I once killed a $125M deal by being “too honest” • Hacker News Board

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

#111

Post by ksec » Tue, Oct 19, 2021, 7:24 PM UTC

rexreed wrote: post #87

FinanceAnon wrote: post #8

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 Edit: found the link for those interested https://news.ycombinator.com/item?id=28826437

Yup I was about to post, it's the same guy. You'd think he'd learn his lesson about keeping his mouth shut. Not speaking sometimes is as strategic as speaking. Not sure what impact he wants these tweet threads to have, but if all you know from him are those tweet threads, it doesn't paint a very positive light. I'd like to replace TL;DR with TT;DR: Tweet Thread, Didn't Read.

Exactly. It is basic Business 101 with Yahoo. It wasn't about "too honest". ( What a nice way he is trying to spin it ). But that is Ok. We were all once young, naive and vigorous.

But that was the Yahoo era. He then repeat the same mistake with Steve? And Apple has a history of not paying much for M&A. It was really well known even in 2008. And $300M for P.A Semi was considered a very big deal back then.

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

#112

Post by khazhoux » Tue, Oct 19, 2021, 7:38 PM UTC

prewett wrote: post #107

khazhoux wrote: post #97

Earlier quoted context omitted.

Ha, I noticed this part in the twitter thread: > Yahoo offered $125 million > As a financially-insecure immigrant, I knew this deal would change my life. I enjoyed how he specifically qualified that this was a lot of money for a "financially-insecure immigrant." Um... no. This is a lot of money for 99.999% of human beings on the planet. A good read though.

Another interpretation is "[because] I was a financially-insecure immigrant, I knew this deal would change my life [by clearly achieving the financial security I had been constantly worrying about and seeking to get][and therefore I was nervous that the deal might not happen]". It's not that the amount of money was larger for him than other people, but that having $125m/n founders was so clearly financially secure.

Sure, I suppose it could have meant "Because I had no financial security, I would have agreed to any large amount of money."

Instead, I read it as a rather amusing statement of "Because I struggled financially, I would truly appreciate $125 million dollars." Lol, no -- anyone who isn't born filthy rich, would appreciate that kind of money.

But overall it was a fun story to read. The above just struck me as an unconscious almost-defense, to justify the huge piles of money founders can get in silicon valley.

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

#113

Post by armchairhacker » Tue, Oct 19, 2021, 7:39 PM UTC

Tdlr; he was "too honest" 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.

Were the engineers objectively "better" than yours, or was there still something your company offered that the other did not? If the other company was essentially better, than you're lucky Yahoo didn't realize and you got that deal in the first place.

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

#114

Post by DiggyJohnson » Tue, Oct 19, 2021, 7:42 PM UTC

md8z wrote: post #91

novaleaf wrote: post #84

Earlier quoted context omitted.

I don't think the introspection need be so nuanced. The instinctual "Why are you shit talking yourself? What did you just let slip that I don't know?!?" Is just as valid a red flag.

Or it could just be a drunk person running their mouth and a nervous exec getting spooked. No need to overanalyze every word of conversation to look for red flags.

Well if the speaker is drunk, then its exactly excusable is it? Seems like I would rather take the parent comments point than wave it away as poor communication skills on the part of the listener, or intoxication of the speaker.

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

#115

Post by cratermoon » Tue, Oct 19, 2021, 7:52 PM UTC

I admire him for his honesty and not letting greed and ambition get in the way of being a decent person.

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

#116

Post by danw1979 » Tue, Oct 19, 2021, 7:54 PM UTC

FinanceAnon wrote: post #8

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 Edit: found the link for those interested https://news.ycombinator.com/item?id=28826437

Exactly ! Now carving out a new career talking a lot about how he got in trouble by talking too much.

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

#117

Post by coldacid » Tue, Oct 19, 2021, 8:19 PM UTC

awb wrote: post #60

coldacid wrote: post #27

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!

*6 months > The lessons proved helpful 6 months later when Microsoft offered $265M for LinkExchange.

Oops! Could swear that I typed "six". At least "months" was properly plural.

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

#118

Post by awb » Tue, Oct 19, 2021, 8:28 PM UTC

refurb wrote: post #89

FinanceAnon wrote: post #8

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 Edit: found the link for those interested https://news.ycombinator.com/item?id=28826437

I’m not sure he bombed the Steve Jobs discussion. Throwing out a higher number you believe in is not destroying the deal, that’s just Jobs being a dick. His “i can’t trust you” is pure bullshit and nothing but a negotiating tactic. Now a better approach would be to ignore Steve and negotiate with the deal team (and let them argue with Steve). But the outcome could have been the exact same.

> Throwing out a higher number you believe in is not destroying the deal, that’s just Jobs being a dick.

From the thread the difference was when he followed up his "I think we're worth $150M" with a corrected "I know we're worth $150M".

Jobs probably balked at the "I know" part because he knew Apple was one of less than 5 companies that had tons of extra cash in a financial crisis (2008) and had the strategic alignment to make the acquisition.

Plus Jobs undoubtedly already had internal estimates for cloning the company.

I don't think Jobs was being a dick, I think Jobs was just defining a strong negotiating point by telling this young entrepreneur that he sets the market price for acquisitions, not the startup. Sometimes aggression is a good negotiating tactic.

They apparently continued to negotiate after that, so it wasn't like it killed the deal.

Thinking you're worth 3x what your investors and your target acquirer thinks you're worth is what kills the deal.

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

#119

Post by joemazerino » Tue, Oct 19, 2021, 8:46 PM UTC

FinanceAnon wrote: post #8

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 Edit: found the link for those interested https://news.ycombinator.com/item?id=28826437

The elephant in the room of this thread is that Steve was a Goliath of negotiation. He had his own reality distortion field and he should, and was, considered an aggressive player. You don't overplay your hands to aggressive bigshots like Steve.

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

#120

Post by saeranv » Tue, Oct 19, 2021, 9:15 PM UTC

FinanceAnon wrote: post #8

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 Edit: found the link for those interested https://news.ycombinator.com/item?id=28826437

Just to be clear, he was also offered $285 million 6 months later from Microsoft, so whatever he's doing seems to have worked out pretty well for him.

Perhaps his tolerance, and aptitude for risk-taking, which seems crazy to us (talking carelessly right before deal has been formalized) is also what lead him to success in the first place.