How not to get acquired | Hacker News Reader

How not to get acquired

blog.gittip.com

120 pointswhit53784 comments

The lesson learned here isn't that FeeFighters fucked up their acquisition. It's that you should be especially wary building businesses that depend almost entirely on another startup.

Put another way, you should only use services that are pretty obviously going to stay around and aren't just a few years old with no solid track record.

A service may be perfect for your business to hook into, but is it really realistic to expect something like Samurai to stick around for 5-10 years?

EDIT: I would also say that yes, FeeFighters _did_ royally eff up the acquisition process in that they threw their customers under the bus. It lends credence to the idea that they probably had no customers to begin with.

Also, GroupOn is not the enemy here. They acquired technology, talent, whatever. It's in their best interest to negotiate terms that are favorable to GroupOn. If FeeFighters didn't go to bat for their current customers, why would GroupOn volunteer to take on that burden?

Yeah, no kidding. I ended up with a merchant account with fusty old FirstData out of the ordeal. I look at FirstData and their portal, www.mymerchantoffice.com, in a whole new light now. It may suck, but I can expect it to suck consistently for years to come.

It also feels now like I should be vaulting cards with multiple vendors to avoid a single point of failure. As mentioned I went with Stripe, who are similarly green. I'm in the process of moving my merchant account over to Braintree. Also looking at WePay and Dwolla. Who else?

Braintree is pretty great, I like working with their API and customer service (always ready and willing to talk on the phone, which is great).

Avoid Authorize.Net like the plague. Horrifically bad XML API that will make you want to claw your eyes out.

But it'll be a horrifically bad XML API for years and years :)

You should try WorldPay if your looking for shit but consistent. WorldPay will be around for ever, as will their dog-rough "web service" written by someone who hates the web and where verification tokens are optional. Checkout this FAB API http://www.worldpay.com/support/kb/bg/recurringpayments/rpfp...

That's not really much worse than Authorize.net.

Don't get me wrong. I hate Authorize.net and don't plan on using them for anything in the future. I'd rather refactor code than write comma separated string code once knowing it will work forever.

Where is there XML in Authorize.Net's API? Here's how you charge a card using the AIM (Advanced Integration Method) interface (Perl sample code):

    my $post_values	= 
    {
        "x_login"			=> "API_LOGIN_ID",
        "x_tran_key"		=> "TRANSACTION_KEY",
        "x_version"			=> "3.1",
        "x_delim_data"		=> "TRUE",
        "x_delim_char"		=> "|",
        "x_relay_response"	=> "FALSE",
        "x_type"			=> "AUTH_CAPTURE",
        "x_method"			=> "CC",
        "x_card_num"		=> "4111111111111111",
        "x_exp_date"		=> "0115",
        "x_amount"			=> "19.99",
        "x_description"		=> "Sample Transaction",
        "x_first_name"		=> "John",
        "x_last_name"		=> "Doe",
        "x_address"			=> "1234 Street",
        "x_state"			=> "WA",
        "x_zip"				=> "98004"	
    };
    my $useragent	= LWP::UserAgent->new( protocols_allowed => ["https"] );
    my $request		= POST( $post_url, $post_values );
    my $response	= $useragent->request( $request );

That's just a straightforward form post to a CGI. Result is a line of CSV data. No XML in sight.

Does the non-AIM option (I forget what it is called) use XML?

I don't have the code handy (was client work for a third party), but we definitely used XML through Auth.net's AIM. Here are the API docs for it:

http://www.authorize.net/support/AIM_guide_XML.pdf

We also used XML through their CIM to manage customer profiles. To be fair, this was all in PHP, and the code was inherited so I'm not sure if there was a better way to deal with Auth.net's API.

I do know that their dashboards were thoroughly unpleasant to deal with and I felt the API was obtuse in many different locations.

Interesting. Here's the non-XML AIM guide: http://www.authorize.net/support/AIM_guide.pdf

That's the one we use. I didn't even know they had an XML option--and now I'm going to try to forget it! :-)

Interesting! I had no idea they had a non-XML option. If I was still working on the project, I'd totally push for that.

Good to know for future projects =)

I think the perl lib formats and sends this as XML, and perhaps dropping down to XML is required if the language lib isn't up to date.

No it doesn't

Business::OnlinePayment is one of those standup CPAN libraries that may not be well known but solves real(world) problems. I'm using it in a line of business app at work and when we ditched authorize.net I migrated to ippay by changing a couple lines of code.

I used Authorize.net at a previous employer, and don't remember the API being too terrible. We wrote a wrapper for it, and forgot all about it until we needed to add features.

Shameless plug for Spreedlycore.com where you can vault your cards separately and work with all the gateways listed here. This is an extreme example (gone into limbo in this case) but one of the motivations for our offering. You could have migrated to Stripe/Braintree etc via a config change.

This looks really cool.

So true! First Data is the grandpa in the room. Their site doesnt render properly on Chrome even :(

I experienced great customer service from FeeFighters prior to the acquisition, so in my experience it's not true that "FeeFighters didn't go to bat for their current customers."

The "enemy" to my mind is the chaos that results from not being transparent and kind.

I believe he meant go to bat during the acquisition deal making. Regardless of how awesome their CS was pre-acquisition if there were no terms regarding current customers/continuity during the acquisition talks then they didn't "go to bat for their customers".

Roger that. Thank you.

Hello everyone -- this has been an interesting and painful conversation to watch. I am Sean, co-founder of FeeFighters.

Integrating the acquisition of a small company into a large company is hard. I suspect there are very few acquisitions where customers do not experience at least some pain. I am deeply sorry for customers who have had support tickets get dropped or experienced slow responses during this period of integration. We are working to smooth things out.

When we got bought, in addition to some personal stuff, like moving across the country (most of our team moved to Palo Alto, so we could all be together instead of distributed), we had to very quickly build additional functionality and scalability into our product to support the ambitious goals that Groupon has for our technology. Since we have been more focused on development and since Marc and Stella, who were doing a lot of our customer service, did not come along with the acquisition, our customer service has suffered.

It is really uncool how quickly other startups are to snipe at each other. We started a business, pivoted, built something valuable, sold it at a profit, and are now in an amazing position to solve the customer problems we initially set out to solve. If that resulted in you having a bad customer experience, it is perfectly reasonable to complain about it, and we are listening and working to fix it. But (Fred from Fleapay) why would you insult us by saying that we didn't build our product (we did)? And what do you know about why Groupon bought us? And what does Ayn Rand have to do with this anyway?

As always, if you are a customer and you want to talk, I am at sean@feefighters.

I have to wag my head at the lack of a having a smooth transition plan for customer support. The new Groupon overlords should've insisted on it, or at least supported it.

Sounds like GroupOn might be able to compete with Digital River for crappiest customer experiences.

I have to admit that after reading the post and not getting any responses to emails or phone calls, and seeing other people experiencing the same thing 3 months after acquisition, we assumed the worst. I'm glad you guys are still working on the product and I hope it survives and becomes something even more powerful.

I have tried contacting you guys at least 10 times (emails to help, support, sean, sheel and left VM at the 855 #) during hte last 2 months after completing my merchant account process for Samurai. I have NEVER received an email back, even a courtesy note saying "due to the Groupon acquisition, we are not processing new accounts" or "we have received your email, can we reply back on <date>".

I guess the bottomline is when are you guys going to be back to normal?

1) Cleaned up support options on the website - remove the old emails and phone #s if they don't work or nobody is manning them

2) Reply to support within a reasonable amount of time like 24-48 hours

I just need a date so I can stop bothering you until then.

Chris

I was in the exact same situation, unfortunately. Had everything built out, with a final nagging notFound error. No response for two weeks, tried twitter, email, phone - nothing. Eventually I learned of their acquisition issues when Sean responded to a post I made here: http://news.ycombinator.com/item?id=4101870. If customer service comes down to responding to angry HN submissions, something is seriously wrong. At the VERY LEAST turn on an auto reply for support requests that explains the situation.

Anyway, best of luck.

It's assumed that a company acting in its own interest is a foregone conclusion, but when a customer does the same thing it's a problem. Note that this post was apparently the only way to get attention to the problem.

Call a spade a spade: the ball was dropped here. No need for butthurt, you guys got paid.

> It is really uncool how quickly other startups are to snipe at each other.

You abandoned your paying B2B clients, and left them holding the ball with annoyed customers and damaged cash flow. Isn't it unfair then to complain that they are badmouthing you?

Out of professionalism (if not contractual obligation), this situation should have been better handled. Finance is all about trust in questions such as: will they pay me? can my customers have faith in them? what happens if there's a problem?

To be fair, FeeFighters isn't the worst transitional incidident in recent history (AlertPay's was much worse), and hasn't harmed the most people (ePassporte and iBill before it were terrible).

I'm not one of your clients, and before this fiasco I had quite a bit of respect for FeeFighters, but in the future I'll find myself vary wary about using any financial product you create or invest in.

Reminds me when a bunch of Minnesota nurses walked-out on their patients in protest of conflict with their union negotiations claiming "We're doing this for our patients, because we are understaffed and the hospitals need to staff more but are unwilling." Complete BS. You care soooo much about your patients (customers) that you walk out on them... not cool [and highly hypocritical].

This is nothing of the sort.

I would feel genuine sympathy for FeeFighters if they were shutting down their program because it didn't pay well---bankruptcy, and the need to feed your family are reasonable obstructions to delivering an orderly shut down.

However that's not the case. They got acquired, and on the eve of their pay day they decide to begin ignoring the very customers responsible for their valuation.

It's really uncool to blame your poor planning on other people. This is a business not a frat party you forgot to text somebody about. You're the owner of a company that is taking other peoples money for a service. You dont get to say "Sorry guys, I was moving". I mean, are you serious? That's your excuse. You could have easily delegated some time or had an employee handle support and offset your move dates in order to offer seamless support and not put peoples trust and their own customers relationships on the line. If i was your customer I would immediately jump ship.

Also: 3 weeks of no response is far from "quickly" becoming snipe. I could understand if that mans blog post was after 3 days, but 3 weeks? Come on. You guys fucked up.

I heard a FeeFighters employee speak last year and she recommended objectivism (Ayn Rand, Atlas Shrugged) as a good philosophy for entrepreneurs, saying it worked for FeeFighters. When I heard they sold, I assumed that the deal was bad for FeeFighters customers because FeeFighters staff were so compassionless due to their philosophy. Unfortunately, it seems that I was right.

:-(

"I had a hard time with Ayn Rand because I found myself enthusiastically agreeing with the first 90% of every sentence, but getting lost at 'therefore, be a huge asshole to everyone.'"

http://xkcd.com/1049/

I'm sure there are plenty of good ideas and lessons from reading the bible. Doesn't mean you have to live up to every word of it without common sense.

I haven't seen any that weren't stolen from somewhere else and weren't no-brainers to begin with.

"The first thing to get clear about Christian morality between man and man is that in this department Christ did not come to preach any brand new morality. The Golden Rule of the New Testament (Do as you would be done by) is a summing up of what every one, at bottom, had always known to be right. Really great moral teachers never do introduce new moralities: it is quacks and cranks who do that. As Dr Johnson said, ‘People need to be reminded more often than they need to be instructed.’ The real job of every moral teacher is to keep on bringing us back, time after time, to the old simple principles which we are all so anxious not to see; like bringing a horse back and back to the fence it has refused to jump or bringing a child back and back to the bit in its lesson that it wants to shirk."

-- C.S Lewis "Mere Christianity"

"There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs."

- Kung Fu Monkey

http://kfmonkey.blogspot.com/2009/03/ephemera-2009-7.html

Stella Fayman?

https://twitter.com/#!/startupstella

http://startupstella.com/

http://entrepreneursunpluggd.com/

She's the only woman on their About page:

https://samurai.feefighters.com/about

But maybe that's getting too personal.

Not necessarily op could be someone who resolves s\he to she. Not realizing that someone would take it literally, or knowing that there is only one she there.

yep I'm the only woman who was at FeeFighters and I respect Ayn Rand but I've never said anything about objectivism publicly...in fact, I would never recommend any philosophy for entrepreneurs as it is in fact, against my philosophy. So maybe you're getting me confused with someone else?

Can you shed any light on the future of FeeFighters and Samurai? How can users get their data out?

Alas, I cannot although I wish I could. I was not interested in working for a big company post-acquisition...hence the name "startup stella." I do hope the guys respond as we always respected the HN community and depended on it greatly. Whatever happened, hopefully the situation can be rectified.

Thanks for weighing in, Stella. I've just heard from Sheel via email with an apology, and now I've just gotten off the phone with Sean. He apologized for the support requests that have been dropped during the transition to GroupOn. At his request, I've removed the "Reflection" part of my piece, which admittedly engaged in unfounded speculation. I apologize.

I'd also like to apologize to Sean and the team for not trying harder to contact them personally. For example, there is an email address and other contact info listed for Sean on the FeeFighter's About page (I had been looking at the Samurai About page):

http://feefighters.com/about

I believe that Sean and his team are making a good-faith effort to integrate FeeFighters with GroupOn. I've suggested to him that bringing back the three advertised support channels could be a good next step to maintain trust (the toll-free number, the Campfire chatroom, and the ZenDesk).

I freely admit that I've tried to "make lemonade" from what otherwise was a bad situation for Gittip, by publishing this piece and submitting it to Hacker News. I appreciate Sean for calling me and working through the issue together at a personal level. I have no hard feelings towards him and his team, and I wish them all the best as they try to tame the complexity of a significant acquisition, for which, in the end, they are to be congratulated.

I worry that this sentence: "I freely admit that I've tried to "make lemonade" from what otherwise was a bad situation for Gittip, by publishing this piece and submitting it to Hacker News." is perhaps the most important here. It wouldn't be such a big deal if this was a rant against an established brand like a large technology company. But to target individuals and name names - only to then do essentially a complete 180 after one phone call - is problematic and perhaps everything that's wrong with the power of forums like this and twitter.

And he removed the big name-calling rant section after the phone call... the one set off by a loss of 51 dollars. Looks more like a publicity stunt rather than righteous outrage.

Publicity stunt or righteous outrage? I'll have the salmon.

$51 or $51,000,000 a client is a client, and you have a contract (or you fucking should do) to provide a service.

3 weeks is breach, esp. without informing your clients so that they can at least investigate other avenues / allow them to mitigate your issues as a business.

This isn't high school ~ running around saying "But he's only posting to get attention, waaa waaa" is pathetic, and not how businesses (should be) run.

~ General levels of business acumen here are severely lacking.

> I'd also like to apologize to Sean and the team for not trying harder to contact them personally.

That sounds like an odd thing to apologize for. You should not have to dig up personal contact information to get minimal customer service.

And I should be held accountable to dig up personal contact information before publishing zingy blog posts.

Same with me, I just completed my merchant account with Feefighters to be able to use Samurai. I've tried all the support emails, including calling the phone # and leaving a voicemail. My original contact was Sheel and Sean but they are not even replying to their personal emails @feefighters.com. It's good that I haven't switched to their service yet but I am assuming they are NOT continuing this service anymore?

Don't apologize. This was apparently the only possible way they would respond (which you didn't know anyway). Remember all the tweets, emails and stuff they flat-out ignored.

I'm with the side of people saying you shouldn't have to apologize. That's like saying you apologize for not finding Tim Cook's personal email when iCloud is down and they ignore your calls, support tickets, emails, inquires at the genius bar, posts on their support forum, etc.

It's THEIR responsibility as representatives (and owner) of THEIR company to make themselves available via the information THEY provided, on the site you signed up for THEIR services.

They deserve the zingy blogpost and don't deserve your apology.

This is bad business and frankly I would stay far away from them despite your newfound guilt.

Edit: Switched out Steve Jobs for Tim Cook and removed the 2nd repetitive analogy.

My impression of Fee Fighters was pretty low before I read this, but after reading your apology I can't even begin to imagine how terrible this company must be.

It's one thing for them to disregard the utter failure of letting a billing service unattended and broken for three weeks, but another thing to contact their clients and force them into a public apology. The tone of your message ("I'd also like to apologize to Sean and the team for not trying harder to contact them personaly...") really makes it seem like you're being threatened here.

Subtext:

"We've just been acquired and now have GroupOn's lawyers on retainer. Our fish is bigger than your fish".

I love the fact that this minor tea-cup vignette reeks of being less than professional, and GroupOn is involved. "Food stamps for the middle classes", run by con-men. And you don't expect shit to stick together? Such naivety.

For the record, 3 weeks no contact from a business that's handling the cash flow for this poor guy (whose sales are admittedly... tiny, but hey, he appears to be trying in good faith), and you've the balls to phone hustle away the bad PR you caused yourself? Luckily, small startup doesn't know what "breach of contract" is, and you've GroupOn's lawyers now...

Alt text: "In the race to the bottom, we'll take the low hanging fruit".

[edit for clarity] Obviously, @Sean, not the author of the post I replied to.

Apologies, but I believe you did recommend Atlas Shrugged to a room full of entrepreneurs and students. I shouldn't have read so much into your recommendation but I am still not surprised by the sale and the results of it.

I'm always surprised when I'm reminded that people actually take Objectivism seriously. Especially with Peikoff at the reins.

Then I become unceasingly depressed for a few days.

That Louis C. K. bit helps me out in such situations. :-)

http://www.youtube.com/watch?v=8r1CZTLk-Gk

"And then when you ran out of money, you'd just go, 'Well, I can't do any more things now.'"

This seems like an unfair attack (edit: especially as below it seems it's not even accurate). As an example of what a company actually run by someone who advocates that philosophy looks like, take a look at BB&T, which avoided much of the subprime lending crisis. The bank refused to underwrite seemingly profitable mortgages that they thought might be harmful to customers (since property values couldn't go up forever), even though Countrywide, Bank of America, and others underwrote negative amortization mortgages. In the long run, the CEO understood he could be more profitable by entering into mutually beneficial deals.

“We knew that we would be setting up a lot of young people to get in trouble if we made negative amortization mortgages,” Allison said in a recent interview. “I’m never going to make a decision that I believe is bad for my clients, even if I can make a profit in the short-term, because it will always come back to haunt me.”

Sources:

On avoiding ARMs: http://www.aier.org/article/7594-restoring-trust-banking

On being run by an Objectivist and guiding the bank by Ayn Rand's philosophy: http://www.nytimes.com/2009/08/02/business/02bbt.html?pagewa...

I just discovered that FeeFighters got acquired due to this post. I'm so disappointed. This product does not belong at Groupon.

We've been emailing Sean recently to ask him about Samurai and I guess this explains the no response. I really loved what he was doing and sung the FeeFighters praises from the mountaintops whenever I could. I really wish that product had stuck around. All the info that they were producing on their blog was really just gold for businesses. The education they were giving on interchange plus pricing, etc, was really important (but I guess becoming less important now that places like Stripe are hiding all those complications behind their simple pricing).

I had a great experience with Sean and FeeFighters before they were acquired. I can understand being in a crowded market and eyeing the exit. It could certainly be handled more gracefully. GroupOn should either support the product, or at the very least support people trying to migrate their data away. That's the really frustrating part of this. I lucked out to have this come to a head early on, with only 25 cards vaulted. If you have 250 or 2,500 ... :-(

I can understand it too, and I'm not sure the VC they had behind them were the enlightened kind (like USV, Spark, Andreesen, etc.) so there may have been some pressure from that end as well. But Groupon? That just says acqui-hire to me, and that sucks because they had really built an awesome product that I've used multiple times for multiple companies.

So, I'm with you on the GroupOn Fucker that ruined this. I hope Sean and the gang got handsomely rewarded for their years of work.

> I lucked out to have this come to a head early on, with only 25 cards vaulted. If you have 250 or 2,500 ... :-(

I'm stuck with a merchant account provider I detest, that's raised my rates just about every month for 3 years, because there's no way to get my customers' info back out of the payment gateway. It's either keep wasting money on rates nowhere near what I initially agreed to, with lousy support, or lose even more money by asking every customer to re-enter their billing info. Just a few percent deciding to ignore the mail and let their subscriptions lapse would be more costly than the fees.

These days, in the US at least, there's affordable options for both payment info vaults that can connect to multiple gateways, or gateways offered by merchant companies that will give you your data if you decide to leave them. A few years ago, that wasn't really the case.

:-(

Since users have to update their info when their cards expire, can you start vaulting cards in two places, and slowly migrate away?

Transfer away as many customers as you can.

To those who don't respond the first time, give them an offer for an X% discount for loyalty or something of the such. When they try to take advantage of it, then ask them to give you billing information once again.

You should hit 99.9% with that, and either take a loss on the custoemrs left over or more likely keep the legacy customers alive for years on to come.

I was in the process of integrating Samurai myself. Luckily, I hadn't yet launched and was able to switch over to Braintree. Thus far I've been really happy with Braintree.

The part that I find really offensive is - they're still taking new account signups, with zero support for those users.

I appreciate the Author's attempt to empathize with the founders/team on the acquisition results. It's not an obligation for customers to consider anything beyond what they were promised and pay for - so kudos there.

That said, the difference between the startup and big co. is so vast that there will never be a single person to be blamed for botched acquisitions. In fact, both parties are at fault - not for initiating the buy - but rather for the failure to commit so fully that an alternative outcome could have been had.

In some circumstances it does make sense to shutter a project, but that doesn't mean a good plan to make that happen appropriately can't be had (I understate the complexity of making that happen). Additionally I'd like to note that within larger companies, both the appetite and passion for making acquisitions work is highly variable. And frankly, it requires a lot of broad effort to make it work which is why acquisitions are so hard to do well.

Anyways I'm glad that gittip was able to find a replacement solution; these setbacks are only part of the process in building your own entrepreneurial endeavor.

Fair enough. In the previous blog post that I quoted, I was thinking in terms of fine-grained things: "A specific human is responsible for the way issues are cross-linked in GitHub. Another specific human is responsible for the slide-out transition on the Tumblr HTML theme editor." You're right that for something as complex as an acquisition, there's unlikely to be a single GroupOn Effer. To open up corporations is a much more nuanced task than simply identifying a scapegoat as part of crisis management.

It was probably unhelpful to oversimplify about GroupOn Fucker. Sorry. :-(

Weird acquisition. FeeFighters didnt even build Samurai. And Samurai had nothing to do with Groupon grabbing em. It was some other thing they were building apparently.

We're (Fleapay.com) getting ready to integrate with Braintree. So far, they've been very helpful. Nice people.

What are you talking about? FeeFighters is a Samurai project. And Groupon bought them out.

FeeFighters didn't build Samurai. As I understand it, they acquired the team/project who did.

I believe it was a partnership between FeeFighters and Arizona Bay (one of their funders)

A post on this same topic > 1 week ago that didn't get any traction:

http://news.ycombinator.com/item?id=4101870

Could he use Stripe instead?

That's who I switched to.

So problem solved? (BTW I liked your lightening talk at Pycon)

We'll find out tomorrow. :-)

https://www.gittip.com/about/stats.html

And thanks!

By the way, I just thought of a killer feature for your site. How about if users can link the amount/frequeny tipped to the developer's activity on a github project?

Maybe the user could set metrics to link the tips to like tests added, LOC removed (refactoring), issues resolved.

Well just a thought.

https://github.com/whit537/www.gittip.com/issues/70

Awesome, I'm famous :-)

:-)

When/how does mint charge $2.99 a month? I've never paid anything.

He charges $2.99 for his mint alternative. It was a very poorly worded post.

Sorry ... the whole post was poorly worded?

I changed the comma to a semicolon, if that helps.

Sorry to be unclear: it's IHasAMoney.com that charges you $2.99 a month. Mint charges advertisers who-knows-what for your financial data.

Reply on news.ycombinator.com