Yes, I sold MindVision & eSellerate to Digital River

Yes, it’s true that I said I’d never sell to DR. In fact, I was quite adamant when I said that. What has changed since I said that are many things. What has not changed is my loyalty to my employees or the customers of esellerate. I have always tried to provide the best environment I could for my employees- a place where they could feel at home, where they could make a different, where they had a vested interest in the success of the team, where they could make good money, and finally, a place where they could grow. It’s this last item that is important to talk about. We made a decision some time ago to focus on improving ourselves, our services, and our value to our customers. There has not been the need to hire more people, and so there hasn’t been much of a chance for employees to “move up” in the company. Many of the employees are happy with the jobs they have, but some want bigger challenges. This is not something I have been able to provide in a way which can satisfy the “hunger” of these employees. I’ve been very fortunate that these employees have chosen to stay at esellerate, even though they want more. I believe it’s a testament to the strength of the culture and the team. Another item is, of course, money. I believe everyone at esellerate is paid fairly, but I want to provide more for the employees. I want to provide long term financial security. I looked at the next several years of esellerate’s financial picture and determined that it would be better financially for the employees if we could sell the company to the right company for the right price. This is what got me started on looking for a partner. Sure, I could have just put more cash into the company and paid the employees big bonuses, but that would have ended up meaning the company was operating at a loss. Who wants to look at the bottom line and see a loss? It’s de-motivating for the employees. Another concern I had was that we were not able to keep up with DR in providing value to our customers. I believe that we provided better customer service, but what seems to be more important is money. DR has a huge affiliate network and huge marketing channels. Every year they convinced more and more publishers to sign up with them in order to be in their affiliate network. We worked hard to build our own network, opting for quality over quantity, but I don’t believe we were able to keep up and offer our customers more value for affiliate sales channels. This was also an important factor in my decision to look for a buyer- I wanted someone who would be able to bring more marketing channels to out publishers so we could offer more financial value to them.

I think it’s been about nine months since I hired a M&A (mergers & acquisitions) firm to start looking for buyers. At that time, DR wasn’t even a consideration. I won’t disclose who we were talking to, but there were several interested parties. Our M&A firm felt we should take a look at DR to see what kind of offer they could make. I don’t think it’s a secret that we’ve talked to the DR folks many times in the past- people have seen me talking to Joel Ronning and Alex Dansberger many times at conferences. They talked about parameters of a deal that ended up not being interesting to me, so we never did anything with them. This time, however, they took the time to figure out what esellerate offers to its customers and to its employees, and they put together an offer that was very interesting and took into consideration all the things that we feel are important. I could have probably gotten a little more money with someone else, but I felt DR was the best overall choice. They have a huge affiliate network that our customers can use. We have lost customers to DR because those customers felt DR’s marketing options were worth putting up with the other things the customer didn’t like about them. Now our customers can have the best of both worlds- they can stay with us AND have access to DR’s marketing options. It’s a win-win for our customers. For the employees, I believe it’s better in almost all respects. Now that we don’t have to spend so much energy competing with DR, we can spend that energy on improving the esellerate offering and leveraging DR’s strengths. Employees will have more options in jobs- some have expressed interest in working for DR in other countries. That is something I have never been able to offer. Sure, there is some additional uncertainty for the employees because of all the things happening at the moment, but things will calm down and everyone will start to relax again and they can stay focused on their work. I’m not going to disclose details of what the employees got out of the deal, but I believe they all received far more than they thought they would receive. I absolutely, positively believe that the employees are the reason I was able to negotiate a deal to sell the company. They are the ones who have worked very hard to build the value of the company. It is only fair that they share in the financial rewards of selling the company. I believe that virtually all of them will stay at DR and work just as hard as they have been. Esellerate is still a team. It’s still a small group of people who believe they can make a difference. What’s new is that they have many more tools available with which to make that difference. In today’s world, nothing is guaranteed. The terms of this deal are no exception. I do believe that DR has an incentive to keep the company in Nebraska and to keep the employees around. They bought the company because we have been successful. They are smart enough to understand not to mess too much with things. I will be involved in various ways, but I’m not sure of the details. My life has changed dramatically since I stepped down from esellerate. I’m now married and have two kids and I’m quite involved with local charities, so I do not have the same amount of time or energy to dedicate to work as I used to have. I am excited about the possibilities for esellerate and I’m excited about what I can offer to DR, so I hope that things work out in way where I can be of value to them and keep a balanced life with my family. I also know how hard it is for someone like me, who is used to being able to do whatever he wants, to fit into a company of over 1000 people. Being an employee is not right for me. But that doesn’t mean I can’t contribute my skills to DR in other ways.

As you can probably tell, I’m not as outspoken as I used to be. There is a simple reason for this. When I owned esellerate, I could say whatever I wanted because the consequences fell on my shoulders. In selling my company to DR, I have to be respectful of them and the fact that they are a publicly-traded company. I need to keep certain things confidential, and therefore I can’t tell you all the details of the deal and what will transpire in the near future. But I do believe that this deal will result in better value for esellerate’s customers and a better life for esellerate’s employees (I will very much miss calling them “my” employees). I know I’ve probably lost quite a bit of credibility with everyone since I broke my promise of never selling esellerate to DR, but I believe in my heart that this is a better long term future for the customers and the employees. All I can ask is for everyone to decide if they agree and to stick with esellerate if they do. In closing, I want to publicly thank everyone at esellerate for all their hard work, dedication, trust, and loyalty. They will always be my family.