Patrick Sullivan is the CEO and founder of Bonsai, an online platform that connects individuals seeking career and business advice. But this is about to change because he is preparing a new startup pivot that includes NFTs and the music industry. A big pivot he’s ready to take on.
Before founding Bonsai, Patrick had three exits, two of them to large companies like Google and Facebook. He truly understands mergers and acquisitions, especially acquisitions, because he was very intentional, early on, about the way he built up his startups.
In this podcast episode, you’ll hear very interesting topics such as founder exit, how to build a company to be acquired, startup pivot, entrepreneurship tips, founder’s mindset, and many more.
Enjoy Patrick Sullivan’s story on my podcast series, Startup Stories, and let yourself be inspired or find new ways you didn’t think of before.
You can listen to the full podcast or watch the video version below:
NOTE! The full interview and content are available only in audio or video form. The followings are snippets from the interview podcast that were edited for clarity and brevity.
What could you share with us about Bonsai?
Patrick Sullivan: Bonsai was built out of a passion to help connect young entrepreneurs and founders. Everything we do is done over a marketplace and 1:1 video chat. We actually built a video platform that connects people.
We called it LinkedIn 2:0. Rather than go to LinkedIn and try to connect with people outside the platform, we actually stay on the platform of Bonsai.
That’s what we built, but we are now pivoting, and I’m happy to talk about that later. We are definitely at a critical point at the company where we are at a stage of a pivot. We found that we’re more interested in what’s going on in the web3 space, and that’s where we are making the big pivot today.
Were you always conscious about the type of entrepreneur you are and who’s following the acquisition path?
Patrick: Sullivan: When I founded my first company before that, I worked for a global business called The Orchard that’s now owned by Sony Music. I got a lot of experience working with businesses all over the world, identifying problems to solve at scale.
When I left The Orchard, my intention was to found a company that solved problems for similar types of companies, like Google, and Rhapsody Music in the music industry around copyright licensing at scale.
Even from the get-go, while starting that company on a napkin, we were thinking about how we get positioned to one day be acquired. The intention was to build a great business with revenue and all the exciting things around a company structure.
We were building a publicly-traded company with the intention that one day getting acquired.
I was very methodical and thought-through on how we did that strategically around customer acquisition, building a brand, building the revenue, and the income. We got to a point where we felt it was time to sell the company.
The second company was acquired by Facebook. We started the company to raise capital and sell it. It was a little bit more egotistical but we were very intentional.
What were the mistakes you made with the first company acquired by Google?
Patrick: We were very fortunate that in the world of startups, we never hit a landmine that really hurt us.
One of the biggest challenges that occurred was financial stress. The world was upside down financially. We built a great revenue client base, but the payments started to come slower, companies were going bankrupt, and we, as a startup, were trying to figure out our way through this financial challenge.
It was a great learning curve, but the pressure was tremendously high on a company with payroll, employees, and headcount. We were fortunate to navigate through that without hitting a fundamental mistake.
One mistake, in a good way, was that we didn’t realize how big the company was going to become within the Google infrastructure at YouTube. That blew our minds. Once we were acquired, the impact went from $22M to billions. That was the wildest thing of not knowing what you’ll be going to create as a value once integrated, which is very difficult at times, getting into those big systems.
What’s the difference between the two companies in terms of M&A?
Patrick: Facebook vs. Google in the M&A is different.
Google is very pro-entrepreneurial in its experience. They were very giving, in a lean startup way.
Facebook was very challenging. It was a very heated, difficult negotiation.
On the flip side, when we got acquired by Google, it was challenging to get integrated because that’s what you want to achieve. We learned at Google that only 33% of startups that are acquired get integrated successfully.
At Facebook, it was way smoother. We learned so much about integration, and we knew the processes. We were not shy, knowing to whom we needed to talk and get the job done.
Two different experiences.
How was it being an entrepreneur in residence?
Patrick: At Google, I stayed a little under three years, and I was very much involved in integrating the company that was acquired, RightsFlow, and getting us on the success path.
At Facebook, we negotiated a short-term employment agreement with no intention of staying longer than six months. I finally stayed around one year without contributing as much to that acquisition.
Isn’t this a painful experience to stay in a company you sold?
That’s a great question, Cristina. You go from running a hundred eighteen miles an hour to all of a sudden you’re no longer as involved because these companies have the infrastructure, systems, redundancy, and verticals that take over the workload.
In a way, you find yourself alone as the CEO of that time. If you do your job right or in any role, you eventually become replaceable. I became replaceable twice.
When I did my exit interview at Google, we were setting up a business team to help entrepreneurs onboard to Google, so they get more mentoring and coaching around the experiences of getting integrated into a big company.
This is a challenge for many entrepreneurs and CEOs that get acquired. They are no longer multifaceted people doing business development, legal, marketing, and other duties. All these things they no longer have to do or think about.
It was a lonely experience, more at Facebook because I knew I was not staying there. You’re going to a job you know you’re not going to be a part of any of the teams in a long term.
The full interview and content are available only in audio or video form.
Cristina Imre – The Founder Coach That Takes Your Success to Heart!