Cultural Integration of start-up and traditional business

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  • #96094
    Thinus
    Participant

    I’m looking for some recommendations and tips when integrating a technology based start-up with a traditional organisation with a long history and many traditions in the way they operate. Consider this as a merger of equals, so one culture cannot easily over power another and the new CEO is from the Start-up.

    #96224
    Chris
    Participant

    Hey Thinus,
    .
    We did this exact type of acquisition a little over two years ago.
    .
    The parent company being a 700 employee SaaS company, in business for 15 years with $100M+ ARR. The acquired company ( C-corp ) was also SaaS, but only 15 employees and about $60,000.00 in ARR with some potential as they had a lot of free customers, high monthly traffic, and their product integrated well into our suite.
    .
    Then we did it again about a year ago ( Bcorp ). this time a slightly larger company with 40 employees. Again, a good technology fit. Both SaaS companies. The main difference with this company was it was completely remote, and Vcorp had an in-office first culture.
    .
    The cultural challenges were similar, and it really boiled down to the leaders, especially the CEOs. What we learned is that you have to simply get rid of those CEOs with a fair package. CEOs are CEOs for a reason. They are typically intelligent, charismatic, and stubborn as hell.
    .
    When it comes to building software, you need alignment. You cannot have mixed messages or lines of thought. You especially cannot have subversive conversations and movements within your company. It is likely not maliscious, but it has the same effect. It divides your vision, mission and strategy.
    .
    In the last 3 years we have performed 4 acquisitions, and the only CEO role that blended well was a very seasoned CEO that was not a true technologist, despite running a technology company. In this case, the CEO was excited to take on a different C-level function.
    .
    Not all acquisitions are the same. Wish you luck.

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