Why we turned down $100m for our business
6 min read
02 March 2016
It's the moment every entrepreneur dreams of, when someone comes along and offers you a nine-figure amount for the company you've shed blood, sweat and tears for. So you'll probably be a bit surprised that my co-founder and I turned it down – but here I explain exactly why.
Running a business is in many ways, like going on a long journey. You meet all sorts of challenges along the way such as heavy traffic, taking the wrong turn and having to stop to refuel. You can’t wait to get to your final destination but when you get there strangely you are driven by a desire to go further.
While you might not have heard of PCA Predict, nearly all of you will have used our services before as we provide the “what’s your postcode?” technology that is used as much as 20m times on a day to help quickly fill in your address details when you buy from your favourite retailer.
Over the last two years we have developed a new service, called Triggar, which takes advantage of the onsite presence and data insights that we capture from our customers. Triggar uses machine-learning technology to understand how individual users navigate through websites. It aims to improve the customer journey and conversion rate by detecting changes in behaviour and altering the experience to keep the shopper engaged.
Struggling to make headway
While it was always our intention to take Triggar to market using the funding and extensive contacts that we have through PCA Predict, we struggled to make any real headway. Partly because the technology required to deliver Triggar is very new and complex but, most of all because those we approached struggled to appreciate what we were trying to do and frankly weren’t prepared to be our guinea pigs.
It was around this time that we were approached by a potential buyer for PCA and given the option of selling – which would have allowed both teams to focus on their own businesses. Coupled with the difficulties we were having in getting our PCA customers interested in Triggar, we started a lengthy discussion process which resulted in a cash offer of around $100m for PCA Predict.
But we turned it down on the basis that we felt that we had unfinished business and that we would be better together than going our separate ways.
So what changed?
In brief it was the understanding that while we had a great business, we only had a “skin deep” relationship with our customers, as it’s their customers who use our service and with the exception of any problems – they seldom need to speak to us.
By understanding that if we could fix that problem by finding a much bigger overlap between the services that we offer through PCA and the new services provided by Triggar, then we would have a fantastic opportunity to provide a much more complete product vision for our existing 10,000 customers and develop a far richer experience and relationship with them.
Simplifying Triggar to provide a basic alerting service that provides them with real time performance statistics on their website and quickly fixing issues that need attention, has helped to bridge the gap and provide the first step on what we hope will be a significant opportunity to develop a much deeper relationship.
Read more about PCA Predict:
- How different businesses have implemented employee shareholder schemes
- Why Postcode Anywhere decided to become an employee-owned business
- How I expanded my business to the other side of the world
Chicken and egg
The decision to pull out of the sale was also made much easier by understanding that for Triggar to be most effective it needs lots of data. However, to do that you need lots of customers that are generating lots of data, but to get the customers in the first place you need to be able to demonstrate value you’re providing from the data. It’s a bit of a chicken and egg situation.
We already collect a significant amount of data through the onsite presence that we have with our customers, however, it is mainly limited to the checkout page. By simplifying our tag and giving our customers a good reason to include it throughout their website we could not only provide them with a better service, but also start to collect much richer session data which would improve Triggar.
The end game
Walking away from a large sum of money has been very uplifting. I personally feel that growing a business is not just about the money. It’s about creating something that has an impact on people’s lives. It’s about building something that your employees care about and that your customers trust and believe in.
And if the renewed energy and drive that we’ve seen in the company since we announced that we were planning to stay together is anything to go by, we have definitely made the right choice.
Guy Mucklow is co-founder and CEO of PCA Predict.
If you’ve enjoyed the PCA Predict story then why not find out why it, and four other businesses, decided to undergo a rebrand and change name.