Some thoughts on more effectively integrating tech start-up acquisitions

Prepare people for the differences between working at a larger organisation vs a smaller scale start-up

Both the business/product strategy and ways of working will change.

Business/product strategy

What is the new business context? For example:

Use the backing of the larger organisation to fund the rapid growth of the previous start-up’s product line. This may be to grow revenue or to grow the overall market.

Shift away from the previous start-up’s product line and use capabilities to support the larger organisation’s goals. That is, the start-up’s previous revenue might be irrelevant.

Without clarity around the new business/product context, people will not know how to allocate effort between maintaining and growing existing products vs integrating with the larger organisation. Ideally, this allocation should be an explicit agreement that can be iterated on.

Ways of working

Key differences between working at a smaller-scale start-up and working at a larger organisation to be aware of:

The need to manufacture authority, get buy-in, build alignment across groups rather than just decide to do something and go. The general idea is that you’re trying to push the conflict up-front to reduce/avoid ongoing conflict later. Note that this should be more consent over consensus.

Matrix structures (i.e., reporting line structure different from the delivery structure). At larger organisations, it’s likely the reporting line structure (disciplines) is distinct from the value delivery structure (cross-disciplinary teams). The idea is that the manager you report to is more capable of developing your skill in the craft of your discipline. This distinction might not exist at smaller-scale start-ups.

There are many more centralized resources available. Because of scale, larger organisations have more centralized resources available that smaller-scale start-ups would either have to do themselves or simply do without. This includes recruiting, operations, program management, Agile coaching, etc.

Assign a sponsor, a buddy, and an integration manager

  • A sponsor raises awareness of, and advocates for, the new acquisition’s perspective and interests;
  • A buddy provides guidance, translation, and helps establish relationships;
  • An integration manager helps coordinate the activities needed to integrate the acquisition into the larger organisation.

The buddy and integration manager might be the same person, but the sponsor is likely to be someone distinct.

More ritual to celebrate joining

It’s a significant emotional transition to let go of identifying with an independent start-up to then identify being a part of a larger organization.

Ritual can be useful to acknowledge this transition and frame it in a positive light (being welcomed, seeing people excited about the transition, etc.).

Adjust roadmaps to account for data and platform integration activities

Even if you delay merging products, you should not delay activities required to integrate data required for reporting etc.

Also given most acquisitions are smaller and not designed for the scale of the acquiring organisation, you generally need to do some kind of infrastructure upgrade. As a default, it’s worth taking the pain earlier to shift to the larger organisation’s platform to free up staff supporting any standalone platforms.

This requires earlier transparency to allow for reserving capacity in roadmap planning OR a willingness to adjust roadmaps that are in-flight.

Take your time with internal process/structure integration; be up front about cross-boundary process expectations and larger context

It is useful to reduce the number of process/structure changes that the new acquisition needs to absorb all at once, however there are several areas that should be addressed to reduce ambiguity:

  • Expectations for how to interact with other groups (e.g., how to propose changes, how to get help, how to respond to requests, etc.)
  • Product context (e.g., broader product strategy and roadmap, what other people are working on, etc.)
  • Organizational context (e.g., map of org structure and stakeholders, where does the new acquisition fit within the larger organisation, etc.)

Sell the acquiring company’s teams on the new vision as well

The acquired company would have heard more about the new vision than acquiring company’s teams (unless there is more transparency internally up-front).

How does the new acquisition fit into the overall company strategy, meaning therefore that it’s important for us all to support them?

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Jason Yip

Jason Yip

6.3K Followers

Staff Agile Coach at Spotify, ex-ThoughtWorks, ex-CruiseControl