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When I saw this graph I was hooked. If you are a Twitter user and you don’t use Followerwonk, go try it now – I’ll be here when you return.
Yesterday, SEOmoz announced that it had acquired Followerwonk. The acquisition closed about six weeks ago and the Followerwonk product has been fully integrated into SEOmoz. And the Followerwonk team is now fully part of the SEOmoz team. And it’s awesome.
Rand Fishkin (SEOmoz’s CEO) blogs openly about how the deal happened. It’s instructive for anyone in a startup – either one that is acquiring someone else or being acquired.
If you know me, or have worked with me, you’ll recognize this as a common part of my startup playbook. I think it’s incredibly powerful to accelerate the growth of a company via targeted acquisitions. Fred Wilson once referred to this as a “venture rollup” which, while many are allergic to the word “rollup”, is probably as good a label as any for this. Another recent example from my world just to see what I mean is Rally Software’s acquisition of Agile Advantage.
Doing this well is hard. I’ve been fortunate to work with several amazing CEOs who I’ve learned a lot about how to do this with, including Matt Blumberg (Return Path), Tim Miller (Rally), Mark Pincus (Zynga), and JB Holston (NewsGator). And I learned the basis of everything I know about acquisitions from Len Fassler and Jerry Poch, who acquired my first company. Each has used the strategy skillfully and effectively.
I think Rand, who is using this strategy as part of continuing to build out SEOmoz, is going to be a master at it. If you read his post carefully, you’ll see that he has immense respect for the people behind Followerwork. His behavior pre-deal is consistent with his values and signals his behavior post deal. The entire company embraced Followerwonk and made them part of the SEOmoz gang immediately. He, and the entire team extended trust up front, unambiguously, and without hesitation or reservation.
Peter, Marc, and Galen – welcome to the team!
On Monday, StillSecure announced that it has acquired ProtectPoint. ProtectPoint is a managed security service provider (MSSP) and immediately adds a portfolio of managed security products to StillSecure’s award-winning product arsenal. Alan Shimel, the Chief Strategy Officer of StillSecure, does an excellent job of explaining the reasons for the acquisition in his post titled StillSecure acquires ProtectPoint, entering the MSSP market – Why?
This is the second time in less than a month that a company I’m on the board of has made an acquisition. At the end of January, in my post titled Rally Software is a Buyer I wrote:
“[With regard to an acquisition strategy] I’m seeing this pattern with a number of the established companies I’m an investor in. Having gone through this cycle several times and had success and failure with acquisition driven strategies, I’ve got a clear view on when and how it can work successfully. I’m not interested in garbage truck mergers (two crappy companies that get jammed together to hope something good comes out of it) – all of my energy is focused on having a market leader pick up a complementary technology or market “asset” that helps accelerate the product or market roadmap.”
As with Rally’s acquisition of 6th Sense Analytics, StillSecure has been working on building out a set of managed security offerings around their product set. The demand for managed security services (or security as a service, or whatever you want to call it) has been steadily increasing and StillSecure decided to explore a buy vs. build approach to accelerate their entry into the market. StillSecure went searching for a company to acquire and found a great fit (functionally and culturally) with ProtectPoint and now has a fully built out and well regarded MSSP offering as part of its product mix.
Having spent some time with Steve Harris, the CEO of ProtectPoint, I’m really excited about what he and his team bring to StillSecure. I also have another person to hang out besides Alan when I head to Florida for a break from winter. Steve and team – welcome aboard!