Ep 38: How to Exit Your Company - LIVE at Amazon Accelerate 2023

[00:00:00] Jewel: It's so important to, when you're in rooms like this, to network with each other. Building those really tight connections, particularly with people who have skills that you don't have and you all can be on the journey together. That's so critical. So if you don't have people who you trust, who you can build with, that's what these rooms are for. So make sure you build those connections.

[00:00:25] Host: Hi, This is Small Business, a podcast brought to you by Amazon. I’m your host, Andrea Marquez. On This is Small Business we cover all things small business that will help you start, build, and scale your business. We will hear from guests with diverse backgrounds, point of views, and stories, with the hope of hearing from many types of small business entrepreneurs. And by the end of each episode, I'll point out key takeaways that you can use on your business journey.

I recently got to go to the Amazon Accelerate conference -- which is the premier annual seller conference hosted by Amazon where current Amazon selling partners or aspiring selling partners [00:01:00] get to connect and hear from experts, and other sellers. And while I was there, I recorded a live episode of This is Small Business with Jewel Burks Solomon, a tech entrepreneur, venture capitalist, and managing partner at Collab Capital. Before that, Jewel was the head of Google for Startups in the U. S. and the founder of PartPic a startup that was acquired by Amazon in 2016. She was also a product leader at Amazon's visual search and AR team. Jewel has an impressive list of accomplishments, and I was curious to know why she chose the entrepreneurial life and how the acquisition process went -- especially since it happened when the company was only a few years old.

I also got to speak with a familiar voice that you will probably recognize: Danyel Surrency Jones. We've had her two times on This is Small Business, but Danyel has such a wealth of information that we needed to bring her back. Danyel is a fellow Amazonian -- she's the head of Amazon's Black Business Accelerator program, [00:02:00] which aims to empower and offer support to Black entrepreneurs. And she’s also the co-founder and former CEO of POWERHANDZ. If you want to know more about her journey, you might want to listen to episode 12 of season one or episode 15 of season 2.

Also, don't forget that if you want to hear your story on This is Small Business, we have a voicemail line where you can ask questions or share your entrepreneurial story. We want to hear from you! Find the link to the voicemail line in the episode description.

[00:02:30] Danyel: So we started PowerHandz in 2013 because we knew that our patented innovation could improve human performance across the life cycle of athletes. The proven science, not only gave birth to a global athletic training and fitness product tech company, but it also fueled our impact through our Power to Give Foundation. I will never forget, Andrea, when I had to tell our investors that a percentage of sales were going to be donated [00:03:00] to the Power to Give Foundation on day one.

There was absolute silence in the room. Then one of our investors said, how are we going to give money away when we aren't profitable yet? Well, I responded. Serving the mission with a deeper meaning of purpose always drive profitability. So four patents later, one acquisition and selling in over 87 countries. Nine years later, we closed a tender offer, a strategic merger that provided a positive above market return on our investors investment while impacting global communities through the Power to Give Foundation.

[00:03:48] Andrea (live): That's awesome. So, so cool. And so after that, you then started selling in the Amazon store.

[00:03:55] Danyel: I did. And I am so grateful... Part of the success that I attribute [00:04:00] to Powerhandz is selling in the Amazon store. When we were building our distribution channels, we immediately understood that Amazon could drive awareness to a wider audience. And bring credibility to our brand through positive reviews and a supply chain model that would drive down our cost to serve. Then through our minority and women owned certifications, we participated in the pilot as well as the launch of the Black Business Accelerator in 2021, which then unlocked more education, account management, and other resources that assisted us with our journey. What I think we developed, I know we developed, was a mission that worked backwards from customer obsession.

[00:04:48] Andrea (live): That's really exciting. So you leveraged the tools that Amazon had to then understand who your audience is, how they're responding to the product. It was like a cycle. So you sell, receive information, make the product better.

And then it happens again. [00:05:00] Danyel, you've had such a great journey as an entrepreneur. Why did you decide to join Amazon?

[00:05:06] Danyel: After the Tinder offer and merger, I knew it was time for my purpose to connect to my next journey. And my values have always been grounded in being a cheerleader for the underserved, for small businesses that don't come from privilege or pedigree as well as for women, because we play such a vital role in this community. So the number one reason why I said yes to becoming an Amazonian is because I feel a deep responsibility to lift, push, and pull others by sharing my bumps and bruises, milestones, success stories, in order to make sure that others succeed through my journey as a black woman owned business. I have an opportunity to lead a team of brilliant minds who work so hard every single day for the success [00:06:00] of our selling partners who are entrepreneurs just like myself with dreams who simply want to make a difference in customers lives. And I cannot forget this. I also love our Think Big principle. I believe that we can give birth to new ideas that will stimulate economic growth.

[00:06:20] Host: We'll get to hear more tips and advice from Danyel throughout the episode. But now, I want us to five into Jewel’s story and get to know why Jewel decided to go down the entrepreneurial route.

[00:06:30] Jewel: I, I like to share with people that I got entrepreneurship honest. I grew up in a family of entrepreneurs. From the time that I could probably walk and talk, I was working in my parents’ businesses. My grandfather actually... started businesses in Mobile, Alabama, in the 50s and 60s. Everything from laundromats to a cab service, to convenience stores, which is what my dad inherited. And so, I really didn't have a choice because that's what I saw growing up, [00:07:00] and I was just intrigued by the fact that my parents were working really hard, but they were also able to show up for me in different ways. They had flexibility in their schedules, and so I always knew that I wanted to be an entrepreneur just based on watching them when I was growing up.

[00:07:15] Host: So a big motivator was growing up with what she knew. With something that was already familiar to her. Let’s fast forwarding a bit. Jewel founded Partpic, which was acquired by Amazon in 2016. And it technically wasn't her first business...

[00:07:30] Jewel: I was a painter in high school and so sold paintings, um, in Nashville where I grew up, but that, I didn't really have a LLC around that.

[00:07:40] Host: Jewel always knew that she wanted to be an entrepreneur. That’s what growing up in a family of small business owners does to you - yes I am speaking from experience. She just had to come up with an idea.

[00:07:50] Jewel: I was working at a company called McMaster Car, which was in the parts distribution space. And previously I'd been at Google, [00:08:00] so I knew that you could use technology to solve big problems. And I saw a huge problem, which was that customers were flipping through a catalog to find the parts that they wanted to purchase. And this was in 2012, so the fact that they were still using a catalog as their primary marketing tool to me was a little bit, um, outdated. And so I saw that there could be a better way. And I saw that technology could be used in that industry to help customers more easily locate their products. So that was kind of the thing that pushed me as far as having an idea that I wanted to pursue or seeing a problem that I really wanted to solve. And to take it a step further, I was managing the call center. So I was the person who got all the angry phone calls when people were sending the wrong products. And so literally every day I was hearing just very angry customers. And I felt like, okay, there has to be a better way. Um, and then on top of that, I got a phone call from my grandfather. [00:09:00] And he told me that he was looking for a part for his tractor. So we're, we're country. We got a farm in Alabama and my grandfather was in the middle of a harvest. His tractor broke down and he called me to help him find a part for it. I was working at a parts company, so should be able to search for this thing. Um, but I couldn't find it. And so that was the kind of real-life story that pushed me to go ahead and figure out a solution to this problem of part search. Um, and that was also the motivation that kept me going when things got difficult, when it wasn't as easy to build as I anticipated. Um, you know, when I wasn't able to raise money in the ways that I wanted to. The fact that I knew the customer that could benefit from what I was wanting to build, that was, you know, the engine that I needed to keep going.

[00:09:52] Host: Partpic was very personal for Jewel. And from what we've seen from other entrepreneurs on This is Small Business, passion and knowing your why [00:10:00] -- that's what keeps you going. Because -- as Danyel will let you know -- the entrepreneurial life isn't easy. Let’s briefly throw it back to Danyel…

[00:10:08] Danyel: It is hard. And that's what we don't want to talk about. It's not for the faint at heart. One of the common misconceptions is believing in the overnight entrepreneurial success. The reality is endurance fuels entrepreneurship. My journey is a perfect use case to show that success comes from strategic marathon planning, not impulsive sprints. As we navigate the winding road of challenges as well as sacrifices and trying to make the right decisions to prioritize things at the right time, I have always anchored on endurance. There are so many times, Andrea, when I wanted to just give up, especially when I looked at the balance sheet and it fell short of the projections. [00:11:00] But what I had to remember is this is a temporary roadblock, not an insurmountable barrier. Seriously, we must trust the process.

One of the tradeoffs of being an entrepreneur is the uncertainty and the financial risk that is associated with starting and scaling a business. Like many of you in this room, I had to invest my own 401k to start my business. I also paid employees on the days when I didn't pay myself. And I then had to decide about the right time, the right financial instruments, and the right people that I wanted to get involved in my company in order to move the mission forward. But we all know that greatness comes with sacrifice and tradeoffs.

[00:11:45] Host: And that's why, we'll say it again....

[00:11:48] Danyel: Make sure you understand your why and let that be the compass that absolutely guides you. I believe that if you can articulate your why [00:12:00] and let it drive your strategy and your execution, revenues will come.

[00:12:05] Host: Let's get back to Jewel. So, Jewel founded PartPic, and then earlier than she expected, her business was acquired by Amazon.

[00:12:12] Jewel: So, I was planning for my business to be acquired eventually, but I did not anticipate that it would happen in the time that it did. So, I will say, when I say I was planning for it, when I started PartPic, I knew based on the segment that we were targeting. And the fact that we're a pretty niche company that eventually it would probably find a home in a larger corporation. I didn't anticipate that we would grow the business to a point to go public IPO. I thought that we would sell to a larger company. And so I kind of always knew that part and I am big on write the vision, make it plain.

And so I wrote out: we will be acquired, and here are the top three companies that I would like to be acquired by. Amazon was at the top of the list because I knew from a technology perspective, and also with our focus on parts, [00:13:00] I knew Amazon sells parts, and they have a AR and visual search team, and so there's a perfect marriage there. So I always knew that, but I didn't know that it would come four years into building the business. And it wasn't my intention at that time to sell. What I was actually trying to do was to elevate our technology. Um, we had an incredible black woman, PhD, leading our tech team, Dr. Nashlie Sephus, who's actually still at Amazon to this day. And I wanted people to know her. I had been out front pitching, doing all these things, and what that caused was for people to think we were further along than we actually were. Um, and so I really wanted people to understand that we were a deep technology company and that we should be evaluated as a deep technology company.

And so in doing that, I was reaching out to different conferences. I was really persuading them to invite Nashlie to come and speak. [00:14:00] What I identified was that most of the deep technology conferences did not have any women as speakers, certainly didn't have any Black women, and so I was reaching out to them and just making them aware of that fact. And so one conference, they responded and said, you're totally right. Um, we'd love to have Nashlie come and speak. And so, she went and spoke at that conference. She was doing a riveting session on how we find threads per inch in a screw. You know, she did an amazing job with her presentation, and after she did her presentation, a few companies came up to her, and Amazon Corporate Development was one of those that came up to her, gave her a card and said, we really love what you're building, would love to learn more.

She comes back to the office on Monday morning, hands me a stack of cards, I'm flipping through, I see Amazon Corporate Development. And I'm like, oh, what, what did they say? And so that was really what started the ball [00:15:00] as far as us getting acquired. And as I mentioned, wasn't in the market for acquisition. I was fundraising at that time. So initially I thought the conversation would be about them, about Amazon investing in the business. But that is not what they wanted to do. They wanted to purchase it, and so things went very fast. And what does it mean to sell a business in a short amount of time? Um, but I will say the learnings and everything that I picked up over the course of really seven years between four years of building the business. Um, and then three years at Amazon afterwards, integrating the technology into the Amazon mobile shopping app and launching other visual search products. That is the foundation that I needed to be able to do the work that I do today of helping other businesses grow and scale and hopefully eventually exit as well.

[00:15:50] Host: I want to dig deeper into how that acquisition went down. First let's hear what were some of Jewel's non-negotiables in the deal.

[00:15:56] Jewel: Number one is that I wanted to ensure that my investors got a return. [00:16:00] That's really important. I feel like if you're taking capital from other people, they have expectations. And for me, I didn't want to do anything that would cause me to be on bad terms with money people. Um, so I wanted to make sure that they got their money back plus a return.

Number two, I really wanted to ensure that our technology could scale. So when I came up with the idea for PartPic. Remember, I had the persona of my grandfather in mind, and I wanted something that could be easy enough for him to use, and all the grandfathers out there in the world, like him, who were building something and needed to find a part, I wanted them to have access to this technology. And so, the ability to scale was something that, of course, Amazon has in spades.

And then, the third thing was, I really wanted to be able to take care of my team. The fact that I had five PhDs who trusted me, I was 23 years old when I started the business.

[00:16:57] Andrea (live): Oh, wow.

[00:16:58] Jewel: I still can't believe that these really brilliant [00:17:00] people believed me enough to, um, you know, let go of great opportunities that they had and joined me on the journey. And so it was really important to me that they were all taken care of. And I mean, they had cash and they had a stock and they had a job. Those were the criteria in order for me to say yes to the deal. So, I had a few others I didn't want to move. That was another thing. We were based in Atlanta. I wanted to stay in Atlanta. And I also wanted to be able to tell our story. And so it was really important to me that people understood. That the makeup of our team, what we look like in a very diverse team, by the way. Um, so all of those things were considerations as far as making the decision. If I could get all of those things met, then I would be in a good spot to sell.

[00:17:50] Host: If you want to exit your company in the future, it's important to know how a company approaches acquisition. So, let's hear Jewel’s thoughts on why Amazon chose to acquire Partpic.

[00:18:00] Jewel: For any company that's making a purchase decision, it comes down to should they build this or should they buy it? And in our case, we had novel technology and because we're so focused, I've mentioned Nashley did a presentation on Threads per inch and a screw. Most other companies were not thinking about that level of detail when it comes to computer vision. So the fact that we were so niche and focused on this very specific area was hard to replicate. The specificity of what we were building and the algorithms that we built was not easily replicated. And we had patents that we filed around these things.

[00:18:40] Host: Protecting your business is extremely important and you need to make sure that you have yourself covered as early as possible. Here's Danyel with a quick tip again:

[00:18:50] Danyel: Get the legal advice that you need right in the beginning as you're starting your mission and developing your exit strategy on day one. [00:19:00] Your IP and your business structure will absolutely support your long-term goals.

[00:19:05] Host: If you're worried about expenses when it comes to hiring a lawyer, there's so many universities that offer pro bono legal clinics to help entrepreneurs. And if you want to more about protecting your intellectual property, we've covered that in episode 3 of season 3. Okay, back to Jewel.

[00:19:20] Jewel: We went deep on the technology. That was what worked in our case. In some cases, you may not be building something from a technology perspective that is novel, but you may have a unique way to get to your market of customers, or you may have built a large community. You have to kind of figure out what is it that's going to make you stand out. So for us, it was technology. So that was a big thing. And then it was also the fact that we had, as I mentioned, a great team, five computer vision engineers working on one problem that was very attractive. So it wasn't just we're going to buy this technology and then do away with the team. [00:20:00] It was also how do we bring this team in to continue to work on this particular problem and look at these other problems that we're also facing. Um, so that for us, I think those were the key areas, the reasons why they decided to buy our company versus building it internally. Um, but for other companies, it may be, you know, looking at, do you again have access to a unique set of customers that they may not be able to access? Um, are you, as the founder, bringing something to the table? That they wouldn't be able to go out and hire. Um, and so those are all kinds of considerations that go from a company side when they're thinking about, should they go in and buy this business?

[00:20:40] Host: So the technology and the great team -- those were the reasons that Jewel believes why Amazon acquired Partpic. And Jewel previously mentioned that the process was emotionally taxing. And it makes sense, I mean her business -- at the time -- was her baby.

[00:20:54] Jewel: I have a real baby now. So I hesitate to call Partpic my baby, but at the time it was certainly my baby, [00:21:00] and it is very challenging to make a decision to let someone else have your baby, even if you're brought in to nurture it. It doesn't belong to you anymore. And so that was really hard for me from an emotional standpoint. Um, I share this, I, I definitely fell into a bit of a depression, um, after signing the deal to sell. And it's a weird thing when, you know, you get a large deposit in your bank account and you can't get out of bed at the same time. That is, that's strange. Um, but for me it was, I had a huge aspiration. I really wanted to have a billion-dollar exit, that was my goal. And we didn't quite get there, so I was sad about that. And then I also felt like, the reason that I had to sell at the time that I did was because I wasn't able to access the level of capital that I needed to really scale the business.

[00:22:00] And the other thing was identity. I was so accustomed to introducing myself. Hi, my name is Jewel and I'm CEO of PartPic. My identity was closely linked to my business. And so letting that go and even just figuring out how am I going to introduce myself to people, that was a big thing for me. So the learning in that is figure out who you are outside of your business. Because at some point, you're going to hopefully exit and you don't want to be where I was where I couldn't get out of bed because I was too, I just didn't even know who I was without the business. So yeah, all of that, that's a lot, but all of that goes in, that's the emotional part of when you're building something that you really care about and you make a decision to let it go. You have to be someone beyond that because Your business is not you. It's close. You're, you're putting yourself into it and people are attracted to it, [00:23:00] likely because they're attracted to you. But you are still somebody without the business. Your value, your worth, who you are still matters without the business. And it's important to keep that top of mind as you're building.

[00:23:12] Andrea (live) : Super important to keep an eye on because I think we live in a world where the first question you often ask is, what do you do?

[00:23:19] Jewel: Yep.

[00:23:20] Andrea (live): Your identity becomes so tied to that, that you almost forget that, Hey, I have hobbies and I'm also this type of person and really important message. So I want to switch gears a little bit. Thank you for sharing what you've shared so far. I'm wondering, thinking just a little bit back to the building phase of your business, if there were any tools or resources that you leverage to be able to build your business that you think the audience would benefit from hearing?

[00:23:50] Jewel: So, for anyone who's building something that does have technology at the core, I would say, as quickly as you can, if you're not already associated or close to a research institution [00:24:00] that may be in your city, definitely utilize the resources that they have.

So, the big win for me was that I came up with this idea that was highly technical, not being a technical founder myself. So what did I do? I recognized Georgia Tech was in my backyard and I could just go on campus. I was, like I mentioned, I was 23 at the time, so still looked pretty young. Could kind of, you know, maneuver with the students. But the biggest thing was getting access to the resources that were available on campus. From a talent perspective, I found all those incredible PhDs because I went Talk to professors and told them. This is what I'm building. Do you know anyone who has this skill set? And then one introduction leads to another leads to another. And I'm able to build this amazing team. Um, and so I think people don't utilize the university resources enough.

And then if you're not in a city where there is a great [00:25:00] institution like a Georgia Tech. There's this amazing thing called the internet where you can access resources from all over. I remember when I was first starting, I was trying to understand more about computer vision technology, machine learning. I'm, I'm early on the AI game. I was, you know, 10 years early. Uh, so I started to do, Stanford had some free kind of like 101 courses that you could log in and just get up to speed on what is this technology so that you could have good conversations, productive conversations with technical talent. So that I could have these conversations with technical talent that I was trying to bring on. So those are a few resources for me that were really helpful. Not having that engineering background, but just having the knowledge to understand, okay, I don't have it myself. I'm not going to become an engineer in, you know, 12 weeks. Although if you search hard enough on the internet, there is a video of me. [00:26:00] My, my plan was that I was going to go to a bootcamp. Become a software engineer and build this idea myself, and I quickly realized there is no way that I'm going to get up to speed in the ways that I need to. And so that's why building with people is so important and connecting with folks who have complementary skills can help you grow whatever it is that you're trying to build is really critical.

[00:26:28] Host: And there are accelerators like the BBA that could be super helpful for you. Danyel did mention that tapping into the tools Amazon offered helped her out a lot in her journey as well.

[00:26:38] Danyel: I employ you to leverage Amazon's tools and resources. This will allow you to dream beyond your boundaries. Because I believe, and I know, there is nothing that can stop you from building a global brand. Remember, this is a strategic marathon [00:27:00] that is anchored on endurance, not a sprint.

[00:27:05] Host: What a great way to end this episode. That was Danyel Surrency Jones, the head of Amazon's Black Business Accelerator program, and Jewel Burks Solomon, a tech entrepreneur, venture capitalist, and managing partner at Colab Capital. And as always, here are some of the key takeaways.

• We’ve said this many times before. But knowing your “why” is super important. Danyel says to let it be the compass that guides you in whatever you do. And endurance is what will keep you going because, we don’t need to tell you how hard this journey can be. Both Danyel and Jewel spoke about this, and most of the entrepreneurs on This is Small Business have as well.
• Network network network. Also can’t say this enough. Accelerate is a perfect example of a conference where people with similar interests and goals meets. Jewel also spoke about her experience doing this and a reason for why Amazon acquired her business. If this is a goal for your business, make sure to get out there because you never know who you might meet.
• [00:28:00] When it comes to being acquired, Jewel mentioned the following as super important considerations: one is getting investors a return on their investment, two is ensuring that the business would be able to scale, and three was ensuring that her team would be taken care of. In terms of her business being appealing to be acquired, Jewel mentioned what worked in her case, which was being super detailed and specific in what her technology was offering and knowing that it would be difficult to replicate. She was also protected and had filed patents around her technology. Side note to always get the legal protection you need early on. If your company isn’t as specific as Jewel’s, she also talked about considering if you are able to access a unique set of customers, or anything unique that you might bring to the table as a founder.
• Lastly, something to consider if you can, and if your business is product-based, is selling in the Amazon store. Danyel talked about her own experience and how it helped her reach a wider audience, leverage the supply chain model, [00:29:00] and evaluate needs based on customer reviews.

I'm curious – How has your entrepreneurial journey been like? Did you get acquired or are you planning on it? I'd love to hear about your journey! Reach out to us at thisissmallbusiness@amazon.com to tell us what you're up to. Or let me know what you think of the episode by leaving a review on Apple Podcasts – it’s easier if you do it through your phone. And if you liked what you heard -- I hope you'll share us with anyone else who needs to hear this!

That's it for today’s episode of This is Small Business, brought to you by Amazon. Until next week – This is Small Business, I'm your host Andrea Marquez -- Hasta luego -- and thanks for listening!

CREDITS: This is Small Business is brought to you by Amazon, with technical and story production by JAR Audio. [00:29:45]