Q&A: James Evans of Amplitude on acquisition trial by fire

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The M&A landscape is on the upswing. Large deals (worth $1 billion+) jumped 17% in 2024 — and while smaller deals aren’t exactly following suit, these headline-grabbing negotiations “set the tone for the whole market,” wrote Brian Levy, Global Deals Industries Leader of PwC.

James Evans, Head of AI at publicly traded product analytics platform Amplitude, has seen this firsthand. After Amplitude acquired user assistance software Command AI (fka CommandBar), which James co-founded and helmed as CEO, he got a lot of founders tapping him with questions on how it all goes down.

James: I don't know any tech founders who started their company and wanted to be acquired. No, you would think about ringing the bell and going public and building a massive company. This wasn't the outcome I dreamed of on day one and during [Y Combinator]. I am super psyched about the outcome coming out of it, and think it was totally the right decision for our company.

But this was all new to James, too. Still, he and his team of execs and investors sought to make the process as seamless and equitable as possible. 

James: We'd had some acquisition interest before Amplitude. Also, the initial conversation with Amplitude was at a price that didn't meet our threshold, so we turned that down. It wasn't like, slam the door, because obviously we negotiated, got to a place where we both were excited.

Sometimes, companies face acquisition out of necessity, but that wasn’t the case for James and his team.

James: Growth was great. It came down to, do we think we are better off? If we stay independent, we capture 100% of the upside. If we don't stay independent, we capture way less of the upside. You have to believe that trade is worth it, and the first threshold always comes down to price. Our investors were super helpful in figuring out what that threshold should be for us. Then you can ask the really important questions, like, is this a cultural fit? Am I excited about what we can build together? 

Command AI has two products. In the handful of months since the deal, the team worked tirelessly to get the first integrated product out into the wild.

James: I was hoping I'd be able to chill a little bit. We've been working really hard to get a product into the market. I’ll exhale then.

One of the biggest changes he noticed post-deal is that the broader team, while not as overwhelming as, say, a Google or Meta, is much larger than the compact startup environment he was used to. He wasn’t involved in hiring everyone he works with.

James: It's not my role, and it shouldn't be. That's been probably the biggest work-life change, because, especially for me and my co-founder, Vinay [Ayyala], that's something that we got really used to. On the flip side, I would say we're not used to having so much leverage. People often say startups are the highest leverage thing you can do as a builder. And in some ways that's true, but in some ways it's very untrue.

Where Command AI was once a team of 40, Amplitude’s sales org alone sits around 200 people. That’s a lot of influence.

James: I've never scaled a business to $200 million ARR [annual recurring revenue] like Spenser [Skates], Curtis [Liu] and Jeffrey [Wang] have. So have Francois [Ajenstat] and Thomas [Hansen]. There's a lot of help and support. The flip side of giving up total control is you get to plug into this machine that's a lot higher leverage.

While James wanted to retain the good stuff of being a founder (he didn’t want to “totally drink the Kool Aid 🧃 and be absorbed”), part of the deal was to make sure the Command AI folks didn’t feel like a separate team. 

James: You can't have a talk about acquisition without talking about cultural synergy. We were way smaller than Amplitude, so there are some domains in which we have nothing to offer scale-wise. But what we've tried to do is just be very transparent about almost treating part of our jobs as consultants. Honestly, a lot of our observations are around speed, and I think that's one of the things that you get by acquiring fast-moving startups. Part of the value is you get a team that moves quickly and can hopefully accelerate the company.

Now, the Command AI team gets to integrate another product with Amplitude, doing the whole go-to-market process again and becoming even more a part of the company’s larger ecosystem. James expects it will move faster this time around with some experience under their belt. 

Getting to this point, however, was nothing short of an experiment in leadership. 

James: One of the hardest things during the process was having to consider, evaluate, work through the deal without the benefit of having our whole team involved. We were quite a transparent company, but it would have been impossible to have this conversation as a whole team given how uncertain M&A deals are. I don't have any solution. People should know going into it that it's a really hard part of the process. The only advice I've got around it is, until the deal is signed, you just have to assume it's not happening. Otherwise, you're going to be super bummed and it's going to be really hard to go from there.

Thanks,

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