Dumont: Bitly Burned Through Venture Capital Before Pivoting to Profitability
Andrew Dumont · Startup Acquisition Stories with Andrew Dumont, CEO of Stamped · Jun 27, 2022 · at 2:46
Andrew Dumont, operating partner at Tiny Capital, reflects on his transition from startup studio Betaworks to operating at Bitly during its turnaround.
0:00 / 0:22exact quote · 22.5s
720p mp4 · rendered on demand · StarZero watermark
“Bitly was interesting because it was a venture-funded company that kind of blew through a lot of the venture capital needed to become a sustainable, scalable business, and I hopped over from Betaworks to Bitly, and I saw a lot of that, not necessarily post-acquisition, but that transition from venture scale to sustainable, profitable business”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Andrew Dumont
Dumont: Rebuilding everything post-acquisition is an acquirer's biggest mistake
“I think the biggest mistake is people take over a business and they feel like they have to scrap everything, you know, just get rebuild everything. And in some cases that's not needed. Like you need to continue the momentum that exists and start building the m…”
Dumont: Buyers always discover post-acquisition surprises requiring original team knowledge
“The thing that's been broadly true is that there's always stuff that you find out after the fact with an acquisition. And if you don't have access to that team or kind of the institutional knowledge for that product, it can become really difficult to find a so…”
Dumont: Acquirers often rush diligence and underestimate technical debt
“I find that generally folks kind of rush through the product that they're acquiring and not fully understanding the technical debt that exists within the business. If there is any, and in most cases with software there typically is.”
Dumont: Acquired businesses are almost never fully optimized
“Typically when somebody is selling a business, It is not fully optimized. So I think the thing that has been obvious from each one of these companies is there is always opportunity”
Dumont: Tiny Capital targets profitable companies with consistent, not exponential, growth
“I think something that Tiny does that's really smart is they acquire companies that are Already profitable. Are growing consistently, not exponentially. But you know, they have a good growth rate”
Dumont: Acquired businesses must actively balance growth investment against extracting earnings
“That's always the balance as an operator is how much do I want to invest in the business versus taking earnings out of the business. And it's important to note what stage the business is in, in terms of earnings versus growth and what you're trying to lean int…”