ZeroDash1 was acquired by Ascentium March 1. How did the deal happen?
The genesis of ZeroDash1 came about last May when a few of us realized that measuring the effectiveness of digital marketing campaigns was an area of tremendous potential. We quickly formed a talented team, and launched with a big party at Hotel 1000 in September. The event attracted more than 400 people as the Northwest Internet Advertising Group (NWIAG) co-sponsored the launch.
Yet, building credibility from scratch was no easy task, and while ZeroDash1 created good buzz, finding paying customers was another matter. Regardless, we focused on building brand. Our people, in particular Anil Batra, went on the speaking circuit. As a result, ZeroDash1 even made it on Forrester’s report, “Where to get help with Web Analytics”.
By December, we realized that the fragmented nature of the Web Analytics sector gave a unique window of opportunity to some company to develop market dominance. However, ZeroDash1 didn’t have the capital and reach to do this without joining forces with a larger firm.
By January, we had a serious suitor from the Bay area. We had gone through weeks of due diligence when Ascentium contacted us. The two potential deals took their course until all parties involved realized that Ascentium was the better match.
Many people wonder how to go about selling a service company. Here are some of my takeaways:
- You have to have an attractive business plan. We focused on talented people in a highly desirable, up-and-coming field. We had picked the right business.
- With a service company, you must have a stellar reputation. Build brand and not just resumes. We continued to do this even when cash became tight.
- Must be able to articulate your value from the potential acquirer’s perspective. It matters little what you think of your value.
- Be reasonable in determining valuation. It has to be a win-win.
- Be open as possible from the beginning. Eventually, all truths will come out anyway.
- Keep liabilities to a minimum. No complex corporate structure.
- Don’t want it TOO much, but want it bad enough.
- Negotiate for the team, not just the shareholders.
- Realize luck is involved. Be humble.
Looking ahead, I’m very excited about what ZeroDash1 can do as part of Ascentium. It truly seems to be a tremendous match. And the web analytics space still remains fragmented, and ready for some market leaders to emerge. Our vision remains to become one of those leaders.