title: "Episode 18: Special—An Acquirer’s View into M&A with Taylor Barada, head of Corp Dev at Adobe"
author: "Acquired"
source_type: podcast
content_hash: 06da2e03a15f7872f7b3950565ecff47b927478315b5865a0a22d3d4754d9e75
extraction_method: generic_website
Transcript:
(disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Ben: Welcome to Episode of 18 of Acquired, the podcast where we talk about technology acquisitions. I’m Ben Gilbert.
David: I’m David Rosenthal.
Ben: And we are your hosts. Today we have a very special episode that kind of breaks the mould of the show. We had an opportunity that we absolutely couldn’t pass up and even though we’re not covering a single specific deal, we think this is going to be a super, super interesting episode for listeners out there. So David, you want to tell them about our guest?
David: Yeah. We are lucky to be joined by a special guest today, Taylor Barada who is the VP and head of Corp Dev, Corp Strategy & Strategic Partnerships at Adobe. So welcome, Taylor. Thanks for joining us.
Taylor: Yeah. Excited to be here, guys. Thanks for having me.
David: Of course, a quick a background on Taylor. He joined Adobe in 2013. Before that, he was the VP of Business at Zynga and before that, he was also relevant to our show, Head of Corp Dev at Yahoo. He has a JD-MBA from Northwestern and after Northwestern, spent a couple of years at Bain before getting into the deal-making world and perhaps most interestingly, you are the first guest on our show who is a former professional athlete. Taylor played professional soccer or probably more accurately, football in England. Maybe we’ll get into that. Lots of deal-making in that one.
Taylor: Yeah, exactly. No, I would say looking back on it, I didn’t have the language at the time but there was no real US scene when I came out of college and so effectively I became an independent solo soccer entrepreneur. I had to go kind of figure out how to insert myself into the European game. It was an amazing life experience, but not always the easiest.
Ben: Yeah. Man, that could be like a whole separate episode. Probably not in this podcast, but I’m sure it’s a cool story.
David: So what we thought we’d do for this episode is kind of stick to our typical structure but instead, as Ben mentioned, talking about one acquisition in particular, we just thought we’d use it as a vehicle to, Taylor, get your insights kind of from the inside of being in Corp Dev and how you think about deals and acquisition as you’re going through them. So we have a bunch of questions but I thought we’d start with sort of the acquisition history and facts section, as usual. I think the best way to kick off would be something that probably most of our listeners are curious about and I’m curious about. How do conversations typically start between Corp Dev and startups? Either when you’re approaching startups or when they’re approaching you, what’s the beginning of the story usually look like?
Taylor: It’s funny. I think you guys even doing this podcast in this focus is, I think, filling a nice gap and need because it’s not something I spend a ton of time thinking about because at some point, it’s just sort of natural and it seems very fluid and relationship driven and not some big moment of, you know, “Hey, we’re for sale,” although those things do happen. It could be very sort of mystical and seem like this dark black art that I find sometimes that entrepreneurs, when it feels that way they tend to pull back and be very reserved because they’re not sure what they can and can’t say, and they always say the wrong thing and which is totally fair.
So on our end, what I’ve always done individually when I’ve been a deal lead and I want the culture I try to create on our group is that you remember that the process is fluid and it’s hard to know which ones are going to actually go the distance and lead to a deal and which ones aren’t. The Valley as we all talk about in sort of the broader technology industry outside of the Valley is incredibly small. So because of that, it’s very relationship oriented and because of that, the way these conversations often start is just literally a connection and like, “Hey, you guys are in this space. This company is doing interesting things. You guys should just get to know each other.”
I’ve always liked after stumbling across it at some point in the last couple of years, Mark Suster’s blog post on investing in lines, not dots. I think that his concept is that it’s very hard to make a decision when you only have one point in time but when you’ve had connections over time and you have the benefit of sort of seeing people say what they’re going to go do and hopefully go do it or something better, it develops credibility and you have time to sort of process and have a perspective on how it fits in.
Ben: Yeah. That original kind of introduction when someone says, “Hey, you know, this company is a newer company,” they’re playing around in sort of a similar space or similar customer segment to you guys. What’s the context for starting that relationship? Is it a partnership or is it just like, you know, let’s not play any games, we sort of know that there might be some acquisition at some point in the future? What’s the incentive for that entrepreneur to just kind of start that conversation?
Taylor: Look, you can waste an enormous amount of time if you just run around the Valley talking to all the big companies. Right? That’s not your job. Your job is to build value for customers and at some point you’re going to be able to monetize that value either through an IPO or the sale of the company.
With that as context, I think sometimes you get into a scenario of like – And I’ve had introductions where a VC was an investor in a company, trying to make an introduction for us and the entrepreneur told the VC who was on his board like, “Why would I even take that meeting? I’m not trying to sell the company. You know that.”
I’ve always found that kind of humorous because the whole point is, it’s like the old saying of “when you want money, ask for advice; when you want advice, ask for money” and that whole thing. If you’re calling us asking to be sold, it certainly can happen but if your first interaction is that, it puts an awful lot of weight on that interaction and it doesn’t need to be that way. I think it also ignores the point, which I always make and when we sort of talk about it over time as things develop, is that if you’re smart as a seller, you’re going to have a fiduciary duty to get the highest value you can for the business when it comes to that time. So that just is. But at some point, once the deal takes place, you and the team will be working there. So is it a place where you think your vision can not just sort of go and get parked, but hopefully can be accelerated. It’s not an end as much as it is a beginning. Are they the type of people that you want to work with? Do they see the world the same way?
Those things, sometimes you think like, “Oh, that doesn’t matter. We’re just going to sell to the highest bidder.” It’s like yes, of course, we get that, everyone gets that. But it doesn’t mean that you should ignore all other stakeholders, all other factors. The way you sort of sus those out and frankly due diligence on us and other places and try to see whether it feels right is by getting it out to people over time. So I actually think it’s best when it’s explicitly not around a specific conversation. It’s certainly fine if there is a specific partnership that seems very interesting with the big company, but those also can be colossal waste of time. Every small company thinks that every big company is the keys to the kingdom and a partnership with them will unlock everything. But oftentimes they take a very long time to get done. Once they’re done, they take a very long time to mature. And the ones that are truly game changing for startups are few and far between.
So it doesn’t mean you shouldn’t do them. It just means you have to be pragmatic about what you should expect from them. So if there is a partnership you want, we oftentimes act as sort of a concierge into this wildly complex 15,000 person company which we sort of know how to navigate and from the outside it’s probably extremely hard to figure out who to get to if you want to talk about partnership around one particular product line. So we can definitely do that. But like I said, I think it's best oftentimes if it’s much more open-ended and it’s just, “Hey, we're in this space. We’d love to meet this VC that we both know. Thought we should get to know each other. Not looking for funding, not looking to sell but would love to grab coffee and just talk about what we’re doing.”
David: It’s amazing as we're talking about this and even as we are preparing for the episode like how much this mirrors the process of raising venture capital too, which to be honest, it's an education for me. I never really thought about but we coach our companies when they’re thinking about racing around all the time. You’re always racing. You’re not always closing, but you’re always racing because it takes time to build relationships and VC investors, as you point, the Suster blog post is great about needing to invest in lines, not dots. Occasionally there will be a dot that is so compelling you have to invest in or it would seem for you guys, you have to buy. But it takes time to build these relationships.
As you’re doing that, maybe talk a little bit about kind of the importance of culture and that relationship and the people fit? I know it’s something that’s really important to you and Adobe. How are you assessing that when you’re talking to entrepreneurs?
Taylor: I’d say Adobe, it’s uniquely important to us and we’ve walked away from extremely large deals north of a billion dollar because we didn’t feel like the culture fit was there. Part of it just has to do with how we think about what we’re doing and what we think has made us an enduring business over 30 years in a really dynamic space. The company has morphed from post script and printing tools and things like that into desktop publishing and then creative tools and now into marketing.
David: [INAUDIBLE] an acquisition a long time ago.
Taylor: Yeah. Again, that’s somewhat unique and my understanding was it was a couple guys and a product. But yes, the nascent piece was there and then they built around it.
Ben: You talked about the qualities that you look for when you’re acquiring someone to be a culture fit. How does that impact the outcome of the acquisition? And is there anything specifically that you sort of look for as okay, this is going to make this outcome financially successful for Adobe because this person has X mindset?
Taylor: I think it's definitely related. I always say we don’t care about winning the press release. You create value and one of the reasons why value in companies is not science in a strategic acquirer scenario versus a private equity and whatnot is that look, even in private equities, this is really true if you get down to it, is that you’re valuation becomes because of a present value of your future cash flows. Like what drives what those future cash flows is what you actually go do in the market together. Inevitably, we’re not like a holding company that’s just going to buy great properties and let them roll. We’re trying to have a point of view around the market and say, “Hey, look. We can come together.” And maybe it’s not 1 and 1 equals 3, but there’s some sort of element of that overused word of synergy and we're looking for leverage and looking for a perspective that we can accelerate the vision of the entrepreneur but also frankly accelerate our own vision and hopefully even broaden it at times just as we did when we went from creative to marketing with the Omniture acquisition.
So the reason it’s so important is that if you have an incredible strategy and an incredible vision, we all know it’s meaningless. It’s about execution. Big companies are no different than startups in that effect. Execution creates value. Strategy is what allows you have the opportunity to get into that mode. But you got to go do it. I think the one last thing – and we’ve touched on this a little bit when we were catching up before the call – is that to me, if I had to pick one hallmark that gives me a sort of good positive early indicator that we’re on the right track is when I start to see through the back and forth and comparing notes on the strategy and the vision that this concept of accelerating the entrepreneur’s vision around where they’re going is there but that’s not the only thing. The other thing is they actually start to embrace the broader vision that we have and say, “You know what, I actually think I can expand your vision and I want to get in. If I can work with you guys on that, I can do something bigger.”
So oftentimes you’ll see over time that the deals that work really well and where it particularly works well for the founders or CEOs is where they end up loving the concept of getting inside a bigger company and maybe they’re really product people and all this raising money and also their stuff is part of what they have to do but it’s not what they love, and often they’re unleashed and they can just go do what they want and spend all of their energy there.
Whether it’s here or to the smaller deals I did while I was at Yahoo, one was for a company called Citizen Sports – founder name is Mike Kerns. He founded that company with another guy named Jeff Ma who’s well known from Bringing Down the House days and all that from MIT. So Mike came in and just did phenomenally well. And then another was a company called IntoNow that was founded and spun out by a guy named Adam Cahan. Those two guys stuck around Yahoo for – Mike just left about a year ago and I think Adam is still at Yahoo and they rose to be two of Marissa’s SVPs of Product. And these were smaller acquisitions so it’s not like they came in the door doing that. But they had a real passion for sort of online media and where it could go and sort of not just what they were doing with their product but what you could do if you applied some of the principles of social and mobile to the broader Yahoo business. We’ve seen the same thing here at Adobe and I think it's a classic sign that things will work out quite well.
David: It’s really cool to hear you talk about that. In one of our early episodes we had Kurt DelBene from Microsoft on and we talked about the Acompli acquisition. He talked about this very fact that one of the things that Microsoft is thinking about now in terms of M&As is just what you’re talking about, about the people and the culture fit. Kurt is now leading the LinkedIn acquisition, which is much bigger and more complex. But for Javier Soltero at Acompli, he’s now running all of Outlook and exactly mirrored these themes.
Let’s move on. So we sort of break acquisition history and facts into two parts, and my favorite part is sort of the stories of the acquisitions sort of what we’ve been talking about here. But I bet a lot of our listeners will be really curious about like what’s the process. Once you’ve realized that there’s a relationship here that could bear fruit, what are the steps in the process when you’re actually working through a deal at that point from LOI to term sheet to definitive agreements? What are the key milestones for you guys?
Ben: Yeah. And what specifically are you looking for? Is it cool, the financial, check; cool, there’s no lawsuits against them, check; cool, your product is growing with users, check? Those sorts of things.
Taylor: Look, ultimately you’re going to do a deal if it makes strategic sense. The technology product fit is there and the financials you think makes sense for your shareholders, right? For us, the fourth one that I would put over, that cuts across all of that is just the people as we’ve already talked about.
So the hard part about the deal is these are all – Even though we have a “process” and every large acquirer is sort of a repeat player, so all the places that I’ve been and done this role are definitely in that and the other ones are people like you've mentioned, so Microsoft, Oracle, Facebook, etc. Repeat players absolutely have a process and there’s different flavors and each company has different places where different types of decisions either take place or which parts of the org are responsible for them. So there’s definitely a number of different ways to do it.
But every deal is its own sort of perfect snowflake. They’re all snowflakes and so they’re deals and there’s unbelievable correlations from them and when you get into the granular, everyone is deciding ‘we’re going to make this happen,’ it becomes kind of a machine and the legal side and the diligent side starts to take on a life of its own and that really does happen. So I would say in general this is tough because on the outside particularly if you’re not going through a hardcore sort of auction process and a hired bank or whatever, but it’s a place where you sort of think, “Well, look. We're not really for sale but they seem to be interested so I’m open to doing this but I don’t want to sort of waste all my bandwidth and emotional energy in sort of exploring this and how we would do it.”
So typically there’s usually an early meeting with someone in the business unit that’s responsible for the product area where there is the strategic interest and the overlap, and try to get an understanding for the product vision, the product technology, give maybe a bit of demo, a little early point of view on numbers. I think sometimes it can be tough to decide when do you share what. I think we’re always finding if an entrepreneur feels like they want to get an NDA in place before they share some financials and things like that, we tend to try to make sure that we kind of have checkpoints like if we get someone who’s trying to sort of take a read on the market because they’re about to do a fundraising around, they just figured they better think about it and they want to talk a handful of people that are sort of the logical fits for that business and say they decide we’re one of them and then sort of check in with us, we will oftentimes do at least one call without an NDA where we just sort of say ‘tell us the story and we’ll go through that.’
So there’s sort of a high level business product check early on and then at some point you start to kind of have a feel for the financial side as well as you go through that. The biggest milestone you’ll find with large acquirers is kind of the LOI or the term sheet, and that almost always – and I truly mean almost always– includes a no-shop provision of some period of time. Typically, sort of 45-60 days, sometimes 30 days. Those are the types of things where once you get to that stage, you’ll have a lawyer involved and they can advise you what is “market”.
Ben: Just like in venture financing. Funny how that parallels.
Taylor: Yes. You’re going to have your lawyer and they’re going to be able to tell you what’s “market”. They’ll educate you on what the business ramifications are of what is being done. Every big company has slightly nuanced ways of doing things and because we are repeat players and the lawyers are repeat players, there’s certain things where it’s basically like, we’re not going to do that because of the precedent of it and that type of thing.
Oftentimes those are but depending on where the leverage lies, depends on how much those things get negotiated by the buyer and the seller, again, exactly like a venture round in that respect. Then once you get through that, that’s when you see the circle of knowledge on both sides expand but particularly on the buy side, sometimes it can be overwhelming because then we’re going to jump in and do a day minimum, oftentimes two or three days of kind of a deep dive, take us through the business, beginning to end in terms of going through the product and going through the go-to market, go through the financials, go through the operations, go through the technology architecture, etc. Then that’s when you build out a very detailed data room.
And I think with the super early stage companies, sometimes you’ll run into some issues where they didn’t have their house in order to get good legal advice early enough on and maybe they’re working with a couple of outside agencies and they didn’t have them sign an agreement, that type of stuff. Those at this point, I saw that more 10 years ago than I do today. I think the breadth of startup legal advice and sort of smart experienced Angels is certainly the venture community, people tend to have a pretty buttoned up shop particularly if they’re venture-backed, and things are pretty clean. But if you’re outside of the Valley and maybe the company was lucky enough to grow bootstrapped or whatever and they kind of just made it all work, every now and then you’ll run across things where they didn’t have their house in order and then it’s rarely a deal killer but it usually ends up as something that you got to sort of work around.
So you drive through that, at some point you put in place a definitive agreement where our lawyers will put together an acquisition agreement depending on if it’s a share purchase or an asset purchase, etc. and you kind of go back and forth on that, try to get if finalized and ultimately deals are announced once the definitive agreement has been signed and then there’s a question of is it a simultaneous sign and announce and close, meaning we signed it, we sent the money, we own it. Or is there split sign and close where we sign it, we announce it, and then there’s 30 days to meet XYZ closing conditions before we would actually close. You’ll see both.
Ben: You mentioned throughout all these steps, there was one point in there where the business owner talks with the company they’re acquiring and compares vision and strategy and digs in with Corp Dev. How involved is the business owner throughout that entire process? Are they in every single meeting? Are they in that first meeting? Is it the business owner that first contacts that company? What is their role and what is the role of Corp Dev throughout the entire acquisition process?
Taylor: It's critical. One thing to know is you can’t ignore Corp Dev. In many ways they’re going to be your guide and your partner throughout this, and I truly view it as a much more collaborative thing. If you’re going to get a deal done eventually, it’s going to be because everyone thinks it makes sense and you’re able to get together at a valuation that everyone feels good about, right? So I very much try to make it clear to people and make sure that our deal leads make it clear that no one can “make you do anything you don’t want to do.” So that is one thing I think out of the gates to kind of demystify the whole process and take a little pressure off.
The relationship with the business owner is critically important. I mean the language I use, and again, every company has sort of slightly different ways of thinking about this, but I think of it as there’s an executive sponsor and there’s a business owner. Oftentimes you will see particularly if a company has kind of got some VC intros and things like that, they will be really focused on trying to get in to meet the CEO or could get to meet the head of the whole business unit.
David: I’ve never been guilty of that.
Taylor: Yeah. And it’s fine. Everyone gets it. It’s the old thing of coming high and worked down. Sometimes it can be fine. Other times it can be either off-putting or even sort of counterproductive in that if you get in front of them too early before then business owner and corp dev have been able to kind of frame it and sus out in combination with you sort of your business well enough, then we can effectively translate and help people understand why this is exciting, why this matters. They might take one meeting and are like, “Ugh, I was not interested.” Then it creates this uphill battle where corp dev and the business owner are like ‘no, no, no, we got to spend a little more time on this. This one’s interesting.’
David: I’ve seen this play out. It’s so true.
Taylor: So even if you got this perfect ‘hey, my venture guy says he is golfing buddies and best friends with the CEO or whatever,’ it’s just a card. I generally just sort of say play it straight up, play it open and then treat the corp dev person and the business owner as people that are your partners to figure out whether this makes sense. Not someone who you got to kind of like micromanage and things. Ultimately it’s not like an enterprise software, sort of SaaS, you’re going into an IT group, they’ve got a need or a widget, you got a widget, you’re going to sell them on why yours is the best and then wham, we’re done, like get it done. Right?
It’s a very subtle collaborative dance where both sides are evaluating each other and getting to know each other. It’s sort of overblown to say it’s a marriage but look, you’re selling your baby that you put heart and soul into creating. You want to find out if we’re good stewards of it, if our visions align, and you should care about those.
David: It’s so funny going back to the parallels with venture. I mean it just keeps coming up. We see companies make this mistake with us all the time. They come in, they meet with one partner and that relationship is progressing at a natural pace. Then in the worst case, the founder CEO but oftentimes one of the other venture backers or somebody will come in and talk to another partner. We call it partner shopping and like nothing will kill a deal faster than that.
Taylor: There’s less issue of that here because we’re not a partnership. There’s a natural organizational structure to a big company.
David: But you’re still going to somebody you think has influence but actually there’s no context on the relationship and back to that being the most important thing. I can totally see how that can blow up deals.
Taylor: Exactly. It really blows up deals and that’s the other thing why I say like there’s almost no misstep that you can’t get over if actually it makes business sense. That’s the other reason why I say getting people the mind space of like you’re building a great business, you’re going to get the eggs that you deserve and we’re looking for a collaboration to figure out whether we’re the right home for it. It takes all the pressure off because the real answer is you don’t need to micro manage and over manage it. We do this off all the time and if we’re approaching you with that mindset, like we’re in it together to figure out. Because the biggest reason people do that is because they’re in value optimization mode in the back of their mind, I think, I got to maximize value. And it’s like yeah, totally, it is literally in the by-laws. It’s your fiduciary responsibility, right? We get it. So it’s part of that. But if you over manage that and over play it at the wrong times, it comes across awkward.
Again, if it actually makes sense, you’re probably going to recover from it. So even if you do, it's not that big a deal. Like I said, I’ve never not done a deal but I’ve had deals where it was much harder to get there because someone figured out some way to get in front of either the CEO or some other head of a business unit or something earlier than we probably would have ideally wanted. Or sometimes it comes in that way and that’s fine too, but then people got to do their job. Where to bring that whole thread back around to the core question that you asked – I think it was Ben – the business owner of that sort of head of product is actually an extremely important relationship as well.
Like you should have a sense of if you were king for a day and ran that business, where would you think that the startup that you run fits in. And then how do you figure out who’s responsible for that part of the business. That’s absolutely just as important a relationship. I would never say only focus on that relationship and ignore corp dev but I also would never say focus on corp dev and don’t worry about that relationship. You kind of have to have both and sometimes, again, this probably also is like the venture. It’s very organic and wherever you have an in, a warm intro, take the warm intro and then ask the questions of ‘hey, should I talk to someone in corp dev or whatever?’
I have business unit partners who are very sophisticated of sponsored deals many times and part of the job of being a good product manager, let alone a business unit product owner or GM is understanding the outside market and knowing the ecosystem that you’re in. So they should be out there meeting startups and stuff. So oftentimes they will meet someone and they’ll hand it off and say, “You know what, I’ve met with this guy once or twice for coffee. I kind of like where he’s headed. Nothing to do here. I’m not looking to do it. He’s not going to sell. But I just kind of want to get him on Corp Dev’s radar. Can you meet with him? That type of thing.”
Other times, we’ve partnered with the business unit to develop a strategy overall and we kind of know the spaces that we're sort of particularly interested in and we’ll find the relationship or company, and we’ll get intros and we’ll pass them through.
I think that is one difference between the VC and M&A world is that sourcing is not some big magical thing. Every now and then we’ll find something that we didn’t expect because we’ve made an extra effort to get out and beat the bushes. But we’re out there in the market. There’s only so many acquirers. People find us 9 out of 10 times.
David: If you’re lucky as a VC firm, you also are in that position. Most of the time they’re lucky but…
This might be actually a good way to transition into sort of the next category that we talk about on the show is acquisition category. So every deal that we look at, we say was this a product acquisition or a business line acquisition or a people acquisition. We’re curious on your end like do you guys do the same thing or is it more organic like as you’re looking at different companies and then they tend to follow? Are you guys thinking like “yes, this is definitely an acquihire” or like, “oh, this could be a huge business line acquisition”? How is that going through your heads?
Taylor: There’s industry standard lingo. Acquihires, tech and talent deals, whatever sort of business acquisitions or product acquisitions, those types of things, I’ve heard those used. We’ve used those all the time.
We don’t get too hung up on it. One construct I’ve used inside of our business is – from my Bain days, I’ve had respect for some of the profit from the core analysis and they’ve done… There’s a book written a number of years ago called Profit from the Core and they’ve done analysis of 2000 companies and growth initiatives, both M&A and otherwise. The concept was that once you understand what your core business is as a large scale company, understanding the business that drives the most profits and sort of the most enduring from a perspective of who is the customer, what’s the channel of the market, what’s the geography you’re playing in, what’s the business model and what’s the product.
Any time you change one of those five things, you’re like a one step adjacent, so you’re further from the core and it creates risk. Actually they show through analyses of all these different companies that once you got – I think it was one step adjacency was maybe about a 30-40% chance of success but once you got out, like three or four of those things changes, you dropped off to like 10% chance of success. It doesn’t mean that you don’t take things that are multi-step adjacencies because sometimes those are where the biggest opportunities are. But you have to make sure that they’re worth the risk. Otherwise, you’re just leading to sort undisciplined diversification and you have no better chances of success than just a private equity investor or holding company and probably less because it’s not really how your business has been set up to focus the resources of the company on. Right?
So something like Omniture, we’ve gone back and looked at that in hindsight and that was probably a four-step adjacency. Anyways, it was SaaS, completely new product. It was an enterprise selling motion which we didn’t have in mature fashion at that point and in the business model in terms of recurring revenue was new because we hadn’t moved to that with the creative side of the business. It was after that that we moved from creative suite to creative cloud. So that was in hindsight a very risky big bet, but it was a large big business. It was the market leader, it had real momentum and so you can make that bet and then if you focus on the rest of the things, you could control what’s ended up being a $2 billion plus – it’s on the road to being more than that – business force.
So it’s not that you don’t do those things but you do them for the right reasons. So as you think about that, things that are in your core like meaning we're already in that part of the business, that’s where we're more likely to look for some tech and talent, smaller kind of deals, or we look for like a little bit of a core expansion where it’s kind of like a one-step adjacency where maybe we get a new product with a bit of a business around that’s been proven in the market but it’s not scaled yet. We bring that in and we scale it. The marketing caught them anyways. After the Omniture acquisition, there were a number of other add-on acquisitions that were done to broaden out the product portfolio and then sell through the same channel.
In the enterprise space in particular, you've seen that year after year. It’s extraordinarily and perhaps not even appreciated how unbelievably hard it is to build a true large scale enterprise sales force. The companies that have done that, it's such an unbelievably huge investment over like probably a decade to get there. That then it’s a question of how do you maximize the throughput of that channel every year and so finding additional products to put in the salesperson’s bag is a big part of it. So on the B2B enterprise side, that’s a big deal. On the consumer side, it's a slightly different element in terms and predictably all the networks and everything, with the social networks and platforms we’ve seen have changed the dynamics there a bit. But historically that was a little bit of Yahoo’s original strategy was, ‘okay, we have this portal. Let’s just keep adding on things.’ That was before my time at Yahoo. But you see the approach driven by the business strategy and at Adobe, my personal sort of belief is that it has to be a strategy-driven process. So the categorization of what you’re going after is driven by what you’re trying to accomplish strategically.
Ben: Cool. Moving on to our next segment, we always talk about what would have happened otherwise and it’s the part where we try and figure out if this deal didn’t go through or were there other acquirers, or would that company have grown on their own. I feel like a good question to kind of dive into there is what percentage of deals that you look at actually end up happening?
Taylor: It’s very low. It’s a question of what “look at” means, right?
Ben: Yeah.
Taylor: We’ve historically done sort of 4 to 10+ deals a year. I think actually the market strategies are sort of strategic umbrellas big enough to do meaningfully more than that, but we’ve kind of intentionally focused on strategy that says we’re going to make sure that the ones we do are going to work. We’ve had bankers come in and be like, “What are you guys doing? How do you do it?” Because everyone around the Valley is sort of saying that the ones you’re doing seem to be working and I think a lot of it is just the willingness to say no. That starts at the top and we have a CEO, Shantanu Narayen, who I describe as having founder level passion. He’s been here 19 years. He’s been CEO for 9. No different than a founder who just feels it in their bones and feels that level of passion for protecting the mission and the vision that we're going after.
What that means is it's a very high bar on what makes it through the rubicon of strategy fit, tech fit, team fit, financial expectations, etc. So you have to be willing to say no and in order to make sure that you get the right ones. You have to be careful that that doesn’t make you risk averse and not moving quick enough and fast enough. But I wouldn’t even know how to put a percentage on it but I would probably say sub 10%. A lot of things have to align to make a deal happen on both seller and the buyer side. So you’re probably looking at that, but plus or minus a thousand inbounds a year. We probably get 2 to 5 emails a day with, “Hey, would you be interested in checking us out?” that sort of thing.
David: There are a lot of those.
Taylor: I mean a lot of those, the answer is again, no different than VC. For us, it's just like “Hey, that’s not a fit but I appreciate you thinking of us.” We try hard to give quick answers and quick no’s if we just don’t think it’s worth it and we don’t window shop. If we take a meeting, it’s because we think it could be interesting.