On Tuesday, Dropbox quietly acquired Zulip, a young, stealthy workplace chat startup based in Cambridge. But according to Zulip investor and Blade CEO and Co-founder Paul English, the real advantage of the acquisition was in bringing top human capital in-house.
“My guess is that it was an acqui-hire,” English, who invested around $50,000 in the startup, told BostInno in a phone conversation.
English first met the Zulip’s founding foursome – Jeff Arnold, Waseem Daher, Jessica McKellar, and Tim Abbott – when they were working on a separate startup called KSplice, a software extension that eliminates the need to reboot Linux for security updates. The company competed in MIT’s $100K Entrepreneurship Competition in 2009, at which English was a judge.
Though he thought Ksplice’s product was interesting, the real draw to the company was the team, explained English:
I was totally blown away by them as individuals. I thought these four co-founders were incredibly articulate and sharp … they were really listening to the judges and responding clearly. They were very, very bright, an
d stood out stronger than the other teams. The way they interacted with each other, there was a kind of mojo there.
KSplice walked away with the grand prize of the competition that year. English and the team stayed in touch as an advisor and angel investor. Ksplice was then acquired by Oracle in June 2011.
After supporting the giant software company for a few years post-deal, Arnold, Daher, McKellar and Abbott reunited on a new project, Zulip. When the team came to English once more, this time, with the idea for a group messaging platform, the heralded Boston entrepreneur invested again.
“I wasn't blown away by the product itself. I just really invested in the team,” admitted English. “I thought it was a very crowded space.”
What differentiates Zulip from all the noise is that it offers “streams” for subject-focused chatting. In addition to more basic chat options, the startup allows users to do discuss on topical streams with targeted subjects and threaded replies and subsections. Zulip’s features also include drag-and-drop file uploads, image pasting, group private messages, missed message emails, audible notifications and emojis, reports TechCrunch.
In terms of the Californian cloud storage company’s acquisition of Zulip, the investor noted “ I think Dropbox needed to add collaboration into their products for enterprises,” adding that one of Zulip’s founder may have also had connections with Dropbox CEO Drew Houston.
“The thing that makes big companies so successful is that it develops this self-replicating DNA, but it becomes too comfortable in its approach,” shared English. Making acquisitions brings in fresh talent and innovative, new ways to think about markets and opportunities.
“It’s disappointing for me to see a Boston company acquired by someone on the West Coast,” said English.
While at KAYAK in 2006, English explained that the company was in talks with a big travel tech competitor called SideStep. “We had talked about them acquiring us, but we were growing faster,” shared the entrepreneur. In 2007, Kayak made the acquisition of the Santa Clara, California-based firm. “I think I titled the press release, ‘East Acquires West,’” said English, laughing.
Dropbox’s acquisition of Zulip is said and done. But the next step, according to English is figuring out how to hold on to top talent. One of the ways English plans to contribute to this cause is his latest venture Blade, a highly selective B2C startup incubator based in Fort Point.
Posited English in closing:
Boston has really good talent and the schools here are great. The thing have to ask ourselves is how do we keep this young talent in Boston.
Image via TechCrunch
