Joining Forces: A Guide for Post-Acquisition Integrations

Lessons from merging Back into Personio

Acquisitions are hard, but post-merger processes are even harder. Today, I'll frame some of my learnings into an easy framework.

In 2018, I started Back to build an operating system for internal processes. Last year, we got acquired by Personio. I keep hearing horror stories from founders and VCs about the aftermath of acquisitions. Almost all of the team left. Founders quit. Culture clash.

Today, over 14 months after the acquisition, almost all folks from our small team at Back are still with Personio. I want to break down how we have retained the team to date, enabling us to relaunch our product within a few months and build exciting new products.

As startups navigate a (more) challenging fundraising environment, we may see more acquisitions in the next 2-3 quarters. Since only a little is written about startup PMIs, I want to lay out a small framework based on our experience with Back.

Personio co-founders Hanno and Roman at the Back HQ pre-acquisition

#1: Understand culture early.

Figuring out how culture differs between your team and the new environment is the #1 key for navigating any exit process. Map values and ways of operating against each other. Bonus: show them to your teams.

Culture was the key consideration for us as founders - next to the continuation of our product vision. So we spent meaningful time in the due diligence learning about each others' values and operating principles. Both sides had a good view of the many areas we overlapped and where we differed. This understanding enabled all other steps later in the process.

#2: Build a custom onboarding track.

Next, design a custom onboarding journey together with the acquirer’s People team. Don’t treat the team as regular new joiners.

First, we had settled on the timeline for our team would join Personio. Then we pulled together a custom-built roadmap covering the first weeks and months. It included a visit of the co-founders Hanno and Roman to the Back HQ, workshops on our cultural overlaps, and a cross-functional buddy system. I had three (!) buddies from different parts of the business.

A peak into some of the custom onboarding track

#3: Bring everyone together.

The custom track also included bringing us on location with the Personio teams. Nothing builds trust quicker than in-person gatherings.

With a bit of lucky timing, Personio had planned a party to open their restaurant again after Covid. This was the perfect opportunity to bring the whole team to Munich. We ran an on-location onboarding day and got to know new colleagues over drinks. Knowing Personio has an awesome vibe at their offices, this made everyone excited for new adventures.

#4: Keep (some) culture.

Acquired startups usually integrate into the new culture one way or another, even if they continue to run mostly separately (ask Nest).

Don't be an alien team that does everything their way (why join someone else then?). Still, it's worth sticking to some of your old rituals and habits for a familiar environment in the transition. Since Personio had moved their All-Hands to Thursdays, we kept a remote check-out for Friday afternoons with the old team for a few months. Within functional groups, we used the transition to reflect on what ways of working we love and what we can improve. This allowed us to bring in the best from both worlds.

#5: Support diverse career paths.

Retaining the team is more important than sticking them to their old roles: don’t be afraid to mix and match.

Many of the Back team still work on the same vision we laid out with Back. Either specific on our products that we relaunched or new ones in that area. However, some moved into other opportunities within the company, and that's fine. We went from a time of 20ish to over 1,000 at the time of the acquisition. Understanding each team member's concerns, goals, and aspirations was vital in transitioning their contracts and retaining key employees.

Bringing the team to Munich, with some of them on stage

Much value can be created from startups being acquired and succeeding in their new environment. I'd love to see others build and iterate on this framework. What are your learnings? Please reply, and I'll publish a v1.1 soon.

PS: This was the first issue of my new newsletter project. Please leave me feedback! How did you like the issue? What topics are you interested to learn next?