Sonar6, the Auckland-based provider of cloud-based talent management solutions serving small businesses globally was bought in March by US company, Cornerstone OnDemand,a cloud-based talent management solutions company.
All the Sonar6 staff remain in place. Sonar6 CEO and co-founder, Michael Carden will be Cornerstone's Vice President of Small Business Operations. Co-founder Mark Hellier will continue his role driving innovation as Head of Product, and Pete Weaver will remain as Head of Retention.
How did you and Cornerstone OnDemand first start the conversation?
We had met a few of the people from Cornerstone before, as our industry is fairly tight-knit. We had had a number of our other competitors approach us and begin conversations about acquisition, as there is considerable consolidation in the HR SaaS (Software as a service) space.
As these started to play out we realized that Cornerstone might be a good place for Sonar6 to land and so we approached them.
What did you know about Cornerstone OnDemand before they made their approach?
Although we both make HR SaaS product, we knew that they played mainly in the enterprise space (companies with 5000 plus employees), while we played in the SMB space, so we did not run across each other much. We also knew from following their share market updates that they had built a rocketship of growth.
What did you have in mind when you began the dialogue?
We first wanted to see if there was any real value for Cornerstone in acquiring Sonar6, that they couldn't build themselves. Otherwise there was no point in having the conversation. We quickly realized that our native SMB business was very different but also very complementary to their enterprise and mid-market business.
Were you clear about what you wanted?
We wanted to continue building a great business. In fact we wanted to land somewhere where we could accelerate that. Dramatically.
How similar were the cultures of the two companies?
Very similar. We've just been innovating in different spaces. And neither business has Silicon Valley roots, which makes us both an anomaly.
Did you have any advice from other entrepreneurs as to how to manage the negotiations?
Understand what your value is. And then make sure that the acquirer understands that value, and how they can extract that value. It is very easy to get sidetracked in a negotiation; and understanding what value you are selling makes it easy to get back on track.
Will the Sonar6 name disappear?
Possibly. Our brand has a lot more to it than just the Sonar6 name. We have some customers, and probably some staff, who have an emotional attachment, so we'll make that decision considerately. We have to balance it up with the pure search engine metrics of a bigger brand like Cornerstone OnDemand. Those things are more important than sentimentality in an internet business so we will see.
How has your staff received the news?
I think universally people are excited. It's really a great deal for staff. We get to keep our team intact here in New Zealand, AND, we get more resources so that we can grow quickly.
It's funny, some people are naturally nervous in a situation of change at a time like this, and worry about their job security but on the other side of the fence Cornerstone OnDemand have bought this business intact - they are nervous that people might leave. So I think we have been working hard to ensure that staff understand that our cool company culture remains and this just provides us all with more opportunity.
If a business is producing market shifting results like ours is, the acquirer wants to keep it intact.
How has the industry received the deal between Sonar6 and Cornerstone OnDemand?
Awesomely. Here's a link I quite like.
These things are like any other business deal. If dealing with the people feels right, then it's probably the right deal.