Selling Twitch to Amazon...the real story | Storytime with Justin Kan

Key ideas

Kan retells Twitch's sale through failed Google and Yahoo deals and an Amazon price cut, arguing founders should detach from outcomes and not expect achievement to bring happiness.

From a machine transcript of the audio. Quotes link to the moment they are said.

1. 1

   Know who is in the room

   Kan says a sale has four main parties: founders and operators, the rest of the board (mostly investors), hired bankers and the acquirer's corporate development team. He says a board usually follows the founder and CEO it relies on to run the company. After negotiating the failed Google deal themselves, he says, Twitch hired bankers who drummed up other buyers, and he notes big companies sometimes want a deal just to keep a rival from having it.

2. 2

   Expect deals to die late

   Kan says Yahoo offered $1.25 billion plus $250 million in retention, then changed its mind the day after a final meeting where its CEO's wider vision for Twitch clashed with the team's wish to stay with gaming. Amazon then agreed to $1.2 billion with $200 million in retention before repricing to $970 million, take it or leave it, and he says the team, worn out after almost six months of deals, took it. Even after closing, he says, no money arrived for about a month while the Department of Justice reviewed the deal.

3. 3

   Don't get attached to the result

   Kan says the deal fell through three times, which he takes as a reason not to get attached to outcomes you can't control, in deals or in life. He recalls one investor saying on a board call that Twitch could be worth three or four billion, and says the board simply kept going because everyone wanted the deal done. He notes that Twitch has since been valued far higher, and says it looks like Amazon got a pretty good deal.

4. 4

   Treat equity as a gamble

   Kan says equity can become a life-changing payout or nothing, so take the bet only if you can afford it, which he says tends to mean being young with little opportunity cost. He says Twitch's own outcome could have gone many ways and that, in one way, they got very lucky.

5. 5

   Achievement doesn't raise your baseline

   Kan says he wasn't any happier after the acquisition: he had a lot more, but his day-to-day was no different and he was as unhappy as ever. He calls the drive for fame, money and achievement a trap when it relies on the outside world, and says lasting peace came much later, from finding intrinsic motivators.

In Justin’s words

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