Acquired Episode 15: ExactTarget (acquired by Salesforce) with Scott Dorsey

Acquired

Ben Gilbert and David Rosenthal

Venturecapital, Ma, Investing, Acquisitions, Startups, Vc, Investment, Business, Technology

4.8 • 2.9K Ratings

🗓️ 5 July 2016

⏱️ 75 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Ben and David return to make their first foray into enterprise software, covering Salesforce’s $2.5B acquisition of ExactTarget in 2013 with the help of special guest and ExactTarget cofounder & CEO, Scott Dorsey. Technical note: due to an issue we didn’t catch during recording, audio quality is significantly lower than usual for this episode (especially David’s voice). We apologize but hope you’ll give it a chance anyway— Scott offers great wisdom & insights, and the ExactTarget success story is a inspiring one underdog entrepreneurs, especially (but not limited to!) anyone located in the Midwest or elsewhere outside of traditional "Silicon Valley-style” tech hubs.

Sponsors:
Vanta: https://bit.ly/acquiredvanta

Statsig: bit.ly/statsigacquired
Modern Treasury: https://bit.ly/acquiredmoderntreasury

Topics covered include:

The decision to start ExactTarget post-internet bubble and in Indianapolis, with zero software experience between Scott and cofounders Chris Baggott & Peter McCormick
Raising initial money from friends & family, followed by early investment and mentoring from Indianapolis venture pioneer Bob Compton
Building and scaling a great sales organization within a technology company
The importance of focusing early on a clearly defined target market (SMBs in the case of ExactTarget), and then “stair-stepping” up as the product and business scale grow over time
ExactTarget’s unsuccessful first IPO filing during the financial crisis
Building a "capital-efficient” early stage company, and the value of raising growth capital at the right time to step on the accelerator
The value of “secondary” investments allowing founders, employees & early investors to “stay hungry” by achieving some liquidity along the way
When and how to expand internationally and the importance of strategic resellers
ExactTarget’s second successful IPO filing and life as a public company with quarterly financial reporting to Wall Street
How the acquisition process played out with Salesforce and other bidders (including reference to ExactTarget’s incredible SEC filing detailing the entire negotiation—scroll down to "Background and Reasons for the ExactTarget Board’s Recommendation”, starting at the bottom of page 13)
Approaching the difficult task of integrating a major acquisition involving thousands of people
The fun story of ExactTarget’s winning Microsoft as a large customer—including actual sledgehammers
Scott’s new Indianapolis-based venture studio, High Alpha
Plus as always the "hard hitting" analysis across acquisition category, what would have happened otherwise, tech themes—and final grading

The Carve Out

Ben: The Talk Show live at WWDC 2016 with Phil Schiller & Craig Federighi
David: The Score Takes Care of Itself by legendary 49ers coach Bill Walsh, originally recommended by Jack Dorsey [no relation to Scott :) ] at YC Startup School '13
Scott: 2016 Scipps National Spelling Bee, including one of the finalists’ favorite words: indefatigable

Followups:

Instagram’s incredible user numbers announcement: 500M monthly active users / 300M daily active users

Transcript

Click on a timestamp to play from that location

0:00.0	All right listeners, our sponsor is one of our favorite companies, Vanta, and we have something very new from them to share.
0:07.0	Of course, you know Vanta enables companies to generate more revenue by getting their compliance certifications.
0:12.8	That's SAC 2, ISO 2701.
0:15.7	But the thing that we want to share now
0:17.9	is Vanta has grown to become the best security compliance
0:21.4	platform as you hit hyper growth and scale into a larger enterprise.
0:26.9	It's kind of wild.
0:27.9	When we first started working with Vanta and met Christina, my gosh, I've had like a couple
0:31.6	hundred customers, maybe.
0:33.7	Now they've got 5,000, some of the largest companies out there, it's awesome.
0:38.3	Yeah, and they offer a tremendous amount of customization now for more complex security needs. So if you're a larger company and in the
0:45.2	past you showed Vanta to your compliance department you might have heard something like, oh well we've already got a compliance
0:50.4	process in place and we can't integrate this new thing.
0:53.0	But now, even if you already have a sock to,
0:56.0	Vanta makes maintaining your compliance even more efficient and robust.
1:00.0	They launched vendor risk management.
1:02.0	This allows your company to quickly understand the they launched vendor risk management.
1:02.6	This allows your company to quickly understand the security posture of the vendors
1:06.9	that you're choosing in a standardized way that cuts down on security review times.
1:11.3	This is great.
1:12.0	And then on the customization front they now also
1:14.4	enable custom frameworks built around your controls and policies. Of course that's
	...

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