I would be curious to learn more about the rationale to sell the business as I understand the strategic value to Amplitude. Interestingly, these next-generation digital adoption platforms have generally been pretty challenged.
The number that was reported in term sheet / pro rata did not include any stock, which was a big part of this deal. The total consideration for CommandAI was north of $45M. We're working with them to issue a correction. Long story how the wrong number got reported- mostly too much telephone. It was also a good outcome for their investors in that they were able to return more than what was raised.
We at Amplitude approached the Command AI founders about joining Amplitude. They had a bunch of runway and good growth numbers. They were initially planning to raise another round of fundraising to continue to scale their business instead. It took some time on both sides to figure out what the win-win combination would look like.
We're honored that they decided to combine with Amplitude and are excited about what the combined products look like.
Having a little clarity on outcomes like this can help founders make better decisions, really appreciate it.
I've seen a startup that was bootstrapped 10 years ago but took on too much money and ended up getting acquired for "undisclosed sum" but at the same time everybody knew the investors were just recouping their money while founders got nothing (they had sold their equity for raising more money as their costs were way up but nobody was buying their product). Cue local news reporters don't know the nuances so they'll just announce "Startup X acquired by Y, wow!"
Founders place a lot of emphasis on getting "acquired" but there is roughly 95% chance of you selling at breakeven where the terms leave you with a year's worth of salary as a junior SWE
Get ready to see a lot more of these "acquired" news coming out in the near future. something around less than 1% chance of getting more money than you put in.
Startup has horrible odds especially if you are building a simple GPT wrappers
Nothing against the founder. It's just how the game is played. And there's little to gain from deviating from the norms.
Edit: It benefits not just the founder’s ego but also the future career prospects of the employees. Big difference in your engineers being able to say “I worked at X all the way until they got acquired!!” and “I worked at X but the product was so unsuccessful we had to have a fire sale.”
How long is indefinitely in this case?
We've been very deliberate about integrating AI functionality in a way that's additive: recommendations, proactive insights, and summarization are all areas that are a leap forward in the data space. What the CommandAI team has done is legit- it's their fastest growing functionality in terms of usage. We'll have more here soon.
Relevant TikTok: https://www.tiktok.com/t/ZTFHap9QW/
This was never going to work out because OpenAI is literally watching everybody and how they are using it including prompts. AI wrapper startups serve these functions:
- wrappers prop up NVIDIA which are owned by the people giving VCs the money to invest in wrappers who are long Nvidia too.
- wrappers give OpenAI RSU holders a fuzzy warm feeling and they are able to see what the market is doing with their product so they can pull "Amazon Basics"
- IRS, attorneys, accountants, politicians love them all because they all get to squeeze milk from the fume
Way more than just a tarpit.
Piggybacking on OpenAI or any GPT is not at all the same as SQL
The main problem with those companies is that none of them will have any moat and those businesses aren't defensible.