Tech company SurveyMonkey has made some decent startup acquisitions over the years including WuFoo and Precision Polling, but with so many startups being developed there are three elements CEO Dave Goldberg says they need to have before his company will even consider buying them.
Before joining the SurveyMonkey team in 2009, Goldberg was entrepreneur-in-residence at Benchmark Capital where he sized up investment opportunities. He’s also developed and sold his own startup, and was an executive at Yahoo for a few years.
The three things he looks at when deciding on buying a startup are:
1. A big market opportunity
From his experience investors are looking for startups that are “trying to solve a big problem in a big market”.
2. The right product
The startup needs to have product/market fit because “sometimes you can identify a great market but you don’t actually have the right solution for that problem,” Goldberg said.
3. A great team
Having a strong team is one of the most important elements, Goldberg said.
“I tend to be biased towards if you have a great team and a really great market opportunity, even if the product isn’t quite there, the great team will figure it out,” he said.
“It’s much harder if you don’t have the great team but you have the great product to start out with.
“It’s harder to pivot as things change.”
When it comes to SurveyMonkey, Goldberg said so far the company’s completed acquisitions have “gone very well for us so it’s something that we continue to do”.
“We’re always looking,” he said. “We look at acquiring great teams.”
“We look at products that we think are great products that solve one of the use cases that our customers are already doing but perhaps we’re not doing that greater job at it because it’s not exactly what our core focus is,” he said.
“We want to solve our customers’ problems.”
A broad answer considering SurveyMonkey wants to make the collection and analysis of all different types of data easier.
“There’s a lot of things that fit in there,” he said, adding it is more about “picking and choosing and deciding what’s really important for us to go after”.
This includes deciding whether to build the product in-house, buy a company out or partner with them.
“We’ll continue too look at things as they come along, I can’t talk about anything specific that we might be doing at the moment but we look at a lot of things.”
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