through their CIM to manage customer profiles. To be fair,
this was all in PHP, and the code was inherited so I'm not sure if there was a
better way to deal with Auth.net's API.

I do know that their dashboards were thoroughly unpleasant to deal with and I
felt the API was obtuse in many different locations.

~~~
tzs
Interesting. Here's the non-XML AIM guide:
<http://www.authorize.net/support/AIM_guide.pdf>

That's the one we use. I didn't even know they had an XML option--and now I'm
going to try to forget it! :-)

~~~
polyfractal
Interesting! I had no idea they had a non-XML option. If I was still working
on the project, I'd totally push for that.

Good to know for future projects =)

------
seanharper
Hello everyone -- this has been an interesting and painful conversation to
watch. I am Sean, co-founder of FeeFighters.

Integrating the acquisition of a small company into a large company is hard. I
suspect there are very few acquisitions where customers do not experience at
least some pain. I am deeply sorry for customers who have had support tickets
get dropped or experienced slow responses during this period of integration.
We are working to smooth things out.

When we got bought, in addition to some personal stuff, like moving across the
country (most of our team moved to Palo Alto, so we could all be together
instead of distributed), we had to very quickly build additional functionality
and scalability into our product to support the ambitious goals that Groupon
has for our technology. Since we have been more focused on development and
since Marc and Stella, who were doing a lot of our customer service, did not
come along with the acquisition, our customer service has suffered.

It is really uncool how quickly other startups are to snipe at each other. We
started a business, pivoted, built something valuable, sold it at a profit,
and are now in an amazing position to solve the customer problems we initially
set out to solve. If that resulted in you having a bad customer experience, it
is perfectly reasonable to complain about it, and we are listening and working
to fix it. But (Fred from Fleapay) why would you insult us by saying that we
didn't build our product (we did)? And what do you know about why Groupon
bought us? And what does Ayn Rand have to do with this anyway?

As always, if you are a customer and you want to talk, I am at
sean@feefighters.

~~~
true_religion
> It is really uncool how quickly other startups are to snipe at each other.

You abandoned your paying B2B clients, and left them holding the ball with
annoyed customers and damaged cash flow. Isn't it unfair then to complain that
they are badmouthing you?

Out of professionalism (if not contractual obligation), this situation should
have been better handled. Finance is all about trust in questions such as:
will they pay me? can my customers have faith in them? what happens if there's
a problem?

To be fair, FeeFighters isn't the worst transitional incidident in recent
history (AlertPay's was much worse), and hasn't harmed the most people
(ePassporte and iBill before it were terrible).

I'm not one of your clients, and before this fiasco I had quite a bit of
respect for FeeFighters, but in the future I'll find myself vary wary about
using any financial product you create or invest in.

~~~
jrs235
Reminds me when a bunch of Minnesota nurses walked-out on their patients in
protest of conflict with their union negotiations claiming "We're doing this
for our patients, because we are understaffed and the hospitals need to staff
more but are unwilling." Complete BS. You care soooo much about your patients
(customers) that you walk out on them... not cool [and highly hypocritical].

~~~
true_religion
This is nothing of the sort.

I would feel genuine sympathy for FeeFighters if they were shutting down their
program because it didn't pay well---bankruptcy, and the need to feed your
family are reasonable obstructions to delivering an orderly shut down.

However that's not the case. They got acquired, and on the eve of their pay
day they decide to begin ignoring the very customers responsible for their
valuation.

------
1123581321
I heard a FeeFighters employee speak last year and she recommended objectivism
(Ayn Rand, Atlas Shrugged) as a good philosophy for entrepreneurs, saying it
worked for FeeFighters. When I heard they sold, I assumed that the deal was
bad for FeeFighters customers because FeeFighters staff were so compassionless
due to their philosophy. Unfortunately, it seems that I was right.

~~~
whit537
:-(

"I had a hard time with Ayn Rand because I found myself enthusiastically
agreeing with the first 90% of every sentence, but getting lost at 'therefore,
be a huge asshole to everyone.'"

<http://xkcd.com/1049/>

~~~
dmix
I'm sure there are plenty of good ideas and lessons from reading the bible.
Doesn't mean you have to live up to every word of it without common sense.

~~~
WalterSear
I haven't seen any that weren't stolen from somewhere else and weren't no-
brainers to begin with.

~~~
entropy_
"The first thing to get clear about Christian morality between man and man is
that in this department Christ did not come to preach any brand new morality.
The Golden Rule of the New Testament (Do as you would be done by) is a summing
up of what every one, at bottom, had always known to be right. Really great
moral teachers never do introduce new moralities: it is quacks and cranks who
do that. As Dr Johnson said, ‘People need to be reminded more often than they
need to be instructed.’ The real job of every moral teacher is to keep on
bringing us back, time after time, to the old simple principles which we are
all so anxious not to see; like bringing a horse back and back to the fence it
has refused to jump or bringing a child back and back to the bit in its lesson
that it wants to shirk."

\-- C.S Lewis "Mere Christianity"

------
mhp
I just discovered that FeeFighters got acquired due to this post. I'm so
disappointed. This product does not belong at Groupon.

We've been emailing Sean recently to ask him about Samurai and I guess this
explains the no response. I really loved what he was doing and sung the
FeeFighters praises from the mountaintops whenever I could. I really wish that
product had stuck around. All the info that they were producing on their blog
was really just gold for businesses. The education they were giving on
interchange plus pricing, etc, was really important (but I guess becoming less
important now that places like Stripe are hiding all those complications
behind their simple pricing).

~~~
whit537
I had a great experience with Sean and FeeFighters before they were acquired.
I can understand being in a crowded market and eyeing the exit. It could
certainly be handled more gracefully. GroupOn should either support the
product, or at the very least support people trying to migrate their data
away. That's the really frustrating part of this. I lucked out to have this
come to a head early on, with only 25 cards vaulted. If you have 250 or 2,500
... :-(

~~~
dangrossman
> I lucked out to have this come to a head early on, with only 25 cards
> vaulted. If you have 250 or 2,500 ... :-(

I'm stuck with a merchant account provider I detest, that's raised my rates
just about every month for 3 years, because there's no way to get my
customers' info back out of the payment gateway. It's either keep wasting
money on rates nowhere near what I initially agreed to, with lousy support, or
lose even more money by asking every customer to re-enter their billing info.
Just a few percent deciding to ignore the mail and let their subscriptions
lapse would be more costly than the fees.

These days, in the US at least, there's affordable options for both payment
info vaults that can connect to multiple gateways, or gateways offered by
merchant companies that will give you your data if you decide to leave them. A
few years ago, that wasn't really the case.

~~~
true_religion
Transfer away as many customers as you can.

To those who don't respond the first time, give them an offer for an X%
discount for loyalty or something of the such. When they try to take advantage
of it, then ask them to give you billing information once again.

You should hit 99.9% with that, and either take a loss on the custoemrs left
over or more likely keep the legacy customers alive for years on to come.

------
vailripper
I was in the process of integrating Samurai myself. Luckily, I hadn't yet
launched and was able to switch over to Braintree. Thus far I've been really
happy with Braintree.

The part that I find really offensive is - they're still taking new account
signups, with zero support for those users.

------
niketdesai
I appreciate the Author's attempt to empathize with the founders/team on the
acquisition results. It's not an obligation for customers to consider anything
beyond what they were promised and pay for - so kudos there.

That said, the difference between the startup and big co. is so vast that
there will never be a single person to be blamed for botched acquisitions. In
fact, both parties are at fault - not for initiating the buy - but rather for
the failure to commit so fully that an alternative outcome could have been
had.

In some circumstances it does make sense to shutter a project, but that
doesn't mean a good plan to make that happen appropriately can't be had (I
understate the complexity of making that happen). Additionally I'd like to
note that within larger companies, both the appetite and passion for making
acquisitions work is highly variable. And frankly, it requires a lot of broad
effort to make it work which is why acquisitions are so hard to do well.

Anyways I'm glad that gittip was able to find a replacement solution; these
setbacks are only part of the process in building your own entrepreneurial
endeavor.

~~~
whit537
Fair enough. In the previous blog post that I quoted, I was thinking in terms
of fine-grained things: "A specific human is responsible for the way issues
are cross-linked in GitHub. Another specific human is responsible for the
slide-out transition on the Tumblr HTML theme editor." You're right that for
something as complex as an acquisition, there's unlikely to be a single
GroupOn Effer. To open up corporations is a much more nuanced task than simply
identifying a scapegoat as part of crisis management.

It was probably unhelpful to oversimplify about GroupOn Fucker. Sorry. :-(

------
antidaily
Weird acquisition. FeeFighters didnt even build Samurai. And Samurai had
nothing to do with Groupon grabbing em. It was some other thing they were
building apparently.

We're (Fleapay.com) getting ready to integrate with Braintree. So far, they've
been very helpful. Nice people.

~~~
ComputerGuru
What are you talking about? FeeFighters is a Samurai project. And Groupon
bought them out.

~~~
antidaily
FeeFighters didn't build Samurai. As I understand it, they acquired the
team/project who did.

~~~
vailripper
I believe it was a partnership between FeeFighters and Arizona Bay (one of
their funders)

------
dowskitest
A post on this same topic > 1 week ago that didn't get any traction:

<http://news.ycombinator.com/item?id=4101870>

------
tocomment
Could he use Stripe instead?

~~~
whit537
That's who I switched to.

~~~
tocomment
So problem solved? (BTW I liked your lightening talk at Pycon)

~~~
whit537
We'll find out tomorrow. :-)

<https://www.gittip.com/about/stats.html>

And thanks!

~~~
tocomment
By the way, I just thought of a killer feature for your site. How about if
users can link the amount/frequeny tipped to the developer's activity on a
github project?

Maybe the user could set metrics to link the tips to like tests added, LOC
removed (refactoring), issues resolved.

Well just a thought.

~~~
whit537
<https://github.com/whit537/www.gittip.com/issues/70>

~~~
tocomment
Awesome, I'm famous :-)

~~~
whit537
:-)

------
danielweber
When/how does mint charge $2.99 a month? I've never paid anything.

~~~
ComputerGuru
He charges $2.99 for his mint alternative. It was a very poorly worded post.

~~~
whit537
Sorry ... the whole post was poorly worded?

I changed the comma to a semicolon, if that helps.

