FullContact Continues Its Journey To Solve The Contact Management Problem

When we invested in FullContact in 2012, they were a small team with a big vision to create One Address Book To Rule Them All. Over the past four years, they’ve systematically executed on their vision, building a contact management platform that touches all aspects of the problem. Along the way they built a sizable business.

Two weeks ago FullContact raised a $25 million round. They followed this up with two acquisitions – first Conspire and then Profoundis.

I love using a targeted acquisition approach in conjunction with a business that has a clear strategy and strong organic growth. My first company (Feld Technologies) was acquired by a company doing a rollup (AmeriData – acquired 40 companies between 1992 and 1996 when it was then acquired by GE Capital.) I learned a lot from that experience and then proceeded to try to use the rollup strategy with several other companies, including Interliant, my biggest failure of all time.

By 2002 I realized that what was classically called a rollup strategy was not generally effective, at least not for me. But by reflecting on which particular acquisitions worked, why they worked, and when they worked, along with understanding the opposite (what failed, why, and when they failed) I started to develop a clear view around a targeted acquisition strategy.

Today, I’ve got a clear view of how this can work. I’ve learned a lot from my partner Seth and his own experiences around M&A. While a few acquisitions don’t work out, with the right strategy, approach, and clarity on what success is, it can be a very powerful approach.

At the essence of the approach is a focus on two things – acquiring people and product. The classically rollup strategy was much more focused on acquiring revenue. In my world, historical revenue is the least interesting thing to consider in an acquisition strategy. The goal is to acquire technology that is on your product roadmap or people that fit culturally within your organization and help you execute on your roadmap faster. The phrase acquihire emerged from this, but many acquihire’s, especially by large companies, are not particularly well thought out or integrated into an existing roadmap.

Ultimately, the goal is to use acquisitions to compress time on product development and get people on the team, especially in senior roles, who can help build out areas of the company they have experience in. Interestingly, many technology assets don’t need a lot of people. At the same time, many people are interested in working on things other than the technology they’ve been focused on.

In FullContact’s case, the team, led by Bart Lorang, has figured out their own strategy around this and is executing well on it. In the absence of any of the acquisitions they’ve done, FullContact has a strong business. But our acquisitions of Cobook, nGame, Brewster, and now Conspire and Profoundis has accelerated our business in powerful ways.

Also published on Medium.

  • Sam

    “Many acquihire’s, especially by large companies, are not particularly well thought out or integrated into an existing roadmap.”

    A revealing question in deciding how to integrate the acquired team is, “do we integrate them right away, or do we let them operate standalone for a while?” The best integration successes I have seen have involved integrating right away. Standalone delays your ability to get the synergy that drove you to acquire in the first place.

    And if you find yourself favoring a standalone integration model as you get further into diligence, that’s probably a red flag that either the people don’t fit your organization culturally, or that the product might not be as compatible with your roadmap as you’d hoped it would when you began the process. Tough to walk away when you’ve invested the time and money in diligence and then find yourself in that boat, but it’s usually the right call.

  • Peter J.

    The first time i see a popular blog carrying a video report in a completely unrelated language (Malayalam, from the south Indian state of Kerala). First exit for a startup from over there, iirc. The synergies appear outstanding.

  • Shiva Venkatraman

    I was part of the venture integration team at large firms. people and culture integration were the hardest. Sometimes I feel its best to leave the acquired firm as a full functional subsidiary and slowly take them in – just a personal point of view after seeing many integrations fail due to lack of cultural fit. similar things apply in partnerships too. the key is that these conversations are iterative. you have one convo, understand, then that causes a delay effect on both sides and imho it takes about 5-6 months for the acquirer and acquiree to understand each other.