In 2015, they purchased the all-flash vendor SolidFire for $870 million, then after a few years, transitioned it into a niche-case product and laid off many of the original engineers and developers. Then there was the “Spinnaker fiasco,” where NetApp spent $300 million on Spinnaker Networks for its clustered NAS technologies, then took over a decade to integrate the code into its OS.
So, when news came out at the end of 2020 that they would be acquiring CloudCheckr into their Spot by NetApp portfolio, everyone’s ears perked up. Would CloudCheckr meet the same fate as similar companies acquired by strategic organizations like NetApp? Would their product experience, strategy, and customer experience slowly dwindle until it was one small, unbranded piece of yet another alert engine? Only time will tell… but unfortunately, it’s not just NetApp repeating this same ol’ song and dance with tools in the cybersecurity industry.
We’ve seen it time and time again… when a large strategic organization acquires a scrappy, innovative startup, the experience of the product goes to crap. Let’s deep dive into the reasons why…
The Dangerous Road of Startup to Acquisition
A lot of what leads to the high growth of a scrappy and innovative start up company is the fact that they are very nimble. That’s the whole ethos of a lean startup organization — they can be hyper responsive to what’s happening with their users, their founder is likely only one or two touch points away from the customer experience strategy, and they’re hyper-focused on the problem that they are aiming to solve.
However, when a large, established company acquires a high-growth startup, several things happen:
First, that product’s identity fades into the background and they either subtly or completely rebrand into whatever the company is that acquired them. When this happens, they lose out on selling the brand awareness and experience that was associated with that product, and they lose that scrappiness in the market.
Second, like with NetApp’s SolidFire acquisition, a lot of the original engineers and developers behind the product were unfortunately let go, usually due to a finance department decision hoping to make the deal more lucrative. However, when this happens, you lose so much knowledge about the product and why it was innovative in the first place, and that leads to a lot of the growth and innovation of the product getting killed, because you just killed the mechanisms by which the growth and innovation were happening.
Third, and often the most impactful product change after acquisition, the pace and scrappiness of the product experience begins to slow… often to a halt. This includes putting several levels of hoops and checkpoints between users and customer teams, creating a stunted experience for the users.
The True Impact of Losing Out on Experience
Young startups who are very focused on growth are usually also hyper-focused on the user and their experience with the product. Teams are very responsive to what’s going on with their users, they put feedback directly into rapid innovation cycles, and there’s almost an obsessive level of care and oversight over the experience of their customers.
Unfortunately, when startups get acquired, those pace of improvements, updates, and staying up to date with their users loses momentum, if not goes away completely. What pops up in its place is the very rigid, monolithic type of support that lives within these larger organizations. Sure, they may still have good customer support, but they’re going to have longer wait times, and you likely won’t get the sort of product or engineering attention that you would from a young, scrappy company.
But what many of these strategic organizations don’t realize is that part of the reason that companies are buying and investing time into small startups is because that product is constantly innovating and keeping up with their unique business needs. Big organizations are far more removed from the user and they’re instead thinking about how they can integrate that one new thing they innovated into their other 6,000 customers and cross-sell the rest of their product suite. They’re not thinking, “Wait a minute… how do I continue to grow in this segment of the market and really focus on this user?”
The Lack of Focus that Comes with Cross Selling
Unfortunately, for a lot of the original users of these lean startup companies, they are often integrated into a larger, clunkier product post-acquisition that’s set in its way of doing things — rather than the other way around. This means that you lose the refined, exceptional experience that was focused on what you, the user, wanted, and you’re instead inundated with a new dashboard, a new panel, and a new place to work that feeds you all sorts of information that’s just trying to get you to acquire the larger suite of products.
You signed up for a cloud platform that helps you stay hyper focused on the things that matter. However, when companies like NetApp acquire that tool, you just get absorbed into a larger platform alongside all the other alert engines and you find that the tool you once used only continues to grow in complexity — the opposite of what you signed up for in the first place.
That’s why Tenacity fundamentally exists, because this experience and the overall experience of cybersecurity tools is broadly awful. Rather than trying to upsell you to a Frankenstein version of 10 cloud alert tools molded into one, we focus on bringing visibility to your cloud experience and we prioritize the things that matter to your unique business context. Nothing else.