Three Recently Acquired Seattle Startups, and How Their Founders Are Faring

10/23/09Follow @gthuang

Working for the man. It’s what most entrepreneurs want to avoid at all costs. But if their startup gets bought by a big company, that’s often just what happens—at least for a while.

Although the acquisitions market for tech startups has been relatively soft during the recession, there have been a few recent local examples to draw from. I took a highly unscientific sample of how three Seattle startups are doing post-acquisition. I wanted to hear about the cultural fit, the level of autonomy, and so forth. Not surprisingly, the ones I talked to said their transitions have gone very smoothly. Maybe the surprising thing is that I believe them (well, mostly—they did have to be pretty vague about future plans).

Here’s an update on the three startups and their founders:

Ethan Lowry, Urbanspoon (acquired by IAC in February 2009, announced in April)

The transition has been “remarkably uneventful,” Lowry says. “They’ve been very hands off.” He says IAC (NASDAQ: IACI) has been very supportive of Urbanspoon’s restaurant site, and that his team touches base with the mother ship once a week. “There’s all sorts of discussions before you get acquired. They say you’ll run your own ship…you’re kind of nodding, but what’s it really going to be like?” Lowry says. “I’ve been through other acquisitions that left you feeling more ripped out of your culture.”

He does say, half-jokingly, that Urbanspoon has gone through a “huge shift for us”—growing from three to five employees (adding a developer and a customer service person), and relocating to an office with a better view of Lake Union in Fremont, about a mile away from the old digs on Eastlake Avenue.

Last week, Urbanspoon introduced its “Scope” feature for its iPhone app, which lets you discover restaurants on the street around you by adding visual info to the camera feed on the screen. “In the beginning of summer, ‘augmented reality’ got a little bit of buzz,” Lowry says. “We thought, ‘This is cool, but seems super-gimmicky.’ We started prototyping something, and quickly discovered it’s entertaining. It’s fun, but can solve a real problem.” He adds that Urbanspoon has about 7 million installs of its iPhone app, making the Scope the biggest augmented reality app so far.

IAC’s future plans for the company are under wraps, but Lowry says Urbanspoon is looking for ways to take advantage of its relationships with CitySearch (an IAC property). “They’ve got a parallel audience talking about restaurants,” he says. “There could be interesting opportunities that come from that.”

Jordan Mitchell, Others Online (acquired by the Rubicon Project in June 2009, announced in September)

I reached Mitchell last weekend to ask him how being Rubicon’s vice president of data intelligence was working out, and what the Seattle team from Others Online is focusing on now. He gave me a quick update.

“I’m happy to say that the integration process (and things overall) are going extremely well,” Mitchell said in an e-mail. “We actually couldn’t be happier. The acquisition was part of an aggressive and strategic effort by the Rubicon Project to build out its platform, and deliver more value to premium Web publishers. So that’s pretty much what the Seattle team is focused on. We’ve been incredibly busy working with all of the folks in Los Angeles, New York and London, and find them to be a very gifted and capable team. And the Others Online technology was an integral feature of the recent REVV for Publishers product launch!”

Ali Partovi and Hadi Partovi, iLike (acquired by MySpace in August 2009)

MySpace’s purchase of Seattle-based iLike (for a rumored $20 million) left a lot of people wondering what would happen to the popular music service. It sounds like iLike’s founders are being taken care of, at least.

Last week, MySpace CEO Owen Van Natta wrote on his company blog that MySpace’s founders are being promoted to senior executive roles. Ali Partovi, iLike’s former CEO, will serve as senior vice president of business development based in San Francisco. “Ali’s deep understanding of the industry landscape will enable him to develop strategic relationships and widen our partner network,” Van Natta said. And Hadi Partovi, iLike’s former president, will be senior vice president of technology based in Seattle. “Hadi will bolster our Seattle-based development team, unify the MySpace and iLike teams under one roof, and grow the Seattle-based team behind some of our most popular products like Mail and IM,” Van Natta wrote.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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