Acquired - Season 2, Episode 10: The Rover-DogVacay Merger (with Rover CEO Aaron Easterly)

Episode Date: June 18, 2018

Acquired wraps up Season 2 with our first “elusive” private-private merger: Rover.com and its 2017 combination with rival pet care marketplace DogVacay. We’re joined by Rover CEO Aaron Easterly to dive into the full history of how the crazy idea of “Airbnb for dogs” not only became a billion-dollar company, but also brought our heroes together for the first time and led to the founding of Acquired!Sponsors:ServiceNow: https://bit.ly/acqsnaiagentsHuntress: https://bit.ly/acqhuntressVanta: https://bit.ly/acquiredvantaMore Acquired!:Get email updates with hints on next episode and follow-ups from recent episodesJoin the SlackSubscribe to ACQ2Merch Store!Links: The original Rover pitch from Startup Weekend

You know, and I've experienced dogs eating stuff that they shouldn't eat, dogs jumping over fences you didn't think it would be possible for them to jump over. Welcome to Season 2, Episode 9 of Acquired, the podcast about technology acquisitions and IPOs. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. Today, we are talking about a very important company. Without this company existing, there would be no Acquired, and it's likely that David

and I never would have met. Today's episode is about Rover.com and their merger with Dog Vacay to consolidate the grand rivals of the dog-sitting wars. And we're super fortunate to have with us today the founder and CEO of Rover.com, Aaron Easterly. Well, thanks for having me. Glad to be here. Yeah, we're super pumped. So Aaron, this is the part where we introduce the guest, and I was going to do it from memory, but I wanted to make sure that I nailed the details.

So I tried to find a bio for you online, which is harder than most folks. You're not exactly a bio person. I spent exactly zero minutes managing my reputation. As will become clear throughout the show. Well, the one I did manage to find is from Crunchbase and lists you as Rover's top dog. So Rover's big on puns, and we'll revisit that many times throughout the episode. But listeners, to give you a sense of Aaron's background, he was an entrepreneur in residence at Madrona Venture Group sort of during the genesis and formation of Rover and as a key part of that. And Aaron was, before that, the general manager of network strategy and monetization within Microsoft's

advertiser publisher solutions group. Now, Aaron, there are many rumors circulating that you were the youngest GM ever in the history of Microsoft at age 29. Can you confirm? Actually, I can't. I don't know if that's true or not. I was a very young GM for Microsoft at the time. And there's no one that's younger than I'm aware of, but I don't know if that's true. And Aaron, of course, came into Microsoft through the acquisition of a Quantive Avenue A Atlas, and it was a huge ad tech acquisition of that era. So to start the show... You forgot the most important thing, though.

Oh, that is true. Which is that through your whole life, Aaron has been a lover of dogs. Pomeranians. One dog in particular, more than anything else. Yeah, I love all animals, but I'm very partial to dogs. Pomeranians. One dog in particular more than anything else. Yeah, I love all animals, but I'm very partial to dogs. And I was owned for 14 years by a four-pound fluff ball named Caramel. And we are sitting here in the Rover office in Caramel's den, named for Caramel, with a portrait of Caramel up above Aaron on the wall here. Very sweet.

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to servicenow.com slash AI dash agents. All right, David, all the hard stuff is out of the way. Now for the fun stuff. Yeah. It's really fun to have Aaron with us because, um, not only is Aaron a great friend of all of ours, um, and we've spent lots of time together, but literally this story is the story of, um, you know, why we're all here today has been said, I don't think we would have met without it. Certainly there would be no wave, no PSL, none of it. It all comes from the top dog. So thanks Aaron. Yeah. To set the stage on the Rover origin story, and Aaron will come in here throughout, but there are really three pieces that I want to dive into. And so first setting the background, let's go back to summer 2011 here in Seattle. It's summertime in

Seattle, which is the best time in Seattle. We're just entering into it again here now. There's a company based here, high growth, high flying company, goes by the name of Amazon, which we've covered on this show before. And the stock price is at astronomical heights. All time high. All time high, $200 a share. And people are wondering, can this go on? Can this hype continue? Things are going so well. The company, which had heretofore had just one office,

had an old hospital building up on Beacon Hill. They've actually purchased from Paul Allen and started constructing a brand new campus in South Lake Union. Wait, in 2011, Amazon was still in PacMed? Yep. My God, how fast things change. Amazon is still on PacMed? Yep. Beginning of 2011, Amazon is still on Beacon Hill.

Wow. And listeners, there's a crazy story about that building. There's a little dovetail, but that was a hospital that Amazon converted into their first large major office before effectively colonizing all of downtown Seattle now. And it is now back to a hospital. Totally crazy. But people are

wondering, you know, what's going on? They're starting to construct these new buildings. They've just constructed their new headquarters in South Lake Union here in Seattle. We're going to come back to that. And as part of that, sort of the tech and venture funding thaw after the financial crisis is starting to thaw. Optimism is returning to the tech world and to Seattle. And there's this other interesting thing happening in the world right now, which is this concept called the sharing economy is taking off. For me personally, I had just moved to Seattle the fall before in September of 2010

to take a job at Madrona. And I had for the first time stayed in an Airbnb in September of 2010. And I knew about it because my then girlfriend, now wife, Jenny, her best friend had just started dating one of the early employees at Airbnb, now my partner Riley at Wave. And so I heard about Airbnb is where I stayed when I moved here to Seattle. So this is all percolating. They'd raised a seed round from Sequoia. And at the same time here in Seattle, there is an organization called Startup Weekend. And Startup Weekend was really cool. Ben, you were part of it in the early days, right? Yeah, still is very cool. It's an organization that started as a nonprofit and is now part of

Techstars that basically gets a bunch of people in a room, most of them having never been involved in startups before, certainly having never founded them before. And it's people pitching ideas and trying to create companies in 48 hours. So you bring together designers, developers, business people, because we never had a better name for business people than business people. And you basically try and come up with a pitchable concept that has evidence of traction or belief it will succeed by the Sunday night. And chief among the useless business people is our partner at Madrona, Greg Gottesman. Now, of course, Greg was also on the board

of Startup Weekend, was instrumental in building out that organization, but also happened to be an idea person. An idea person for sure. And so all of us, the weekend of June 10th here in Seattle, we decamp to Amazon's new campus here in South Lake Union for a startup weekend hosted by Amazon. Greg and I are participating. Aaron, I can't remember, were you there?

You showed up at one point during the weekend, didn't you? No, I actually got a call from Greg during the weekend, but I actually didn't show up during the weekend. My girlfriend at the time was there, but I wasn't. We did a phone a friend to Aaron. The way Startup Weekends work is that on Friday night, anybody who attends can pitch an idea. And so, of course, all the useless business people pitch ideas. And I remember Greg about to go up on stage to pitch his ideas,

and he's debating between two ideas. I don't remember what the second one was. I was trying to find it. There's another $970 million company lurking in that second idea. Maybe even bigger. What could have been? What could have been? But one of the ideas is Airbnb for dogs. And he asked me, which one do you think we should do? And I said, well, I think there's actually something to this Airbnb thing. I mean, my buddy down there is working there. They're doing pretty well. I stayed there's actually something to this Airbnb thing. I mean, my buddy down there

is working there. They're doing pretty well. I stayed at one. It's really cool. He says, okay, we'll do Airbnb for dogs. Wow. David, you should be a venture investor. And Airbnb for dogs, it was. Greg pitches the idea, recruits a team, led by all-star developer and, in his own words, quote- quote unquote, studly college student. The one and only Phil Kimme. Home for the summer, who was participating in the startup weekend. I believe the direction from Greg during the weekend to Phil heading the development team

was go to Airbnb.com, clone everything on the site, and replace it with dogs. It should be noted that after the startup weekend, we ended up throwing out everything that was built because it was completely shoddy. But Phil ended up rebuilding it, as we shall see. The company, called A Place for Rover, ends up winning startup weekend. It was a little stacked because the judging panel on the judging panel was Matt McElwain, one of our other partners at Madrona. But that aside, Rover ends up winning the startup weekend. Monday comes around. We're in the Monday meeting at Madrona. And Aaron, of course, is an entrepreneur in residence with us at the time at Madrona.

We're discussing the weekend and how things went. And everybody's pretty excited about this idea. So excited that we call up Phil, Phil Kimme, the studly college student who had built things over the weekend and say, hey, can you come on down? And we want to talk about this a little more and maybe turning this into a real company. God bless everybody at Madrona who had the confidence in all of us to do this crazy idea because this was before we were a venture firm. Venture firms didn't start companies. And with all of us there, we started going on that Monday, June 13th. So Aaron, as we mentioned, was an entrepreneur in

residence with us at Madrona. And you were working on some new marketplace ideas, right? Because you had been obviously a marketplace expert being at Aquantive and then at Microsoft. I was trying to remember, what were you working on? It was like a local commerce idea, right? Well, there's a couple of different marketplace ideas I had around advertising and small businesses as well, but mostly on customer acquisition schemes and marketing things for those types of companies. Of which I should add, I was totally not excited about. I love the digital advertising world. I found it fascinating. The economists in me had a lot of fun with building some of the early online marketplaces. But after being in it for over a decade, I was having a really tough time getting passionate about throwing myself into another digital marketing startup.

Am I remembering right? Was there something about people in your family had worked in local businesses and had trouble with customer acquisition that you were going to support them with? Oh, that problem. My parents had actually decided to open a pizza and wine bar at the time. That's it, yes. In California, right? In California. And the challenges of people who open businesses like that, actually being able to devote cycles to doing marketing effectively, it's a big problem. They're typically working in the business, not on the business. They don't spend a lot of time thinking around how to make that efficient.

So that Monday meeting happens, and you guys are kind of discussing, hey, this thing happened over the weekend at Startup Weekend. We couldn't get Aaron to come in despite the fact that he's this world class marketplace expert and economist. He wouldn't drag himself over to South Lake Union, but here we are Monday and we're all looking at each other going, we think we should do this. What does the process look like from there? So Greg dragged me to meet with some of the engineers that were on the team over the weekend, that he wanted some help evaluating whether or not he should invite them on to kick off a prototype program. And so day one, I was happy to advise and consult on the project. nut and that I had experienced this problem myself for the better part of 12 years being a single busy business executive with a dog I absolutely adored but would not take with me

on business trips. So it's a problem that I had like all the time in my personal life and over a little four pound fluff ball. Because of course at at the time, if you before Rover and dog vacay, which we will get into in a minute, if you were going on a trip and you were a loving dog owner, you instead of keeping your dog in this lovely home where he or she lived, it would go to a kennel and be in a cage and locked up. And it was really not a great experience. Well, that was actually the debate between Greg and I on basically day one. So Greg, as having been someone who had used a kennel, he had an experience with kennels where it was overpriced. His dog had gotten mauled. He felt like he had been nickel and dimed.

And the debate was, well, that's all good, Greg,, I adore my dog. I know lots of dog owners. I'm not sure I know anyone other than you that has ever used a kennel. And so the big debate was, was more the population of dog owners like Greg Gottesman, well, of course, I'm going to go to a high-end kennel, or more like Aaron Easterly, I'm going to go down the Rolodex of friends, family, neighbors to find someone I can pawn my dog off on. There are two, in my mind, two super, super key insights that Aaron brought to the business when he finally relented and we convinced him to become the CEO about a month later. And one was that dogs are family now.

And this was a behavioral change that had happened over the last five to 10 years at that point where dogs went from being pets to being, you know, almost at the level of children. Aaron, of course, could speak from experience on that. But part two, and operationally, I think this was such an important insight into Rover and what has made it successful, is that people were already doing this. Exactly like you said, Aaron, many people were not using kennels. They were leveraging friends and family close to them. And so this was not a new concept of behavior change that we had to do with consumers.

We just had to bring it online into a better experience and a closed-loop marketplace. This begs the question, you're starting an early-stage venture. One slide in your pitch deck is market size. How do you figure out the market size of something that's currently not being monetized? Poorly is the honest answer. So we initially looked at third party estimates of market size. And the answer there, depending on what you looked at, you could kind of get to three and a half in some sources, maybe six to eight billion in other sources. So it's not small. Put that in perspective.

You know, that's about the size of the entire non-search digital advertising industry in the U.S. circa 2008. I think we had six billion in the pitch deck. Yeah. And does that include kennels or is that outside? It's kennels and private professionals for the most part. But that was what the industry stats were based on, those segments. And so the dilemma was how do you figure out how big the friends, family, neighbor segment is given that these are oftentimes what we call shadow market transactions. They're people with needs.

They have someone meet those needs. More often than not, there actually is a value exchange. A bottle of wine. Yeah, a bottle of wine. Take your friends to dinner. Quid pro quo. I'll get you next time you need something. So there is a value exchange, but it doesn't get reported in any industry stats, and it may or may not be monetary in nature, a tough challenge. And one that we didn't even attempt to solve in the initial Series A pitch. We put in the commercial market and just said, and there's some gravy on top in this shadow market segment, which looking back was just really dumb because as we found out a couple months later, that gravy on top is actually 10 times the size of the commercial market.

So it wasn't so much gravy, it was the entire cake. Well, and this is so fun because once Aaron joined, we were convinced there was a big opportunity here. If one of the world's marketplace experts saw the opportunity, we should probably continue to fund this at Madrona. So we were willing to fund this, but we thought there's one person in the world who we should go talk to as well. And maybe we would let them into the round. And that would be someone we've also talked about on this show, Greg McAdoo at Sequoia, because he had just done the Airbnb investment. And so we send Aaron packing down to the valley to go pitch Greg. Greg says, you know, yeah, that's all well and good. And, you know, Airbnb is doing great, but like,

it's such a bigger market. Like, look at this market size. Like this isn't big enough. And of course, it's hilarious because now Greg is, of course, a good friend and advisor to us at Wave. And he very much regrets passing on the opportunity. But to your point, the market size that was relevant was not the existing market size. I'm glad you guys thought, by the way, that the fact I was taking the job as an indicator of the market size, I can tell you my personal thought process was quite a bit different than that. But I'm glad that that's what you guys believe.

Aaron, was your thought process, wow, these guys are willing to fund this. There must be something here. You know, for me, life in general is about having fun, challenging experiences that actually have a unique impact where you're contributing something that's different than what other people could contribute. You're not just a cog. So for me, the thought process was, this is an opportunity that I think exists, have no clue how big it is, but it exists at some level. There is a chunk of this I think I can help out a lot with,

the deep analytics, the marketplace expertise. I love dogs. And there's a bunch of this consumer side that I don't have a lot of experience with. I've done most of my marketplace stuff in B2B marketplaces, like search and ad exchanges and things like that. And so I was like, God, there's just half of this business I'm going to fall on my face daily. And so for me, like, hey, I'm sure I can add value in some areas and I have no clue what I'm doing in other areas. Plus, I think it's a big enough opportunity to be interesting to throw myself into, was basically the extent of the thought process.

It's a good thing you didn't tell us that at the time. No, it's just... It totally is. Well, you know, every startup has to go on a little bit of faith. Okay, so before we dig into the dog vacay side of things, and before we start talking about progression from here and the company's growing, we've got some fun stories that we want to dig into. So one is the company was originally A Place for Rover and it was aplaceforrover.com. How long did that last? Actually, about seven years now. Our legal name is still A Place for Rover.

So anytime we file a document, file taxes, file a Delaware, we're still a place for Rover. Doing business as Rover or Rover.com, but we're still a place for Rover. And I think at the time it was Greg's play on a place for mom, which was a mechanism to find care for elderly parents typically. Also a Seattle company. And also had a domain name that was available. So Place for Rover was an available domain name. Purchased during the startup weekend, actually. Purchased during the startup weekend. And so I think it was as simple as that. Domain name available, had a little bit of prior art in terms of being used for certain types of care marketplaces.

But Rover at the time was not available. And so we had mentioned this a little bit on our last episode in talking about the T-Mobile Sprint merger. Aaron, we'd love to hear the story from you. How did you end up with Rover.com? You know, this is just one of those cases where connections matter. So some research was done to figure out who actually owned the rover.com domain name. And it turned out it was Clearwire. Clearwire had acquired it

because it was rolling out a mobile internet puck for wireless internet. One of the first mobile Wi-Fi hotspots. And they'd actually canceled the product. And canceled the product and also may have run into trademark issues with regards to a French company that had a similar offering named like Rovere or something like that. So some combination of Clearwire not being able to invest in a new brand slash some long-term concerns around trademark, is my understanding, were doing nothing with it, had basically decided to put it on the shelf. And as it so happened, one of the other managing directors at Madrona at the time sat on the Clearwire board. Your former boss.

Former boss from Aquantum. When he found that out, he shepherded a conversation around, hey, so you're not using this domain name. You want to give it to us? And the answer was, no, but since we're not using it, how about we're willing to lease it to you guys for a little while? So we initially leased it for like next to nothing and then bought it pretty cheaply, actually, compared to what five-letter domain names with some level of actually brand equity already go for. We got super cheap. Near palindrome, you know. You know, just in the US at least is this thing that means dog. And we're talking about a service

that actually makes it easy to move your dog around when you're traveling. So helping your dog run around. So it was perfect and cheap and serendipitous. One other real quick fun story is that for the rest of the summer, as we were building the MVP based in the Madrona offices, the old Madrona offices at the time, the first dog stay happened in the actual live dog stay happened in the madrona office and of course the dog decided to use the bathroom on the floor in the madrona office and our awesome truly truly awesome uh and lovely cfo uh and general counsel at madrona troy chickus basically i don't think

i've ever seen him more enraged than at that moment. And he was so skeptical of Rover for years after that. But hopefully, everything's dusted over. Oh, it was about a week after that, too, where Troy came to me and said, you know, it's about time you guys find your own place. So we got the boot soon thereafter, which was time. We did have our own funding and we could get our own place. But I'm pretty sure the timing of that was driven by the dog with the explosive bowels. Yeah, or at least operate a marketplace instead of you yourself sitting the dogs.

Which at the time, a lot of us actually engaged in dog care as well on both sides of the marketplace to try and get a sense for what worked and what didn't work. You know, I was an active sitter for the first several years. I think I still have over 100 reviews on the site. So probably book close to 1000 nights of care just as myself as a sitter, you know, experienced a lot of awkward situations. In the early days, a lot of us were doing that to get a sense of what worked and what didn't work for the thing that was inherently somewhat awkward in the early days. I mean, one might call it eating one's own dog food.

Okay, moving on. Before, real quick, before transitioning to dog vacay, it's worth mentioning to listeners, we've touched on sort of how David and I know each other, but Rover is really to thank for many, many things that have happened in David and my life since meeting. to be a startup studio inside of a venture firm was really the reason why we justified, hey, we think there's a chance we could do this is because of Aaron and Rover. Because Greg was able to point to that and say, look, we did it in this super ad hoc way. What if we systematize the process? And so I left Microsoft and went to Madrona and met David. And of course, that's the exact same thesis that we have now at sort of this broader scale

and outside of a single firm with PSL. And David, obviously instrumental for your marketplace thesis too. Absolutely. I mean, at Wave, it's a combination of both of the aspects of Rover of starting companies and investing in companies at the very beginning before there's a product, as we just talked about, can work and then also in the disruptive power of marketplace businesses. Thanks, Aaron. Thanks. You're welcome.

Glad I didn't screw it up and perpetually ruin your guys' careers. Happy with that? Yes. So speaking of dad jokes, essentially, at the same time, not quite the same time, but slightly after this is all going on, and we made no secrets about what we were doing up here in Seattle. And in fact, much of the tech press pilloried us,

called this a second sign of the tech apocalypse, pets.com take two. But as Jeff Bezos says, well, the Washington Post is willing to put body parts through the wringer. But if you're not doing something that people make fun of, you're probably not doing something interesting. You know, I think we made a list of the top five worst ideas that our VC funded in that year. Ah, yeah. It was fun for us to get. And, you know, the funny thing about the same time that people are like, I can't believe this is a thing. This is embarrassing.

Why would anyone ever invest money? At the same time that was going on, the next three or so startup weekends, the idea that was pitched and won was the same damn idea. Well, that's what the copycats started popping up. So people pitched literally the same Airbnb for dogs again? Literally pitched the exact same idea. And the people who run the Startup Weekend event were like, hey, guys, this one last week or one last two weeks. And the judges are like, I don't care. It's cool.

I like it. And because in every town, there's a different set of judges that are local and weren't in the last one. So it was new to them. And so we went from kind of, oh, my God, this is almost laughably bad idea to at the same time having like 10 companies announce that they were going to do it. So it's kind of like the worst of all worlds where you have now like 10 potential competitors for an idea that everyone thinks is awful. Seems like there may be something to it then. Human psychology is so fascinating. So among the competitors that pop up, the most credible by far is a company based in Los Angeles called Dog Vacay. And Dog Vacay was started in the

fall of 2012 as part of the incubator down there, the well-known incubator science started by Mike Jones, formerly of MySpace and Peter Pham. And it was started by Aaron Hirshhorn and his wife, Corrine, and they were dog owners. And Aaron had been a confusing, was confusing for many, many years. We have Aaron E up here in Seattle and Aaron H down in Los Angeles. But Aaron H had been a consultant for many years and had actually worked at a venture fund. He was among the minority of people who realized that this was not a bad idea, but actually a great idea. So they started the company. And then in the spring of 2012, they raise a seed round, uh, led by first round capital, uh, and Jeff Jordan

from Andreessen Horowitz from then that point on really the race was on. And it was later that year that Bill Gurley at benchmark wouldmark would lead their Series A, and he correctly identified the massive marketplace opportunity here. And Bill had already was famous for many marketplace investments, including the Series A of Uber. And he wrote a canonical blog post called Not All Marketplaces Are Created Equal. He put forth his framework for evaluating marketplaces and then wrote a sidecar, essentially investment memo that he published for Dog Vacay about all the marketplace dynamics and why this made for such a great investment. And he was completely correct. Yeah. And Bill's set of posts on this are biblical for listeners that are thinking about

a marketplace business. And in fact, David and I were talking about a concept yesterday where we're like, we should probably put it through Bill's framework. Like this is sort of the way to think about marketplace businesses. And I, in doing research for this episode, just found out it was modeled after the dog vacay investment. Yeah. And so that happened. And then right around the same time, we raised the technically series B since Madrona had done the A, but effectively the same amount of money from Brad Feld at Foundry Group here at Rover. So I'm curious, we on the Madrona Inventor side had lots of thoughts as all of this was happening. But how did you feel, Aaron, when these competitive financings were happening? You know, I think all this stuff matters a lot more to VCs than it does to me. You know, at the time, there was a lot of marketplace orthodoxy around every marketplace is winner

takes all. And every marketplace is first to scale wins. And you have to be super aggressive because no one can ever come back from being a little bit behind. And so if you believe this, and if you spend a lot of time being a VC and you care a lot about other VCs track records and who are the big names, you care about this stuff. If you don't, you don't. And I probably fell in the category of not caring. Now, eventually I did care when it affected whether or not other people were willing

to give us money and had to figure out how to speak to it. But it's definitely one of those things where Greg and others at Madrona, you know, were a lot more intrigued and concerned around who might be investing in dog vacay than I was. It's one of these classic things too, the operator mentality that makes people so good is being able to shut out a lot of the noise and a lot of the things other than put your head down and focus on the business because you're probably going to make missteps and kill yourself

long before your competitors will kill you. Obviously not the case here. Both companies pushed on and were successful for a long time. So I'm just going to refrain from all the tail chasing analogies. And basically, listeners, what happens is that was the end of 2012. From the end of 2012 until the merger happens in the beginning of 2017, Rover and Dog Vacay are in lockstep in terms of growth, in terms of fundraising, at least to the outside and VC perspective worlds. But underneath the covers, we were doing a lot of really interesting things at Rover. And I'm curious to your perspective, what were the things that we decided to invest in that helped us in the long run?

Ultimately, you know, we thought that this business was going to come down to marketplace mechanics and how you make use of data. One of the things that a lot of people believe about marketplaces is that they can have great economies of scale. But sometimes people forget to ask the question of where those economies of scale are coming from and whether they happen naturally or they actually have to be earned. And so there are certain cases like an Uber that the economies of scale can happen naturally. So for example, you just get more drivers on the road relative to the demand. And all of a sudden, your wait time after you hit the button is less. And it happens, for the most part, somewhat naturally. And you can improve and optimize it, but it just happens. Or Airbnb, more people in more cities come on the platform. And

now you can travel to more cities, and it becomes more a part of your life, and you book more, and then that brings more supply. Our view, though, is that most of the economies of scale in this business weren't going to come from just pure scale. It was going to come from the use of data on the back end. That there's a big difference in the performance of sitters. There's a big difference in the desirability of certain sitters. There's a lot of subtle micro differentiation. And so the design, the marketplace mechanics, design, the backend data would matter a lot more than any short-term advantage in scale. And one of the other things that actually gave us conviction around that

was that this business was about the shadow market. It was about the people that were using friends, family, neighbors. Businesses that are free to use think social media can kind of spring up almost overnight. Businesses that have a large existing market where a better version or cheaper version comes along can kind of spring up overnight. But businesses that are mostly about changing fundamental consumer behavior and not the existing commercial market and aren't free to use, those are grinds. You know, they play out over time. Behavior fundamentally changes. There's a limit to kind of how fast you can go in those businesses because you actually have to adopt, consumers have to change their behavior. And something like travel, people on average travel 27 nights a year away from home. So at any point in time,

like very few people actually have a travel related need. So there was an inherent speed limit on this business. So you couldn't just pump a lot of PR, pump a lot of marketing and somehow create an insurmountable lead. Our view is that it is always going to come down more to the back end piece. I remember you talking about and giving me and Riley the advice as we were starting Wave

that these speed bumps at first blush can seem to be negative factors in markets. But if you believe in the ultimate market size enough, they become a competitive moat. This is certainly an outsider's perspective, but what I think was held to be true in the industry was Rover's really, really good at engineering, at data science, at operations, at really aggressive segmentation of their customer base and understanding exactly what drives behavior and narrowing funnel, like being really crisp on your funnel and removing leakiness wherever possible and in the most aggressive ways. Like if there was a dollar that Rover could spend on a brand advertisement versus a way to further decrease a drop-off in a funnel step, it was absolutely going into that funnel step every single time. How do you sort of look at the way that you guys did that

and how it showed up in short term versus long term? You know, so listeners have a little bit of visibility on this. I don't think Rover was, you know, leapt out to a lead in the early days. You correct me if I'm wrong, but I think in that 2012 to 2014, there's a lot of metrics you could look at where it looked like dog vacay was really out in the lead. No doubt about it. Dog vacay got a much faster start, did a much better job with initial PR and marketing and graphic design, had a group of well-known Valley investors, and got out to a fast start. You know, at one time, LA and New York, which are large markets, dog vacay was six times our size in both of those markets. When we ended up doing a deal with dog vacay, we were materially larger in both of those markets than they were. So it kind of came back

from a six to one deficit to be a clear leader in those markets. But we got our butt kicked in the early days. It's just interesting to hear stories like that and try and draw inspiration for future times when you're getting your butt kicked. Well, it was an interesting conversation because going back to the tuning out noise thing, love Greg. Greg is super helpful about the company. But probably multiple times a week, I'd get calls around how frustrating he found it that he was reading Dog Vacayays PR all the time, and they were in the press all the time, and had all this buzz all the time. And those things work like clearly that in LA, New York is great examples, get a bunch of sitters, you know, get a bunch

of customers. Yeah, and, you know, definitely help get the business off the ground. And I would say, it was also helpful to create an awareness for the category, which had a follow on benefit to Rover. Looking back, you know, ultimately, I wish we had done a little bit more in PR in the early days. It took us a while to make up the ground on SEO, for example, and domain authority. So we could have been a little bit more balanced. I think on the net-net, it was the right overall prioritization, but we could have been more balanced in our approach.

And to put some more specifics on this, for listeners who aren't necessarily experts in marketplaces, for me, this was like an education on the fly in how to manage these things. It ultimately kind of came down to all the dynamics and investment on data science and the backend and funnels and analytics that we did at Rover meant that our conversion rates as new customers, new needs were hitting the marketplace, ended up being much higher over time than our competitors. And then not just the conversion rates, but also most importantly, our repeat booking rates. Because as we were acquiring folks, the lifetime value of those people, because they would

convert at higher rates, but then repeat much more often, just ended up that even though we had a slower ramp, the exponential kink in the curve was that much steeper. And the important thing to note here, as you think about the equation of cost to acquire a customer versus the customer lifetime value, and trying to make that delta as wide as possible or that multiple as wide as possible is they're not a customer until they actually book in a marketplace business. And so the more funnel optimization you can do where you increase the rate of sign up to booking, the more you can spend and the broader you can spend on getting new people in the door.

I don't think they're not actually a customer until they complete the transaction. Yeah, yeah, yeah, yeah. You know, if you think about if you're twice as good at turning someone who hits your site into someone that completes a transaction, then, you know, if you're competing over the same ad words, keywords, you can outspend because you know

that you're gonna be able to more profitably move those customers through your process. Indeed. I think the other thing that cannot be understated, I'm sure Aaron would agree, is a major moment in Rover's history, which was the hiring of Brent Turner in January 2014 as Rover's COO. Yeah. So Aaron, who is Brent and how did that all go down? Brent has been my companion for most of the last 20 years in Seattle.

Brent and I met in the early days or the pre-public days of Avenue A, which later became Aquantive. We've worked together for something like 17 in the last 20 years. There have been times where I've reported to him, times when we've been peers, times when he's reported to me. But the vision of labor was kind of always the same. So it took about three years of effort for me to get Brent to become involved in Rover. I tried to get him as an angel investor in the early days. And I think- Rover's like a war of attrition of people convincing each other to do things.

For a company founded on love of family members. And there are some funny stories with people who, when I left Microsoft, were like, hey, just tell me what you're doing next. Whatever you do, I'll invest in. And then I go to them with Rover, and they're like, accept that. I'm not going to invest in that business.

Including people at the VC world. Very well-known venture firms that you flew down to the Valley to have meetings with were like, oh, actually not, sorry, not that thing. Yeah. I would invest in anything but this or like, so what are you doing with your career? Like this seems like the worst idea ever and you're throwing away your career.

Do you know you're doing that? And so Brent wasn't being someone who I'm also friends with and cares a lot about he wasn't he was more diplomatic than that um but basically he was just like dude I'm not giving you angel dollars for this I'm not sure there's a business here I'm not sure and so like I kept on for a couple years and was kind of like okay well here's how we're doing and each time he's like wow that's bigger opportunity here than I thought. And so eventually convinced him to join Rover. And in a lot of ways, Brent's a co-CEO, but the best manager I've ever met, the best developer of talent I've ever met, the best operator I've ever met, kind of rounding out the diversity of skill sets in

the Rover executive team. And we were having drinks last night with Phil Kimme, who of course is still lead developer for Rover and the studly college student that separate. Oh yeah, we should tell a little of Phil's story. So after staying the summer, then Aaron and Greg lobbied him to not go back to school. Including calling his parents.

Including calling his parents and convincing them, which didn't go over well then and continued to not go over well school. Including calling his parents. Including calling his parents and convincing them, which didn't go over well then and continued to not go over well for years. Well, you know, so Phil, of course, did drop out and as a co-founder of Rover, built the engineering side of the business with a great engineering team into what it is today. And only recently have Phil's parents started to come around on, okay, there's something to it. Well, I think they're both doctors. So, you know, both your parents are doctors,

and you decide, hey, I'm dropping out to go do Doc City. You know, you can imagine why that might be met with a little bit of skepticism. But Phil's point, of course, having been along the ride for all this journey as well, was that just like we were talking about, if you had to choose a dollar to invest in the early days in your backend and data science and analytics for marketplace versus marketing and growth, you should for sure choose the backend every time. However, ultimately, you need to do both. And that it was Brent's coming on board in 2014 that really built the muscle in the company to be able

to do both and be world-class in both. I cannot understate the impact there. All right, listeners, our next sponsor is a new friend of the show, Huntress. Huntress is one of the fastest growing and most loved cybersecurity companies today. It's purpose-built for small to mid-sized businesses and provides enterprise-grade security with the technology, services, and expertise needed to protect you. They offer a revolutionary approach to managed cybersecurity that isn't only about tech, it's about real people providing real defense around the clock. So how does it work? Well, you probably already know this, but it has become pretty trivial for an

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Our huge thanks to Huntress. Well, David, do you want to bring us to kind of the year leading up to the merger? Yes. So as all this was happening, I believe Rover and Dog Vacay raised four rounds of fundraising in lockstep, three or four rounds.

For the most part, our A was kind of their seed. Our B was kind of their A. You know, our A was kind of their seed. Our B was kind of their A. You know, our C was kind of their B. And we were in touch with them during that time. Yep. So all along, there's a little bit of a dance going on. And of course, you know, on their side, on the VC side, which is more what I had exposure to,

Bill Gurley had lived through a very similar dynamic with Grubhub and Seamless in the food delivery space, being two competitors in a market, both private companies, both scaling nicely. You could see a path to being large public companies someday in a difficult manner, but ultimately affecting a merger between the two of them, becoming Grubhub, Seamless, one company before going public, and that really being a great value accretion event for all shareholders. Bill really started lobbying the investor base, first within Dog Vacay, but then on the Rover side, to consider following a similar playbook in this space. And it ended up taking, gosh, it was, I mean, it was over a year, well over a year of lobbying and negotiations before we really entered.

Many years, actually. Many years, yes. We actually, the conversation around putting the companies together actually started in year one. Aaron Hirschholm and I actually had a pretty healthy relationship. And I actually brought this up with him around the time of the A, Series A round, and said, hey, it seems like the companies are onto the same thing. You guys seem to be a lot more competent on the marketing, the PR side. I think we have a lot of advantages on the back end and the analytics and the marketplace side. I think how this is going to play out is you guys are going to get off to a fast start.

Our advantages will matter more over time, and then we'll pass you over time. But do you want to consider putting the companies together now, given that we don't have a lot of overlapping executives, we haven't raised too much money, it'll just get harder over time. So that's the conversation I actually had with Aaron H. in year one. Wow, I didn't realize it was that early. Yes. I don't think Greg was super excited about the idea, but it was year one that I had that conversation. And it generally turned out to be true. I said, hey, you guys are going to raise some money. We're going to raise some money. You're going to raise some money. We're going to raise some money. And that played out. And it also played out that it was more difficult as time went on to have the discussion, more investors at the table,

more decision makers, more overlapping functions, more overlapping execs, it just becomes hard. It really, it really did. And this was a lesson to me, you know, as over the sort of year and a half, almost two years that it was really active leading up to the actual merger of how hard it is to affect these things, particularly with, with private companies. And, uh, I remember my wife, Jenny, and I used to joke that Bill, uh, Bill Gurley had like a knack of just calling it the most inopportune times. And there was one, one time in particular where we were on vacation. We were in, Bill doesn't know this, but we were in Cambridge in England,

and we were going to Evensong at King's College Chapel, which is this amazing, very solemn event. We were in line. They had just opened the doors to the chapel. Hundreds of people are filing in. You have to turn your phone opened the doors to the chapel. Hundreds of people are filing in, you know, you have to turn your phone off when you, when you enter the chapel. And my phone buzzes, I look down and it's like, of course it's Bill Gurley calling. So I said, hold on one minute. But it was, it was hard work getting it done. And which I'm sure you will on the operating side agree with as well.

Aaron, take us through, what did the process look like to everyone look around the table and say, yeah, we're going to do this. And then after that, the integration. There are several overtures made over the years and including people cornering our investors at conferences and saying, you guys should do this. We'd get that over time. And there's a couple times where Aaron and I talked around how we might engage in a process. And, you know, it was tough to get agreement. You know, at a high level, there's a bunch of things that make getting to agreement difficult on these. And the first is that entrepreneurs, by their nature, especially in tech, have to be a little delusional. In order to take on the risk of starting a business that most of the time is

going to lose a lot of money before it ever makes money, the odds are stacked against you, lots of risk, lots of complexity. But for you to decide, you know what, this is a good decision with my life and my career, you just have to be a little delusional. Well, it's news to me, you didn't believe in the market size. Or yeah, a little delusional or doing the job for different reasons, I guess. And so, because of that dynamic, that kind of confidence, faith, commitment, like we can figure this out, we'll get it done. It also can make negotiating terms challenging because entrepreneurs typically have a pretty high faith in themselves and their ability to get it done. And when companies are both private, there's no stock market that's a third-party validation you can point to for relative value and share price. Totally. Yeah. Stock market would be like, okay, here are stock. Here's what the market's thinking.

You can debate around the edges a little bit, but most of the time it's relative to that. With private companies, you don't have it. Most of the time, they're not making money at the time, so you can't look at profit multiples. So you got to look at some combination of revenue, unit economics, relative growth rates. Not to mention, more important on the investor side, but also equally relevant on the entrepreneur side, there are two preference stacks for each of these separate companies in terms of the money that each has raised. And it's challenging to figure out how to combine those. Yeah. And for folks listening who aren't familiar with preference stacks, basically,

when an investor comes in and does the most recent round, they have the preference in case that it's basically downside protection. If the company ends up selling for less or in a downside, they're the first to get their money back. And that continues in a waterfall on down to the earliest investors and then to the common stock. Of course, the issue David raises is now you got two sets of those. What do you do? Yeah. Like, do they both investors get to keep them? And do you burden the company with the combined preference?

So, like, if there's been $300 million in total invested, and that definitely wasn't the case in this case. But do you say, okay, there's going to be $300 million of preference. And so none of the employees are going to get anything until you get well above that point and create some pretty perverse incentives. Do you eliminate the preferences? If you eliminate them, how do you get someone to agree to eliminate their rights to that? And how do you figure out how much of that reduction is, you know, eaten by side A versus side B? And related to the preference tax, but slightly different is sometimes there are also different control or voting rights

attached to each round of financing someone has done. So in some cases, just the investors in the last round have a right to veto certain decisions. So it becomes a very complicated decision process with a lot of stakeholders, all in the context of entrepreneurs feeling optimistic about the go-to-loan approach, all in a context of a lot of uncertainty. And that's just getting the deal terms, which for me is half the battle. People have very complicated ways to think about M&A, acquisitions, mergers. You know, for me, there's two simple questions. Do you have conviction on the deal terms? Like, is it good deal terms? Like, do you think there's gonna be more value than what you're paying, whether you're paying in equity, cash, whatever. And the second is, do you have conviction around the post-close plan?

Can you actually execute it? And the second one is often forgotten about. It's tough to get to terms. But in the tech world, if you look at the history of M&A, most people, including third parties, would say that the vast majority of acquisitions are failures. The basis for this show. The vast majority are failures.

The reason why they're failures is not because they were off slightly on the negotiated terms. The reason why they're failures is because the execution post-close destroyed a bunch of value. If you don't have conviction in the execution plan, regardless of how good of a negotiator you are, it's not going to work. It's not going to work. And so Aaron, what was the execution plan then coming out of the merger? You know, in this case, we decided to do what we call a hard cutover. So basically, we're going to migrate all dog vacay customers on the demand side, all their sitters on the supply side over to the Rover platform and

basically execute a shutdown of the dog vacay technology and probably the office. We were going to offer some jobs to people to move to Seattle. In some cases, we may allow people to work remote, but we decided to do a hard cut over. And again, that made so much sense because of all the dynamics we talked about before. The marketplace of Rover converted at a much higher efficiency and then repeated at a much higher efficiency. So again, it's in everybody's best interest to add in all of this new liquidity into the marketplace. There's new supply, there's new demand. It's suddenly easier to find a sitter near you. You're finding higher quality sitters or better match sitters, all the benefits of having a lot more people on the platform. David, I'm going to say the word again. And I think now it's actually a thing that I say on

the show, which is unfortunate. It's like legitimate actual synergy. It's actually, it's true. And you know, how much of that that's realizable versus in theory. But I'd say it's easy to say, oh, have two independent brands. If you're dependent upon SEM. Trulian Zillow, which we've covered. Trulian Zillow. If you're dependent upon SEO or SEM, why remove one of your slots from Google? If you think that there are different consumer segments, so the different brands may actually attract different people and end up specializing in different things. So for us, the options we considered is two brands and two backends. So there's two frontends, two backends, two frontends, but one backend,

or one frontend, one backend. And the challenge with this is there's pretty compelling rationales for each of the three. And if you look at how a lot of the marketplace businesses have managed this, not everyone goes aggressively to the one front end, one back end. Very few actually have. But we were at a stage where we thought that slowing down for two years while a bunch of internal lobbying went on around this, a bunch of systems integration with different tech stacks, different coding languages, different skill sets, different architecture. We just thought it'd be a disaster to lose two years in that type of integration. You know, that if we were further along, you know, if we were already a public company or soon to be like Grubhub and

Seamless, maybe we could have made a different choice. But we just thought it would slow us down quite a bit for uncertain benefit of keeping the brand. But it's also the most offensive thing to propose to another company. Hey, we want to do this deal. We're excited about it. And by the way, we're going to quickly throw out everything you've done. It's just really, really hard. And yet, if you don't get that agreement in advance, your chance of successfully executing a deal post-close is like nil. Or at least it'll drag out for a really long time. We thought all this through in advance and we got agreement from Dog Vacay that we weren't going to close on the deal unless both sides could mutually agree upon the post-close plan,

execution plan, integration plan. And so kudos to the Dog Vacay Senior Leadership Team. Their executives came up, met with us. We kind of laid out each of the three scenarios, said, you know, here's what we think the advantages and disadvantages of each one. You tell us which one you think makes sense. We didn't even offer our own opinion and we didn't buy us the conversation. And unanimously, their executive team said, hard cut over, go to the Rover platform, which probably took a lot of courage. Yeah, rational as that may be, there's huge emotional attachment to it. Not only what you've built, but the dream of what could be. Totally. And then it creates a bunch of uncertainty. Well,

God, if the platform is going to be Rover, then what happens to the Santa Monica office? What happens to my personal job? I have a lot of expertise on how our system works, and our system is not going to be relevant. You know, I was very proud of the Dog Vacay team for being consummate professionals. You know, the right call. But we were unique. If you look at Odesky, Lance, if you look at Grubhub, Seamless. Zillow, Trulia as well. Zillow, Trulia as well.

Zillow, Trulia. None of those companies had attempted to be as aggressive with the plan as us. We wanted to be done in six months and not two years, not three years, not a year. So kudos to the team for being able to take that on with such passion. This might be among many lessons for listeners in this episode and for all of us personally living it. I mean, this ranks right up there. As hard as it was in terms of as we were talking about all the stakeholders on the investor operational side taking years to get to a point to want to do a merger. The speed and effectiveness of the integration and the vast outperformance of it and the combined company. I mean, I remember we were all both sides putting together spreadsheets throughout the negotiation process of what we

thought the combined value could be and growth thereafter, the company has far exceeded that on all levels. And I think it's a testament to all of this and the team and the Doug Vacay team for suggesting this and the Rover team and everybody combined executing on it. It has definitely been the best thing for the company. And for the companies, for shareholders in both companies. Yeah, I think it turned out to be the right plan, executed well. We got done in about half the time and exceeded every goal. It was three months, right? Three months. Exceeded the goals on the successful sitter migration, successful owner migration. It was well executed. And we had given stay bonuses to people in Santa Monica because there was uncertainty around whether or not there's still going to be a job after we got done with the migration.

We accelerated. We gave new grants and accelerated a portion of them. That was kind of based on when the migration was done. Hopefully, people feel really good and felt like they were treated well and appropriately rewarded for what a Herculean job they did in a small amount of time, but turned out to be the right plan with better than expected execution. And, you know, that kind of brings us to today. Rover just recently announced the combined company, a major new fundraising. Things are going really well.

And I think particularly, well, we're expanding internationally, which is wonderful, but particularly not having the distraction of all that at a moment when we were just starting to layer in all the additional services besides dog boarding, dog walking, daycare, all the other in-home services, which have become huge growth drivers for the business, was critical. Yeah, I think that's one of the biggest reasons we didn't want to slow down. We view this area as like we're in the second or third inning. We're a small fraction of the size we hope to be long term. Most of our business was overnight care.

We had rolled out dog walking and drop-in visits and in-home daycare. At the exact same time we were doing this migration, we launched our on-demand dog walking effort. Why not? Yeah, why not? And so it was one of our biggest concerns is that it's not like we were a manufacturing plant and it was like, okay, we're operating at capacity. Now, can we squeeze out a little bit more efficiency? Our view is we're nowhere near capacity in terms of what we want to accomplish. You know, let's not slow down. The speed and minimizing the distraction of the execution plan was super important. So we could launch on-demand

dog walking. We could roll out new offerings. We could start to look at aggressive international expansion, which we're kicking off right now in Europe. Let's do our other sections here real quick and make sure we check a few boxes. A couple of points that I think we haven't quite made yet. Listeners, our next section is acquisition category, where we decide whether it was a people, technology, product, business line, asset, consolidation, or other type of acquisition. Clear consolidation. I don't think there's anything. We're looking around the room. We're all nodding our heads.

There's not that much has been discussed. There's what would have happened otherwise, where one thing that I think we touched on a little bit here is the cost to acquire a customer and the sort of war going on between former vacay and former rover and the dynamic of this type of business. And I'll explain sort of my understanding of it. And Aaron, you can correct me in areas where I don't have enough sort of sophistication or understanding of it, but this business is a very intent driven business. So people go to Google and they search on the internet for a solution to a problem that they have, which is I need a dog sitter.

So you got to buy all the keywords to cover all of those things. Now, Google's keyword tool is of course an auction. So with two parties bidding it up, your cost to acquire should be meaningfully higher if there's two people bidding for it than if there was just one major player. And so then you have both of these companies that are always aggressively bidding on these keywords, driving up the price. And as soon as there's just one party, it should theoretically be much easier and cheaper to acquire that person who has intent to do the thing that your service provides. Was that a major driver of the acquisition? And have you kind of seen that materialize? Sure. So I think the question is, is whether or not the savings on the marketing side was a major area of value of the acquisition? The answer is yes.

You know, a lot of people suggest, you know, valuing these types of deals, you know, on strategic value, your multiple as a public company would be higher, you know, with the consolidation. And that's not how we did it. You know, I don't, I struggle with hand wavy things. And I struggle with this assumption that like there's going to be some long-term multiple gain when we live in a highly dynamic area where there are lots of big funds and competitors can get funded you know competitive landscapes change so we modeled it as basically a cash flow like what is the amount of incremental revenue minus incremental cost. And the case where there's cost savings, and obviously you add the cost savings over some number of years. And that's how we added it. And it turned out that only about 15% of the value of the deal was Dog Vacay's existing revenue stream.

The other portions of value came through other forms and savings on the marketing side was a big one. You know, some of the other ones that were better data coverage. So to the degree our marketplace works well, because we do smart things with data. In order to do smart things, you have to kind of with data. Yeah, two things. required. You have to have data and you have to know what the smart things are. And for the service providers that were on both platforms, it gave us a more holistic picture of how they perform and do people like them and do they use them again and how responsive are they? And then for people that are on just one platform, for example, just on Dog Vacay, we were able to use kind of those algorithms that we had invested a little bit more in to help evaluate those people. And so we got a decent amount of value from, call it, the economies of scale on the data side in addition to the marketing savings.

Interesting. Never would have occurred to me. That's cool. Tech themes and then wrap up here? Sounds good. You want to go first, man? That was my major one, was really the era of the fruits of competition lining Google's pockets. I have a couple, but I think the biggest one is something we've talked about a lot on this show, and reliving the story has brought back to mind and recalled for me the lived experience here.

The adage, the two-by by two matrix of the way you make money investing or starting companies is not just by being correct in your hypothesis, but having a correct non-consensus bet. And I think back to the early days of Rover and the signs of the apocalypse and pet.com. And I will, Aaron, I will give you money to do anything. Oh, you're doing that. I'm not going to give you money to do anything. Oh, you're doing that. I'm not going to give you money to do that. Now, sometimes when you do that, you are wrong and everybody else is right. And then, you know, not only do you not make money, it's not just about making money, but you fail. But the way that you win and that you win really, really big is you do things that

are correct and not obvious. And Rover to me is just a shining example of that. And Peter Thiel, zero to one, what's your secret? Aaron's secret was dogs. Dogs are people too. But it was also the thing that if you spent 10 minutes and got over the knee-jerk reaction, even though, yes, we weren't clear on market size and we've joked throughout the episode, we knew there was something here. We knew there was something here. Everything else, I think we've covered. Yep. Grading, I'm going to be quick. This is an A. Nice job. Thank you for having me on the show today, by the way. Just to be clear, our view is that we haven't achieved anything yet. You know, we're still a money losing startup that may be more on the late stage side. And

there's a lot of work to do. It's nice to be right about some things early in the company's history, but we need to be right about a bunch of things go forward too. But I really appreciate the chance to come on and share a little bit of our story. So if you're in the Seattle area or not in the Seattle area and you want to be part of a great company that's already great, that still has a long journey ahead of it, come talk to everyone here at Rover. Yep. All right. We want to thank our longtime friend of the show, Vanta, the leading trust management platform. Vanta, of course, automates your security reviews and compliance efforts. So frameworks like SOC 2,

ISO 27001, GDPR, and HIPAA compliance and monitoring, Vanta takes care of these otherwise incredibly time and resource draining efforts for your organization and makes them fast and simple. Yep, Vanta is the perfect example of the quote that we talk about all the time here on Acquired, Jeff Bezos, his idea that a company should only focus on what actually makes your beer taste better, i.e. spend your time and resources only on what's actually going to move the needle for your product and your customers and outsource everything else that doesn't. Every company needs compliance and trust with their vendors and customers. It plays a major role in enabling revenue because customers

and partners demand it, but yet it adds zero flavor to your actual product. Vanta takes care of all of it for you. No more spreadsheets, no fragmented tools, no manual reviews to cobble together your security and compliance requirements. It is one single software pane of glass that connects to all of your services via APIs and eliminates countless hours of work for your organization. There are now AI capabilities to make this even more powerful, and they even integrate with over 300 external tools. Plus, they let customers build private integrations with their internal systems. And perhaps most importantly, your security reviews are now real-time instead of static, so you can monitor and share with your customers and partners to give them added confidence.

So whether you're a startup or a large enterprise and your company is ready to automate compliance and streamline security reviews like Vanta's 7,000 customers around the globe, and go back to making your beer taste better, head on over to vanta.com slash acquired and just tell them that Ben and David sent you. And thanks to friend of the show, Christina, Vanta's CEO, all acquired listeners get a thousand dollars of free credit. Vanta.com slash acquired. Let's wrap up. If you like the show and you want to hear more episodes, you can subscribe from your favorite podcast client and come join us in the Slack at acquired.fm. Thanks, everyone. We'll see you next time.

Thanks, guys.