Lessons Learned From Accidentally Selling My Startup

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Lessons Learned From Accidentally Selling My Startup

My story of ceding control of the business that I had no intention of ever leaving

Lessons Learned From Accidentally Selling My Startup

In 2017, I sold my startup to the largest company in the college sports recruiting industry. With the paperwork signed, I celebrated by leaving my co-working space at 2pm and treating myself to ice cream — despite it being a cold November day in Chicago.

I was over the moon. Suddenly, Zcruit — the brand I started in college and launched less than a year prior — was set to receive an infusion of resources. Instead of worrying about payroll, cash flow, or fundraising, I just had to focus on building a great product and growing its customer base. I’d have all the support I needed to scale Zcruit quickly. As long as I didn’t screw things up, it felt like nothing could go wrong.

Four years later, I walked away. Zcruit had developed into a successful product working with over 90 Division 1 football programs. My partners and I made out well financially. And I left feeling disappointed. Unsatisfied. And unaccomplished.

This is my story of starting and selling my startup, and what I learned from ceding control of the business that I had no intention of ever leaving.

The College Days: Stumbling into a Revenue-Generating Product

In college, I hadn’t expected to start a company or be an entrepreneur. I was just hyper-passionate about football recruiting and zig-zagged along until I had a revenue-generating software product on my hands.

Starting as a 14-year-old, I would pore over sports blogs to find out who the future stars of my favorite college football programs would be. After deciding to go to college at Northwestern, I started poking around their sports sites and found that there weren’t a ton of people writing about Northwestern football recruiting. So I started doing so — first under a pseudonym and then later using my actual name.

Weeks before my freshman year, an article I wrote caught the attention of the Director of Recruiting for Northwestern Football who proceeded to offer me a job working for the team. I accepted, and after two years of learning the ins and outs of a football recruiting office, developed the idea for a product that I thought would make the recruiting process more efficient.

I recruited some other college students to help and after two years of building on the side, we’d spun up a software platform that aggregated recruiting data to help coaches and recruiters find prospects. In a whirlwind of a senior year, we caught press from USA Today and NBC News and sold our product to 13 Division 1 football teams — including Clemson, USC, and Notre Dame.

With college winding down, I decided to defer the start date on a consulting job and commit to giving Zcruit a full-time go. My college co-founders, however, opted to take other opportunities after graduation, leaving me — a non-technical Organizational Change major — alone with a software product doing $50,000 in revenue.

I was nervous and unsure of myself. Despite some early success, the product was still raw and full of holes. Unable to find a dedicated technical partner, my plan was to put our revenue into some part-time development help and see how things went. I had two college seniors that were willing to chip in 10 hours a week in between classes, and a childhood friend that was game to spend 20 hours a week writing code at Zcruit as a way to make some money on the side. I decided I’d go full-time on Zcruit for a year and re-evaluate from there. If it wasn’t going great, I at least had a job that I could fall back on.

And then, over a breakfast meeting weeks after my college graduation, the COO of the largest company in our industry handed me a piece of paper with terms to acquire Zcruit.

The Acquisition: Operating on an Island

Reigning Champs was spun up a few years earlier by a couple of guys that raised gobs of money from private equity firms that they used to buy several companies in the college sports recruiting industry.

Our press exposure had put us on their radar, and my appearance on podcasts gave them an opportunity to hear me talk passionately at length about Zcruit and collegiate athletic recruiting. They invited me to their Chicago office, and after a couple of meetings, I found myself at a breakfast table with French toast and an acquisition offer.

The company’s executives said they thought that I was onto something and wanted to help Zcruit grow by putting some wind under its sails. They’d provide me with resources to hire a team and other than that, would give us the freedom to create.

It felt like a no-brainer. As a risk-averse kid, simply getting a salary and benefits to work on the brand that I started in college seemed like a pretty sweet deal to me. But beyond that, I hadn’t started Zcruit with much intentionality in the first place…nor did I have much of a plan for where it would go. I just knew that I loved football recruiting and somehow had stumbled into creating a product that a handful of teams found value in. Between managing my rag-tag team of part-time software developers, attempting to keep customers happy, and trying to sell new ones, I’d been just trying to survive each day. But being offered resources that I could use to build out a team and invest in Zcruit’s software made me think, really for the first time, that I could create something long-lasting and significant.

And, Reigning Champs seemed like a perfect fit for both me and Zcruit. They were the largest company in our industry and truly invested in servicing it. They had an eye-catching 400-person office in my home city. Their leadership impressed me with their kindness, passion, and experience. And founders that had sold to them before had positive things to say.

So I accepted the offer, carved out a Zcruit wing in the Reigning Champs office, and worked on recruiting a team.

And for the next two years, Reigning Champs did exactly what they said: they gave us resources and left us alone. Our five-person team operated like a scrappy startup and put our heads down to build a new, cleaner, better product. We invested in customer relationships and found that not only were folks renewing with us at a high clip, but they’d give us a call when they took jobs at other colleges. We delivered more value to the product and raised our prices. We developed a great brand reputation and turned heads at trade shows — both with our booths and our happy hours. We sold and serviced our customers in a unique and authentic way, and organically grew to work with over 90 Division 1 football programs by the end of 2021.

The Integration: Losing the Illusion of Control

Unfortunately in 2020, the fun started to fade.

Reigning Champs owned two other larger, legacy companies with software products that aided college coaches in the recruiting process in other ways. Providing more value to customers and solving deeper problems in the recruiting industry wouldn’t be possible without stepping on their toes or collaborating deeply. So we integrated teams and began collaborating on product with our sister companies.

But I found that experience to be incredibly frustrating. The legacy brands dictated the product roadmap yet had product leadership whose visions I found uninspired. I suddenly found my time going towards corporate politics rather than creating product or talking to customers. And I wasn’t great at corporate politics — I didn’t have the patience for it. I was used to having autonomy over my island. I built what I wanted to build, sold how I wanted to sell, and hired who I wanted to hire. I struggled at playing a supporting role when I had such a clear and confident vision around what I believed product and operations should look like.

Next thing I knew, Zcruit’s developers became “shared resources”. Project managers were brought in to align our product processes with those of the organization at large. Full-time developers left and were replaced by contractors. Our sales guy was tapped to run sales for one of our sister companies. And we shifted to the larger company’s Outlook organization, forcing us to change our email addresses from our first name ([email protected]) to first initial last name ([email protected]).

Without any forewarning, my illusion of control melted away and I watched Zcruit turn from a scrappy startup to a bureaucratic corporation. And it stung. I’d worked hard to cultivate a unique culture and soul for Zcruit, reinforced by every person we hired and process we’d put in place. The things we did differently were our special sauce; they were the reasons our small team had accomplished as much as we had and had the customer loyalty that we did. My resistance to these changes made me feel childish, and I felt treated accordingly. “This is how things are done now, kid. This is how real businesses work.”

So at the end of 2021, tired and no longer seeing a path with Zcruit where I could positively impact the college sports recruiting industry any further, I decided to walk away.

The Final Days: Grieving, Reflecting, and Moving On

Despite knowing it was the right decision, the idea of leaving Zcruit was hard to wrap my head around. Even after the acquisition, I never pictured a world where I’d stop working on Zcruit. I just assumed that I’d either work on it forever, or that one day I’d get to a place where it felt complete. But it didn’t feel complete. I still had a strong vision for the product, brand, and overall impact Zcruit could have on the industry. After seven years, there was no satisfaction in leaving. No “mission accomplished” feeling. Just a payout that could buy me some time to figure out what to do next.

In reflecting on it, the thing I didn’t realize when I was selling my startup was, well, that I was selling my startup. That it was no longer mine. At the time, I saw only the positives: the resources, the office, the financial stability and upside. The fact that the acquisition could lead to me walking away from Zcruit while I still had a deep care for the company and a desire to drive it forward never crossed my mind.

Nonetheless, I’m proud that Zcruit still provides a great product and service. I was able to turn over management of the brand to a good friend who has been helping me with Zcruit from the start and who I trust immensely to drive the business forward. And I’m thankful that, while plans are still being developed for organization-wide product integration, Zcruit has dedicated developers not only maintaining the product, but making improvements to it as well. Zcruit is a successful brand with happy customers that continues to thrive in my absence. So why don’t I feel better about how this chapter ended?

I guess I wound up feeling frustrated by the outcome because I never stopped to consider what outcome I wanted to achieve in the first place. By choosing the acquisition, I made a decision that maximized Zcruit’s likelihood to achieve short-term success while not having a long-term plan in mind. But by the time I developed confidence and enthusiasm over a long-term plan, that same decision rendered it next to impossible to achieve.

So next time I create a product, brand, or company, I’m going to make sure that I start with the end in mind and plan for when it works. Ultimately, I’d rather fail in pursuit of a satisfying outcome than not feel satisfied by a successful outcome.

And now that I’ve experienced the fast tracks to success, financial rewards, and reputational accolades that came from selling my startup, I know that I’d trade those all in to have walked away feeling a true sense of completion and accomplishment instead.

Go to Publisher:

Entrepreneur's Handbook – Medium


Author: Ben Weiss