Ben and David return to make their first foray into enterprise software, covering Salesforce’s $2.5B acquisition of ExactTarget in 2013 with the help of special guest and ExactTarget cofounder & CEO, Scott Dorsey. Technical note: due to an issue we didn’t catch during recording, audio quality is significantly lower than usual for this episode (especially David’s voice). We apologize but hope you’ll give it a chance anyway— Scott offers great wisdom & insights, and the ExactTarget success story is a inspiring one underdog entrepreneurs, especially (but not limited to!) anyone located in the Midwest or elsewhere outside of traditional "Silicon Valley-style” tech hubs.

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Topics covered include: • The decision to start ExactTarget post-internet bubble and in Indianapolis, with zero software experience between Scott and cofounders Chris Baggott & Peter McCormick • Raising initial money from friends & family, followed by early investment and mentoring from Indianapolis venture pioneer Bob Compton • Building and scaling a great sales organization within a technology company • The importance of focusing early on a clearly defined target market (SMBs in the case of ExactTarget), and then “stair-stepping” up as the product and business scale grow over time • ExactTarget’s unsuccessful first IPO filing • during the financial crisis • Building a "capital-efficient” early stage company, and the value of raising growth capital at the right time to step on the accelerator • The value of “secondary” investments allowing founders, employees & early investors to “stay hungry” by achieving some liquidity along the way • When and how to expand internationally and the importance of strategic resellers • ExactTarget’s second successful IPO filing • and life as a public company with quarterly financial reporting to Wall Street • How the acquisition process played out with Salesforce and other bidders (including reference to ExactTarget’s incredible SEC filing • detailing the entire negotiation—scroll down to "Background and Reasons for the ExactTarget Board’s Recommendation”, starting at the bottom of page 13) • Approaching the difficult task of integrating a major acquisition involving thousands of people • The fun story of ExactTarget’s winning Microsoft as a large customer—including actual sledgehammers • Scott’s new Indianapolis-based venture studio, High Alpha • Plus as always the "hard hitting" analysis across acquisition category, what would have happened otherwise, tech themes—and final grading

The Carve Out

• Ben: The Talk Show live at WWDC 2016 • with Phil Schiller • & Craig Federighi • David: The Score Takes Care of Itself • by legendary 49ers coach Bill Walsh • , originally recommended by Jack Dorsey [no relation to Scott :) ] at YC Startup School '13 • Scott: 2016 Scipps National Spelling Bee • , including one of the finalists’ favorite words: indefatigable Followups:

• Instagram’s incredible user numbers announcement: 500M monthly active users / 300M daily active users