Last April, Edison-based RightAnswers was sold to Upland Software for $17.2 million in cash at closing, a $2.5 million cash holdback and an earnout component. RightAnswers had a cloud-based knowledge management system used by customers to help streamline their customer support operations. The company was founded in 2001 by its chairman, Mark Finkel. In this article, we interview Jeff Weinstein, who was president and CEO of RightAnswers from 2002 through its acquisition.
So why was this the right time to sell RightAnswers?
The company made incredible strides over the years in our solution, and in the process we earned the business of so many significant global name brand firms that this was a difficult decision to make. Ultimately, for RightAnswers and its brand to grow and expand at a greater pace, we needed to leverage the muscle that a larger firm could offer. To win more new accounts faster, expand the solution opportunities quicker and provide existing clients with new levels of customer care opportunities, our board believed this was the right path for the firm to take.
Did your buyer approach you or were you up for sale?
We were approached several times over the past three years by a number of different types of firms. Both RightAnswers and Upland were looking for a strategic partner during this time period.
What did you do to make sure this was the right match for the company?
There were some main elements that we were balancing and weighing as we considered offers: the value placed on the firm, the financial complexity of the acquisition, what this meant to the RightAnswers brand, what type of career opportunities this presented for our existing management/staff and how this would impact our clients. We felt good about this event with Upland in all cases. In April 2017 we had about 55 people and Upland was roughly at 325 people, so we felt our employees would not be lost in the acquisition. We also felt that employees would be presented with good career opportunities at Upland, and it would put our talented team in a position to take their careers to the next level. Upland also valued our team, not only in the US, but also those individuals that worked for us globally, which was important to us.
Regarding our technology, RightAnswers solutions were complementary to Upland’s current solution set, so we felt our existing customers would have opportunities to expand into other areas and gain value from the other Upland products. Additionally, from the customer viewpoint, our teams were clearly aligned in how we strongly valued our clients. Both firms strived for 100 percent customer satisfaction and 100 percent customer renewals. That alignment in philosophy made us feel comfortable that all our customers and people that we have been working with over the years would be getting the right kind of service and attention.
Did the company stay in New Jersey?
Upland is headquartered in Austin, Texas, with staff throughout the US and the world. They have a number of offices throughout the US, and much of their team does work virtually. With that, they have really invested in operational virtual infrastructure solutions that enable remote staff and teams to run smoothly. Upland does have an office in nearby Woodbridge, and although most of the RightAnswers team decided to work from their home offices, they do have access to that facility. RightAnswers had about 40 people working out of its offices in Metro Park, and during our time there, many would work a few days per week virtually. Leaving our Metro Park office, although symbolically difficult, was not a hard transition for the team to make. Previously, if team members were more than an hour away, we didn’t expect them to come into the office all the time. We wanted people to come into the office a couple of days a week, but we were flexible. We were supporting clients globally, and in different time zones, and with our team putting in sometimes long and strange hours, we wanted to be both realistic and sensitive to how that impacted our staff.
Please discuss some “lessons learned” from selling the company.
Well, one of the things we could have done better is anticipate the additional vectors and metrics around data that a potential buyer might want to use to evaluate us. The metrics on how a company is running and measuring itself quarterly can sometimes not be as broad as a buyer wants to see. So, having the right systems in place around financials, customers, sales and marketing, so data can be easily pulled and combined with other pieces of data, was important. There is a such a high degree of due diligence being performed that you want to be ready for the standard and ad hoc requests that occur during the process. I thought our team did great work here, and at the same time, Upland was very experienced in what they were looking for, while being patient with us in responding.
After the sale, you spoke about market fit and why RightAnswers was the right market fit for them. Can you elaborate?
Upland was interested in us for a host of reasons, as our solution set was able to fit into a couple of lines of businesses they were building out. They valued our client base, which included enterprise implementations across many large and terrific clients. Technology-wise, they are focused on SaaS-based firms, so our solution, subscription model and solid client renewal rates clearly aligned with how they wanted to build out their business. I think that the alignments in solution fit and business model helped them in their excitement for us, and it made us enthusiastic that our people and technology would have a significant place inside Upland.
Is there anything else you’d like to share?
The board and I were especially thoughtful and introspective during this whole process. We looked at this from the employee, customer, and shareholder’s viewpoints, and thought carefully about who the acquirer was. It was not an easy decision to move to this next phase because of the success we were having in the marketplace. The whole team worked hard to get our company to a great spot, and RightAnswers had become a well-respected name in the industry. And to not continue on our path was a very tough decision to make. We had built a great company, and at times it felt like it was us against the world – and winning in that world felt great.
Some might think it’s easy for the company executives to sell their firm and let go of a company they built. I’ve been involved with three companies that have been acquired so far, and outsiders think that we went into this from day one to be acquired. The foundation for successful events like this is to go into any venture with the goal of building a great company, and then from there, good things will happen. To me, the journey meant everything, and the relationships built with clients and team members will always be the thing I will treasure the most. When I announced to the team that we were being acquired, I told them that it was one my proudest and saddest days. I really loved the journey we were on together, and these past 15 years was both challenging and rewarding in so many ways. I want to thank the entire RightAnswers team for making this adventure so very special. I do wish everyone involved the best, and look forward to seeing the great rewards the team and the clients get from this in the months and years to come.