Jun 22, 2015 ยท 8 minutes

Last week, Fortune broke the news that Boston-area cybersecurity company Bit9 had acqui-hired restaurant service software company Objective Logistics. The company, founded and run by Phil Beauregard and Matthew Grace since 2009, used a software platform it called MUSE to motivate and measure waitstaff by gamifying their daily work.


What's interesting about the acquisition, which didn't include CEO Beauregard or the MUSE platform, was that Objective Logistics was the second company sold by Beauregard and Grace this year. In late March, the pair sold their mobile app Rekindle, which was a twist on Tinder that allowed people to reconnect with out-of-touch friends or long-lost love interests.

Rekindle was founded only last year and received $500,000 from an impressive list of individual investors such as Google Ventures' Rich Miner, FKA partner Jeff Fagnan, Dyn founder Jeremy Hitchcock, and Adelphic Mobile co-founder Jennifer Lum, among a large number of others. Although the details weren't revealed, the acquisition probably made a little bit of money for everyone involved. However, the Bit9 aqui-hire, the terms of which were also not revealed, only likely returned the $9 million in funding that had been put into Objective Logistics by its investors — including FKA, Google Ventures, and NextView Ventures.


On Sunday, I caught up with Beauregard, who has been spending his "retirement" close to the ocean at his family home in Westport, Mass., to talk about the acquisitions, the challenge of juggling multiple companies, and what he learned by working with small businesses at Objective Logistics.

So, tell me about first selling Rekindle.

What we found with Rekindle is that we had built his amazing asset that could discern information on connections, we were able to build, for lack of a better term, a contact graph. And a lot of that is thanks to Matt.

I think the reality came down to the fact that we weren't going to raise a Series A. If we did, that was going to take a trip out west, so to speak, because consumer is more...um, vibrant, from a raise perspective out there. And that raised the prospect that Matt might have to move out there.

We started to form a thesis to how we could use the technology for businesses better and create an introduction application off of the graph, and we were building some cool shit. And at that point we had a bunch of large companies in Boston who started reaching out to us about acquiring the tech and the team.

And before we knew it, we really had a bake-off going with four companies.

We really found a really good connection and home at HubSpot. It just seemed like a perfect match because they could utilize this underlying technology and apply it to Sidekick and some of their other CRM products.

How was selling Rekindle for you individually?

I think what people fail to realize is that selling a company is extremely hard. Beyond the amount of time that it takes, there are a lot of different dynamics with any deal that can kill it at any time and create a charged environment around that.

Rekindle was relatively smooth. And I think that people underestimate how long, how much energy, and how much emotion it takes to get that over the goal line.

How did the Objective Logistics deal go down?

With Objective, it just so happened that in November, at the board level, we were having these high level discussions and trying to figure out if this business model will 'hunt.' And what way was the market going and how was it shaping up.

Basically, I wondered whether we could put together the resources we needed in a way that would essentially treat everybody properly, as far as the cap table goes, and build a really large company.

I felt like the restaurant industry just wasn't there yet from an operations management software aspect.

Once you decided to sell, what happened between November and last week?

We decided to have some conversations with some strategic partners who had been interested in the tech and the team over the years. And we had a large strategic buyer who would have used the technology within their software suite. It was a perfect fit on paper. We actually had that deal going on until about March.

And when we had about three weeks left of money left in the bank, the strategic buyer came back to us after doing due diligence and said they wanted to cut the deal price by two-thirds. And that was just dead on arrival.

It got pretty harrowing and the times got pretty intense because our prospective buyer essentially cut our legs out from under us with only three weeks of cash left.

And so we had to ask ourselves, how do we salvage this opportunity, and how do we return as much to the shareholders and the investors as is possible under these conditions. And then we got pretty lucky again, in that we had a number of companies that were interested in Objective Logistics from a team perspective. We had this proficient team who could push products out the door.

We ended up talking to Bit9, and we really liked them. It just turned out to be a good result and a good outcome given the circumstances.

So that's two companies sold in 2015, how does that feel?

It's pretty tiring selling two companies in one year. It's pretty tiring building two companies. It was a Herculean effort by everybody.

What was it like building two companies at the same time?

Lessons learned, it is really interesting seeing the difference between consumer and enterprise.

Also, it was a really interesting time to build a consumer startup in Boston. It is a little bit different. You have companies like DraftKings and PillPack, which are going to be giants, but the ecosystem wasn't as robust, from a help perspective. We did find ourselves on the phone with more people on the West Coast who were more in the consumer business.

But with Objective Logistics, we were deep enterprise, and there are just so many people in Boston who have been there and done that you can lean on.

For you personally, how has the past year been?

These are emotional journeys when it comes down to it. If you are a first time entrepreneur, you aren't necessarily equipped for the highs and lows of feeling the true weight of the world on your shoulders. It's not anyone else puts on you, but it's something you feel when you take other people's money. There are certain times where you do feel like you can't win, where you fell like its end of days, it's like "Winter is Coming."

I'll have to say, between both companies, I felt a pretty heavy weight to carry.

I felt myself more capable of carrying that emotional load, but the best you thing you can do is build a support system, of other CEOs, that you can lean on, so you don't feel alone.

What did you learn about business while interacting with SMBs at Objective Logistics over the past few years?

They all want to innovate and they all want to do things differently than anyone. But at the resource level, most of them can't. If you bring a new technology into a small business, it needs to have instantaneous ROI. And an ROI that the business owner will feel immediately.

I think small businesses are extremely intelligent, but they just aren't that sophisticated when it comes to technology right now. If you are an entrepreneur building for a small business or an enterprise, what you need to realize is that you need to build something that is consumerized, something people are used to using, like a mobile interface. That's not to say that you can't be unique.

Secondly, it has to be as turnkey as humanly possible. You can't build a product that you have to use half of your team to educate the customers on how to use the technology. And small business owners have a million other things to do, so that don't have time for that.

You've built and sold two companies, any advice for other CEOs?

As long as you comport yourself with honesty, integrity, and honor, and you are very transparent with the board and employees, and you can look in the mirror everyday and can say that you are doing this the best you possibly can, that is what will help you sleep at night.

Would you ever do this again, building two companies at the same time?

Never say never. I certainly think that I need to take some time over the next few weeks to debrief. I would definitely be wary of building tow companies at the same time. But I mean Dorsey and Elon Musk seem to be able to do it.

It's in my blood though. I wake up once a week with an idea that I think can be a world beater.

What's next?

I'm going to try to sleep and exercise a bit more. But you haven't heard the last of me, Dennis. I want to build a unicorn.

You mentioned that as a CEO it feels like "Winter is Coming," in the Game of Thrones sense. In that scenario, are you Jon Snow?

I'll be Jon Snow, because I try to comport myself with honor and dignity and all that. But I have no plans of being stabbed by my co-workers.

There's a very distinct possibility of that happening, I just don't think it will be the people that I'm working with.