I got a lot of props for sharing a couple smart strategic moves we made at Klout. They don't all work out that way so I think it's only fair to tell the story of the big strategic bet I made that flopped and almost killed the company

In late 2012 we signed a massive strategic deal with Microsoft https://techcrunch.com/2012/09/27/growing-its-influence-klout-gets-strategic-investment-from-microsoft-and-serious-bing-integration/

This was a huge deal for us. $8m investment (uncapped note) with more than $10m in data revenue. Talk all the shit you want about Bing but it's still a massive audience so it was super exciting to work at that scale

our core business had started to plateau and we were having trouble figuring out what our next growth driver was going to be. The conversations around the Microsoft investment made it clear that there was interest in a potential acquisition if things went well

I went all in on this relationship. Put all our best people on the project, hired people up in Seattle and spent a huge amount of my time up there working with the team.

I fell in love with the project. The team we were working with on the Microsoft side was great and together it felt like we were making real progress. I leaned in even more.

About a year into this the board started getting nervous. Our core business was flat. I felt really confident that Microsoft would buy us and it would be a great outcome. As a board we agreed that it was time to force the conversation.

Our discussions felt like they were going well and then they hit a wall. Balmer was leaving and there was too much uncertainty for them to make any significant moves. It was a gut punch.

Everything started to unwind. Our core business was now in decline after more than a year of neglect. I reallocated our best people from Microsoft back to the core. This pissed Microsoft off and put our data revenue at risk

The company was spinning and people started jumping ship. The board was openly talking about replacing me as ceo. It was easily the hardest stretch for me as a leader

Slowly we started to stabilize things though we never got close to regaining our full momentum. About a year later we were acquired for considerably less than the conversations we were having with Microsoft. Frankly, we are lucky we didn't go out of business.

The line between success and failure in a startup can be so thin sometimes. With a couple lucky breaks this would be a story of a brilliant strategy leading to a huge acquisition.

The more you count on lucky breaks though the more likely you'll end up disappointed. I sacrificed any potential position of power we might have by taking my eye off of our core business.

It's so tempting when the big company comes knocking. Especially when you're tired and not sure what to do next. I recommend fixing your boat though before trying to jump out and swimming to someone else's.