Deciding to sell your company is not easy. Deciding not to sell it might be even harder.
BuzzFeed founder and CEO Jonah Peretti knows the difficulty of this kind of decision: he turned down an acquisition offer from Disney in the final hour, walking away from a big buyout and taking a risk on his startup.
The risk and hard work required to avoid failure are key points of the startup experience, he said.
During an interview for our podcast, “Success! How I Did It,” Peretti told Business Insider that creating a startup is harder than it looks and should not be viewed as a “get rich quick” scheme.
“I think you shouldn’t be a CEO or even a startup executive or employee if you don’t like things that are hard or challenging, and you don’t like trying to do things that are difficult where you have to figure out new things that don’t exist yet,” he said.
People who work in startups should think the changing technology and business environments are part of the fun of building a company, not view them as problems to be avoided by selling as quickly as possible.
When it came to Buzzfeed, Peretti explained that deciding whether or not to sell came down to a gut feeling.
“Some of these things come down to almost an emotional feeling, but I think that the gut feeling and emotional feeling actually is informed by a lot of data and looking at things in a rational way,” Peretti said.
“It felt like there were a lot of shifts coming, and there would be a lot of opportunity … There were a lot of things we wanted to do, and remaining an independent company just in my gut and my bones felt like the right path.”
And if you love the company you’ve built, Peretti said the idea of selling becomes much less appealing.
Here’s the portion of the Q&A with Business Insider Editor-in-Chief Alyson Shontell:
Alyson Shontell: One thing that happened as a result of all this success is that you had outside parties interested in Buzzfeed and potentially acquiring Buzzfeed. One tough decision that you have to make as a CEO is, do you stay the course or do you exit? It’s been well reported now that Disney was very interested in buying BuzzFeed a couple years ago. In the final hour, you decided not to sell. What was that process like as CEO? How do you walk away from all of that money that’s right there, dangling like a carrot?
Jonah Peretti: Some of these things come down to almost an emotional feeling, but I think that the gut feeling and emotional feeling actually is informed by a lot of data and looking at things in a rational way. The biggest thing for me is that I felt we had many more things to do as a company, that we valued our independence a lot.
It felt that we would be able to do a lot more as an independent company. If you think about the time when we had some conversations with Disney, we were just hiring Mark Schoofs to lead our investigate journalism team. That was just starting. Video we had been doing for a little bit but it was growing and we knew that it was going to be huge.
Now it’s more than half our revenue. We knew it was going to be huge, but at the time people thought BuzzFeed was just a website. It felt like there were a lot of shifts coming, and there would be a lot of opportunity. There were a lot of things we wanted to do, and remaining an independent company just in my gut and my bones felt like the right path.
Shontell: Since then, the media industry has changed a lot. Do you ever think, “If I had just sold to Disney, I wouldn’t have to figure out this video thing. I wouldn’t have to do all these things in the industry that are changing so much”?
Peretti: I think you shouldn’t be a CEO or even a startup executive or employee if you don’t like things that are hard or challenging, and you don’t like trying to do things that are difficult where you have to figure out new things that don’t exist yet. That has to be part of why you do it. It has to be part of the fun. They say when there’s a bubble or lots of money flows into startups, you have a lot of people who come in because they want to make a lot of money.
The whole get rich quick thing. “I want to do something where it doesn’t take that much work, and I’ll make a lot of money.” I’m reading stories about startups and all the money in startups. It’s just a lot harder than it looks. Harder meaning the day to day is trying to create something new and trying to be a small little guy in a giant industry.
Even now, we’re 1,500 employees and growing quickly and things are going incredibly well. But when you compare that to the size of Disney or Time Warner, we’re small. When you want to work in a startup and build something, it’s going to be really hard.
If you love that, if you love the struggle and that’s part of why you do it, it also makes selling a company a lot less appealing. Because if the idea is you’re doing it so you can relax, you wouldn’t be building the company in the first place.
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