In this Fool Live segment from "The AI/ML Show," recorded on Feb. 9, Motley Fool contributors Toby Bordelon and Jason Hall discuss their reactions to a recent interview with Veritone co-founder Ryan Steelberg. They share some of Steelberg's thoughts on best handling acquisitions.
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Toby Bordelon: I asked him about his thought process and acquisitions. How do you think about an acquisition. I was struck by the fact that he reached straight to the people component of that. He talked about how when you're buying a business or you are acquiring a business, what you're doing is you're getting the people and it's so important to think about how that's going to fit. You don't start with a cool product or a cool technology first. You're acquiring a group of people who have worked on this, and they need to fit into your existing model. You need to understand how they work, and you need to be able to match those cultures because that's really what it comes down to.
Jason Hall: I was reading between the lines a little bit, but it sounds like he probably had learned that lesson the hard way because when you build a company from the beginning, there's a certain culture that you instill in it that you're a part of, and when you bring another group in that culturally is not aligned, or that you mess it up some way, or you just buy the IP and then you lose the people that built it and had the vision, that's when acquisitions go bad.
Toby Bordelon: Exactly. Even the Fool universe is filled with examples of acquisitions that just did not go well. In large part for that reason, you do an acquisition and everyone's happy. Yes, something, great. What happens six months later? The founder of the acquired company is out of the door. You end up not being able to do perhaps what you wanted to do with that. All throughout news yesterday. We were talking of Peloton. They acquired Precor not too long ago, and now that CEO is leaving as part of a lot of changes now, so you've got to get that right.
Jason Hall: But staying on as Executive Chairman.
Toby Bordelon: Also the CEO of Peloton is Executive Chairman.
Jason Hall: Oh yeah.
Toby Bordelon: The CEO of the acquired company, they announced, I think, yesterday that he's leaving the company.
Jason Hall: Exactly.
Toby Bordelon: That did not work out. You wonder how much of that was the business and how much of that was that, "Hey, this culture is not going to work for us." We want to go into different directions. We're not on the same page. We're not on the same vision. I think to Ryan's point, it's important when you get an acquisition, the people, you're bringing on, make sure they are on the same page as you. Make sure everyone has a shared vision for where you want this combined company to go.