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I once killed a $125M deal by being “too honest”

289 pointsby akhover 3 years ago

29 comments

awbover 3 years ago
Another moral to this story that I haven’t seen mentioned yet:<p>Don’t give unsolicited advice.<p>Not only was this advice to buy a different company not asked for, it was presented in a vague way: “They’re better than us”.<p>If I was the CEO of Yahoo on the receiving end of that, I’d be thinking a few things:<p>1) You don’t know my business well enough to be giving me unsolicited advice.<p>2) You’re passionate about subjective opinions: “They’re team is better than us.”<p>3) You appear to be lacking confidence by buying into this subjective thought that another team could be “better than” yours.<p>4) You don’t lead with the important information, about why you think they’re better: Are they more efficient? More experienced? More creative? More careful?<p>5) Your passion and attention is placed on the future rather than the present and the more important task that I’m paying you for which is integrating your business into our ecosystem.<p>The list probably goes on, but the phrase “They’re team is better than ours” raises a lot of red flags IMO.<p>Looks like it ended well in the end as they sold for 2x to Microsoft just 6mo later. A great example of “failing up”, which happens to a lot of successful entrepreneurs.
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FinanceAnonover 3 years ago
Is this the same guy who recently posted about trying to bluff Steve Jobs, getting called out on it and losing a deal? I wonder how many more stories like these he has lol<p>Edit: found the link for those interested <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=28826437" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=28826437</a>
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brkover 3 years ago
In sales there is a term &quot;know when to stop selling&quot;, this story is kind of a variant of that. If you have acceptable terms worked out, stop &quot;selling&quot;, stop trying to show or add more value to the deal.<p>Close the deal you have, and then work on any new or additional things.
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bmitcover 3 years ago
I know we&#x27;re on a forum associated with a startup accelerator, but something just rubs me wrong on these waxing poetic startup stories. It&#x27;s like these people live in their own little world, where companies and little &quot;ideas&quot; and massive sums of money are just pawns in some game that ultimately doesn&#x27;t matter. It&#x27;s a sort of entrepreneurial aggrandizement, and there&#x27;s a lot of unnecessary adulation and cult of personality.<p>There was some reply there that was basically &quot;I lost tens or even hundreds of millions of dollars because of a dumb decision too but I have no regrets&quot;. Seriously? That&#x27;s immediate retirement money for me, my immediate family, and then enough left over to pursue pet projects, volunteer work, and non-profit(s). This guy in the posted Tweet made an idiotic decision that killed an opportunity for himself and his employees, and he seems okay with that and even fond of the decision. Kind of weird to me.
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lordnachoover 3 years ago
Integrity matters. Even if he hadn&#x27;t gotten a big offer later on, he could still walk away with that.<p>Yes, you can argue that he could have just kept his mouth shut and still honestly taken the Yahoo deal, but he said what he thought was right and gave Yahoo some good judgement about pg&#x27;s team.<p>I recently interviewed with a number of firms, and the ones that give off the best impression are the ones who ask to integrity at some point in the process. Hopefully this won&#x27;t turn into the next &quot;what&#x27;s your greatest weakness&quot; of interview questions. But firms doing the same thing in the same industry can often have a very different feel to them, and this is one of those things that might change your impression.
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numairover 3 years ago
&gt; As a financially-insecure immigrant, I knew this deal would change my life.<p>What <i>is</i> it with this guy and his desire for a hero narrative? First he took credit for the Like button, now this... His cousin Dara is totally insufferable in his lackluster position as CEO of Uber, but at least he’s honest about their very privileged upbringing.<p>Is this a prelude to a political career or something?
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timdaubover 3 years ago
Nitter.net link. Here&#x27;s the link that should have been submitted to HN assuming not all HN users have&#x2F;want Twitter accounts: <a href="https:&#x2F;&#x2F;nitter.net&#x2F;apartovi&#x2F;status&#x2F;1449856639331340289" rel="nofollow">https:&#x2F;&#x2F;nitter.net&#x2F;apartovi&#x2F;status&#x2F;1449856639331340289</a>
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jraphover 3 years ago
Ok, my take away: if I ever want to merge my team with another team, I&#x27;ll avoid &quot;but that team is better than us&quot;<p>(not that I&#x27;ll ever be in that situation in the foreseeable future anyway)<p>(pg&#x27;s answer in this thread: &quot;Whoah, I had no idea about any of this till now...&quot;)
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toss1over 3 years ago
Great story (&amp; from the same guy with the Steve Jobs story ~last week).<p>Immediately calls to mind two phrases of advice I&#x27;ve found very useful over the years related to sales and deal making.<p>&quot;Quit drilling - you struck oil&quot;, as in don&#x27;t try to keep selling once your counterparty agrees - you can only cause harm at that point (and even if there are more great things to discover, no harm if they get happier after the deal closes.)<p>And, one of the the most frequently applicable ones in life (&amp; once seen l, it&#x27;s amazing to see how much unhappiness comes from not heeding it):<p>&quot;The deal&#x27;s not done until the check clears.&quot;
Version467over 3 years ago
That hurt to read. I&#x27;m expecting to be in a position where I could meaningfully influence any acquisition or merger (let alone a 125 million USD one), but knowing when to shut your mouth is a valuable skill to have in many situations.<p>I&#x27;ll try to keep this in mind whenever I realize that I&#x27;m overexcited (which I tend to be).
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coldacidover 3 years ago
Lost a $125M deal, but gained a $265M one months later. It may have hurt originally, but sounds like things eventually ended up better than expected!
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NVHackerover 3 years ago
Blabbering your opinion when you should shut up has nothing to do with &quot;honesty&quot;.
darkersideover 3 years ago
I know pop culture references don&#x27;t always go over well here, but this reminds me of the Kanye situation at the VMAs. He was likely drunk and attention-seeking, but he was also probably completely incensed when he saw Beyonce fail to win Best Music Video for &quot;Single Ladies&quot;. He saw such a misunderstanding of a clearly superior talent and effort that resulted in a qualitatively better result, and he couldn&#x27;t help but say something, and ended up putting his foot in his mouth.
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jcccover 3 years ago
From pg:<p>“Whoah, I had no idea about any of this till now...”<p><a href="https:&#x2F;&#x2F;mobile.twitter.com&#x2F;paulg&#x2F;status&#x2F;1449861338390466561" rel="nofollow">https:&#x2F;&#x2F;mobile.twitter.com&#x2F;paulg&#x2F;status&#x2F;1449861338390466561</a>
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buescherover 3 years ago
Am I the only one who reads these stories (others have linked to his Steve Jobs story - he was, um, not honest enough for Steve Jobs) as &quot;I almost got acqui-hired twice by names you&#x27;d recognize but flunked the job interview both times&quot; rather than as dashing tales of dealmaking derring-do?
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armchairhackerover 3 years ago
Tdlr; he was &quot;too honest&quot; because he literally told the buyer that there was a similar company with better engineers - essentially that there was another company which could do the same exact thing much better. So they bought the other company instead.<p>Were the engineers objectively &quot;better&quot; than yours, or was there still something your company offered that the other did not? If the other company was essentially better, than you&#x27;re lucky Yahoo didn&#x27;t realize and you got that deal in the first place.
ChrisMarshallNYover 3 years ago
I am sorry he lost the money, but this quote:<p><i>&gt; My intentions were good, if naive. I helped both Yahoo and Viaweb. Business isn’t just about winning; it’s about helping others.</i><p>Tells me that he&#x27;s a decent chap.<p>I mentioned in another post, that today&#x27;s culture doesn&#x27;t reward &quot;decent chaps.&quot;<p>In my own case, I don&#x27;t care. I do my best to be a &quot;decent chap,&quot; even though I&#x27;ll never get rich that way.<p>I&#x27;m clean-shaven, and it&#x27;s important to be able to look myself in the eye every morning, or I&#x27;d cut myself to ribbons.
thih9over 3 years ago
Twitter web UI is not loading tweets for me past the 18th message. Is anyone else facing this or knows how to read the rest?<p>Edit: <a href="https:&#x2F;&#x2F;threadreaderapp.com&#x2F;thread&#x2F;1449858706750033921.html" rel="nofollow">https:&#x2F;&#x2F;threadreaderapp.com&#x2F;thread&#x2F;1449858706750033921.html</a>
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xwdvover 3 years ago
I don’t even see his mistake as being “too honest”, it’s more like he was just being petty. If someone thinks a company sucks but you think it’s great, is it really worth arguing to change their opinion, especially with such an inflammatory statement?
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ghufran_syedover 3 years ago
This wasn’t integrity - just bad sales technique. He had some knowledge that was potentially of value to Yahoo, but instead of seeing if Yahoo was interested in buying that knowledge, he just gave it to them for free.
wombatmobileover 3 years ago
&quot;When you&#x27;re young, the temptation is maybe to think, &#x27;More is more.&#x27; But a lot of the time less is more.&quot;<p>-- Daniel Ricciardo
pixelgeekover 3 years ago
“To lose one parent, Mr. Worthing, may be regarded as a misfortune; to lose both looks like carelessness.”
MichaelZuoover 3 years ago
If he didn’t make that momentous blunder, YC may never have happened…
qwerty456127over 3 years ago
&gt; I wasn’t allowed to respond to him, and I wasn’t allowed to tell him why.<p>This is ridiculous. I can hardly believe such requirements are legally allowed to exist.
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jiveturkeyover 3 years ago
ouch. I want to bask in the schadenfreude and the superiority complex over this noob, but I cannot. The way he relates the story is deceptively endearing. I like this guy and would work for him, even knowing that he so deftly killed his own companies in the past.<p>I mean, taking him at his letter.<p>It is all a lie though.
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cratermoonover 3 years ago
I admire him for his honesty and not letting greed and ambition get in the way of being a decent person.
InternetPersonover 3 years ago
There are many reasons why Yahoo may have called off the deal. I doubt it was this one single comment.
cudgyover 3 years ago
Alcohol damages more than our brains.
crate_barreover 3 years ago
Why is everyone so sure Yahoo would not have reneged on the deal anyway? If they were ready to renege the way they did, which is extremely ruthless, what makes you all think Yahoo would divulge they were doing due diligence on Viaweb with an existing floating offer already in place for LinkExchange? Maybe another company was out for Viaweb, Yahoo secures LinkExchange, but continues to try for Viaweb, totally ready to drop LinkExchange if Viaweb comes through.<p>Look at what the company did (renege an offer) and you will understand what they were also doing behind the scenes.<p>A little bit of a hot take, but I don’t think $125 mil goes out the window because someone said something over drinks (especially something as benign as an exaggerated flattering compliment).<p>I often give similar compliments when others undermine someone I know well, but respect me. I always say ‘look, that person is a better person than me’, all I’m trying to convey is if ‘if you respect me, know that I respect them, so take that into consideration’. I don’t literally mean they are a better person, that’s not for me, or for you to judge, so let me flip this notion on its head for all of us.
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