Adku, a recommendation engine startup, was in stealth for a long time. But It still caught Groupon’s eye.Now Adku, backed by startup incubator AngelPad, has been acquired by Groupon and is joining the company’s entrepreneur-stacked Palo Alto office.
That’s quite a change.
We got in touch with Carlos Whitt, a co-founder of Adku, to find out what it was like to be acquired by Groupon and what the company is doing. Here’s what we learned.
- The Groupon office in Palo Alto is mostly staffed by its acquisitions. Just about every other employee there is an ex-entrepreneur, he said.
- Adku was a big-data company that powered a recommendation engine. That should give some kind of idea of what Groupon is working on next.
- Groupon was going to be a client, then they just decided to join forces. Whitt said the whole thing just seemed to make sense, and Andrew Mason agreed.
- The inaugural class of AngelPad is on a hot streak. Adku join MoPub and several other companies that have gotten high-profile exits or are already raising bigger rounds of funding.
BUSINESS INSIDER: Can you tell me a little bit about Adku and how you guys got started?
CARLOS WHITT: We met while working at Google and we had a big fondness for big data. We’ve been in stealth for so long, but the quick summary is we like big data and wanted to see what we could do with external data signals and e-commerce. We wanted to leverage big data for e-commerce, we spent all of last year building a recommendation system and integrated it with numerous clients. They were happy and loved us and around that time we started talking to Groupon.
BI: You guys were a part of AngelPad, right? How did that affect your startup?
CW: Once some people heard I was starting a company with other Googlers, somehow in the small valley, they said we should talk to Thomas (Korte, founder of AngelPad). I met with him and had a good vibe and we joined AngelPad, and that was great. Any place you get that kind of structure on a weekly or almost daily basis is really good for startups. You focus exactly on what you need to be thinking about. As you discuss your idea and discuss it and discuss it, it’s really helpful.
I think that was awesome for us and that accelerated our timeline by 6 or 8 months or possibly more. We were part of the inaugural class, I don’t think the couple VCs that set up the new program until the second or third class. MoPub was in our class, AllTrail was in our class, a few others were in our class too.
BI: What’s next for you guys?
CW: One thing we’re not allowed to talk about is what we’re gonna be working on. But think in terms of what things we were doing — leveraging big data to optimise e-commerce. We were talking to Groupon along those lines. They were not one of our clients before, but we were discussing having them become one of our clients and those discussions made us realise that maybe we should just join forces. We’re in San Francisco, and we’re gonna stay here. The entire team lives and works in San Francisco, but we’re gonna be joining the Palo Alto Groupon office.
BI: What was the negotiation process like? Was Mason a hard driver?CW: We were talking with them about being a client. We did spend a little time with Andrew, but it wasn’t like he was calling us on the phone out of the blue and saying “hey, let’s do something.” He was brought in toward the middle of the process, and we just wanted to bounce some ideas off him and confirm what we thought about Groupon was in line with his vision. We had a great chat with Andrew, he seemed very energetic and very articulate and basically his way of describing going after the local problem was very much in line with what I had envisioned and what I’m really excited about doing.
We met soon after he did his interview for 60 minutes, and I guess in the interview they referenced him doing yoga in his underwear. We talked about that a little bit, he’s just like, eh, it’s up there so we decided to leave it up there. Once something’s online it’s impossible to get rid of.
BI: What was so appealing about Groupon that made you accept the offer?
CW: I get the sense that the company has a very fun culture about it. One of the things that was really appealing to me and my co-founders was the fact that it’s only three years old, the company is basically just a startup with a huge opportunity. There are plenty of startups that are older than three years. It’s now a fairly large company with a successful market, so it has the fun quirkiness.
The Palo Alto office in particular is comprised of a lot of acquisitions, and that is really appealing. It means we’re basically one of every two people is an ex-entrepreneur. And they’re some of the most exciting people I can interact with. The idea that I can join a company like Groupon and have that scale of impact and work alongside those entrepreneurs is really exciting. Any time you get to work alongside some entrepreneurs, I consider myself really, really lucky.
BI: How are you feeling about the acquisition?
CW: I’m ridiculously excited, one of the things it’s saying to me, we basically get to run experiments and run different algorithms. With the amount of data Groupon has, we get to run our experiments a lot quicker and iterate even faster than we have been in the past year and a half. The sheer quantity of data allows us to move even faster. It’s not really resources — for us it’s almost entirely the quantity of the data. The more data, the faster we can achieve statistical significance and the faster we can move.