Ben Jacobs, co-founder and former CEO of Whistle, now Head of Ventures at Mars Petcare, has been on both sides of the M&A negotiation table. Here he shares the story behind Whistle, his pet activity company (acquired by Mars Petcare), along with his best advice for both potential buyers and potential acquisition targets.

Ben founded Whistle in 2012 out of his love for pets. He and his two co-founders grew up in households where pets where a natural part of the family. Having experienced the sudden loss of Bear, his dearly-beloved German Shepherd, Ben along with co-founders Steven and Kevin decided to give a voice to pets by providing preventative healthcare to the underserved pet market.

Finding product-market fit

Like so many other startups, Whistle was a journey of finding the right product-market fit. Originally launched as an activity tracker that measured the general health of pets, primarily dogs, the device initially gained limited traction. But as they received requests for GPS tracking and location capabilities from worried pet owners who wanted to make sure their animals would not get lost, they broadened their service and offered a subscription-based combination of hardware and software. After several iterations and an eventually successful strategy pivot, the business started to really get traction.

BJ: “There are so many funny stories from when we launched the GPS location capability and could follow the pet’s adventures of the day, making sure they returned home safely. I remember one cat that went on quite a misadventure. The owner got an alert from Whistle saying the cat was moving at tens of miles an hour, so she called our support team asking if this could possibly be right. When we checked, we could confirm that the device was indeed working properly. It turned out that the cat had climbed into a FedEx truck and was being taken down the highway!

“The clear majority of Whistle users are dogs, with a significant minority of cats using Whistle as well. But we have seen the product used on a wide variety of animals around the world, both wild and domesticated. We’ve had everything from cheetahs in a wildlife preserve to tortoises, parrots, and one of my favorites, the Philadelphia Eagles mascot eagle, so that it can return home safely after flying around the stadium during the Superbowl and other events.”

Staying focused

As Ben was running the company, he focused primarily on three things that he saw as critical to making Whistle a success – Team, Pace and Passion. He wanted to build a team around him that had the skillset and attitude required for enabling the company to move fast. He saw passion as critical because that would keep the team driving forward despite hard times, always believing in the service they were doing for pets.

BJ: “You need a team that is wanting and willing to move fast, because most of the time, you won’t get it right the first time…and you probably won’t get it right the second time either. So, it’s about how quickly you can move from the first iteration to the second and third iterations when solving a customer pain point. And that comes down to how committed people on the team are. Startups, by definition, can never have the resources of a big company, but agility is a great asset to have. I feel very fortunate to be able to work on something I am truly passionate about, and to have found a team that shares that passion with me.”

Having the right team at Whistle became especially important when the company acquired TAGG, a complementary pet activity tracker spun out from Qualcomm. Integrating the teams, products and brands required much commitment from both Whistle and TAGG employees. They went through several hardware and software iterations to bring both the apps and the user bases together. The key was reinforcing a shared vision of improving the lives of pets. There were many bumps and much uncertainty along the way, so a strong vision became critical to staying on course. It also became important to let the users know that Whistle was there for them and their pets, working on improving the product to meet their needs.

Lessons from juggling multiple M&A; proposals

After successfully integrating TAGG, Whistle was approached by several strategic companies seeking innovation in pet care. Ben started juggling multiple partnership proposals with varied and sometimes conflicting implications for the company while running a fledgling but rapidly growing business.

BJ: “It’s difficult to say no when there is a concrete offer on the table, but your role as a founder is to spend time assessing these deals and the potential in them. It’s about building trusted relationships, and it’s never just one conversation. For us, with Mars, the vision was clearly aligned across the board from the very start. That built trust. One of the first visits Mars made to Whistle’s office in San Francisco was by several Mars executives who are still engaged with and supportive of Whistle, so it’s clear that the continuity of vision and people matched well. I learned a lot from going through the acquisition of TAGG and sale of Whistle. Today, at Mars, I head new venture activity as well as working on their broader “build, buy, partner, invest” strategy. I have continuous conversations about acquisitions and potential acquisition targets. Over the years, I have learned three main things about M&A; discussions, all of which are good for any founder to keep in mind:

“First, shared purpose matters on both sides of the table – Sometimes people focus too much on near-term product, or specific elements of the P&L; or the transaction, when an M&A; deal is really more of a long-term marriage. Focusing on the long-term vision of where the industry is heading is so much more important than the deal dynamics on the table.

“Second, it is important to understand the role of your product and business in relation to the acquirer’s products or services – It does not have to be perfect, but there needs to be alignment on the acquisition logic. You can always do a commercial deal around joint development rather than merging, so you need to be clear on the unique benefit from being one company instead of two. It’s often worth going that route if it’s about deep integration in the product or service. A successful acquisition is often about leveraging the acquired product or service to fulfill a larger strategy. You can maintain a degree of business and cultural autonomy, but there must be a shared goal to bring products to life that are more impactful for customers.

“Third, the map of power needs to be understood on both sides – Aligning people, understanding how decisions are made, and clarifying who your sponsors are – all are essential for a successful merger. Without team alignment, continuity and knowing the how decisions are made, there will be misunderstandings that may lead to the departure of key people and put the merger at risk.”

Founding and building Whistle has been one of the best experiences in Ben’s life.

BJ: “There was a series of special moments around the hard work I did with the founding team and the larger team across Whistle over the years. So many different milestones…from launching our first website to shipping our first product, being part of every step at every level. I remember boxing up our first devices to ship in time for the first holiday season so that people could get their gifts in time for the holidays. People love to give gifts to their pets or pet-owning friends and family. Whistle certainly has been the best working experience of my life.

“It’s exciting and surprising to discover the depth of this industry, as we were being brought into the home of pet owners globally…we thought we were passionate about pets, but that just scratched the surface. Now that we have visibility into how passionate people really are about their pets worldwide, it has been a hugely positive surprise to see that depth.”

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