Why Platform Partners Make Perfect Acquisition Targets
Today’s small partner could be tomorrow’s game-changing acquisition.
Yesterday, HubSpot announced they’re acquiring OrgChartHub. Dan and Austin - the two co-founders and sole employees of OrgChartHub - are joining the HubSpot Sales Hub team. I couldn’t be happier for them. They’re super humble, super smart guys.
And I’m not at all surprised this has happened - it’s a mutually perfect fit.
OrgChartHub is the perfect example of what I like to call “Ecosystem Entrepreneurs” - specialist creators building products that might not exist if the platforms they built atop did not exist. Every “true” platform has lots of “Ecosystem Entrepreneurs.”
OrgChartHub is the latest example from a playbook I’ve watched unfold many, many times. Small, scrappy “Ecosystem Entrepreneurs” build a solid business inside a platform ecosystem... before being acquired by that very platform.
Acquisitions like this aren’t accidental. They’re incredibly strategic.
Uniquely additive
Just after I left Facebook in 2015, a partner I’d worked with, KitCRM, was acquired by Shopify. KitCRM was a Facebook Marketing API partner, but they were also generating serious traction in Shopify’s App Store.
Michael Perry, Kit’s founder, was the perfect Ecosystem Entrepreneur. Humble, nimble.
Kit was a virtual marketing assistant - a bot - that proactively helped small businesses with marketing and advertising. Users interacted with Kit mostly through SMS or Facebook Messenger - they didn’t need to learn a new interface to use it.
“The goal here is to create the ultimate employee that goes beyond marketing,” Michael told VentureBeat. In the context of today’s AI chatbots, it was way ahead of its time. Kit was uniquely additive to Shopify’s platform.
On Shopify’s quarterly conference call, four months after the acquisition was announced, investors learned that Kit had already doubled its install base.
Customers loved it more, and trusted it more, now it was part of the Shopify family.
Why Ecosystem Entrepreneurs win
The best ecosystem partners don’t just integrate one product or system with a platform - they ideate and create entirely new, unique products. They think and act like internal product and engineering teams. They deeply understand the challenges, needs, and wants of customers. They move fast, and innovate faster.
They’re all-in.
When I advocated for partners like OrgChartHub and Kit, it wasn’t solely for their benefit. Ecosystem Entrepreneurs often understand a platform’s customers better than internal teams do. Nurturing these partners was good for customers, and for us.
Brandon Greer’s LinkedIn post about the OrgChartHub acquisition captured this dynamic perfectly. Dan and Austin “took a big bet on our developer platform, our company’s growth, but most of all our customers.”
OrgChartHub had already proven product-market fit within the ecosystem. This de-risked the build vs buy decision. They were already - in many ways - part of the team.
Small partners create big value
If you’re an “Ecosystem Entrepreneur” building atop someone else’s platform, think bigger than just building. Act like you’re an extended part of their product and engineering team. Understand their strategy. Understand their customers obsessively.
And, if you’re part of a platform partnerships team, pay more attention to Ecosystem Entrepreneurs. Today’s small partner could be tomorrow’s game-changing acquisition.
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