A Founder Who Sold to Twitter Considers His Next Move (or Not)

One of the hardest things about life after exiting a business is the unending expanse of time now before you. It may seem like a luxury to those still in the grind of a job, but it can be very disorienting, like a boat on the open seas with no sight of land anywhere. For Jud Valeski, who sold his company to Twitter for $134 million, leaving his business was the only logical economic choice to make, but he hadn’t made a plan for what would happen next.

And that’s just fine by Jud, who thinks the question of “what are you going to do next” is hackneyed, overrated, and an illness in our culture. (I may have slightly overstated his emphasis, but not by much.)

I found this conversation really fascinating, with many lessons for would-be exiters around creating a marketplace of buyers and how to think about serial entrepreneurship.

You can read the full transcript below or listen to it here.

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Laura Rich: If it’s okay with you, let’s start by telling us about the company you started.

Jud Valeski: The company was a company called Gnip, G-N-I-P. We were a social data provider. We considered ourselves infrastructure for gathering kind of commercial grade, full fidelity, public social data. We had this belief that public social data was going to be interesting from a commercial standpoint.

Laura Rich: So this is also around the same time that Twitter was emerging on the scene.

Jud Valeski: It was just right around then. They had emerged. They certainly are not what they are today. You know, they were much, much smaller. One stat I like to use if I can remember it… There’s always the tweets per second stat. Messaging traffic rates are always an interesting measure of the popularity of a system before it’s overrun by bots and back in the day, we used to see tweet rates of like five tweets per second and then several years later, you can be in 100,000 tweets per second. So, we built a business around that, over the course of six years or so and spent a couple of years fumbling around, trying a couple of different models and then a couple of years honing one that seemed to be work and then a couple of years of really blowing that out and scaling the business and then ultimately sold to Twitter in March 2014 for $155 million.

Laura Rich: Very nice.

Jud Valeski: I think at the time, Twitter had done a very large number of acquisitions. I want to say it was in the neighborhood of 100 and we remain the most profitable business unit in the system today. And, as an entrepreneur, all you ever want to see is your thing continue on. That has certainly happened, which is very fun to watch.

Laura Rich: That is so great. I know a lot of entrepreneurs can really relate to wanting to have your creation live on and excel when it moves on. I wanted to also ask you about what was your role when the deal came about. I know you’re the co-founder. Can you talk about what your executive role was at the time of the exit?

Jud Valeski: Yeah, let’s see. The time of the deal closing, I was CTO. My co-founder had since left. By that point, six years in, kind of that original innovative nugget that is there when one starts an entity, was not. So, that kind of had evolved and, as a result, my role had evolved as well and across that span we had hired a seasoned executive veteran, who ultimately became CEO. We hired him as a COO and then over time, transitioned him into the CEO role. So, at the time of the sale, he was in the CEO seat, I was in the CTO seat.

Laura Rich: But then what happened was that you ultimately completely transitioned off.

Jud Valeski: Yeah, so as we were negotiating the deal, the prospect arose that perhaps the original founder did not have to go through with the deal and so we put a lot of energy into trying to discern whether or not that was prudent and possible and, you know, obviously a lot of concern in the moment around potentially derailing the deal. Spent a fair amount of time trying to measure that, engage that, and over the course of a few months, you resolve that it was not going to adversely impact the deal, the idea that I would not go through with it and-

Laura Rich: Right.

Jud Valeski: So, as things marched along, obviously did not.

Laura Rich: And you guys were kind of floating this idea with Twitter as you were kind of working it out on your end. What did that kind of look like?

Jud Valeski: Yeah, it was actually a really protracted thing. In a nutshell, you start probing the other side to understand what matters and what’s going to cause a reaction and what’s not, but on our side our CEO, Chris Moody, had actually brought it up at one point. He put it out, you know, look, the economics of the deal all wound up flowing as such that invested shareholders could be in one financial outcome and non-vested could be in another and so that vested outcome was significant.

Laura Rich: Yeah, after-

Jud Valeski: Actually, I owe a lot to Chris, because I’m not sure I would have necessarily figured it out on my own that leaving was the most economically sound thing to do. You know, one of those once in a lifetime economic dynamics you need to look at it pretty seriously and I’d been there six years and so my original founder stock was fully vested and so in terms of negotiation, there was no counter re-upping or resetting of any vesting dynamic on already vested shares. So, when the bulk of a founder position is ready to go-

Laura Rich: Yeah, what else are you going to do?

Jud Valeski: The financial outcome is obviously significant.

Laura Rich: Right, that makes sense. But, were you ready to leave the company? Did you want to go?

Jud Valeski: That’s what Chris helped me realize was, yeah, I was. When we first started down the path, that wasn’t all that clear to me, so I was moving forward with the deal negotiations as though I were still a part of the entity and trying to figure out the path forward accordingly.

Laura Rich: You expected you’d say on through the deal? So then what happened?

Jud Valeski: You know, through that became there was this moment of look, it’s been six years. Are you in this enough to essentially hit reset on the energy and kind of go start up again? And the answer to that was no. I’d done kind of the rest-and-vest thing 10, 15 years earlier through AOL’s acquisition of Netscape and it’s a pretty miserable place to be. When faced with having it again, it was a very obvious, oh my God, I don’t ever want to ever do that again. So, knowing I didn’t want to do that, it would’ve meant a full restart inside Twitter from a dedication and energy allocation standpoint and after six years in the social data business, it felt prudent to move on from that and take a break, so that aligned up.

Laura Rich: And so, what was it like waking up the next morning, after the deal was done.

Jud Valeski: Yeah, so it was sort of emotional. You know, you go from pouring your life into a particular thing, a product, a technology, a team, a day-to-day routine and then the brakes hit. You know, for someone who is spending all of their energy problem-solving and executing, it can be pretty jarring. So, yeah, it was suddenly the car slows to a stop and you have to reevaluate a lot of things.

Laura Rich: What was it like in terms of all of a sudden sort of not having somewhere to go, no structure? Was it sort of something like that?

Jud Valeski: Yeah, and it was knowing there wasn’t a re-entry date, you know? I think a year or two prior, I had taken a … I think it was a two-month sabbatical and as with any vacation, whether it’s a day, a week, a month and I would argue even a year, there’s a re-entry moment that’s in the back of your head and so you can decompress, you can disengage, you can dissociate, you can distance yourself from whatever your traditional daily activity is, but it’s always still out there somewhere in the distance and so just a different headset when suddenly that’s not there. Things start to get pretty existential in terms of what are we doing here, what’s next and so on.

Laura Rich: Did you start doing some soul searching or how did you fill your time?

Jud Valeski: You know, super early, I’m actually not too sure. I don’t really remember. I don’t remember the specifics, but it quickly turned into embracing my creative side, so I’ve always been on the software engineering side of things and I’ve never done a great job of blending science and art, so it’s always kind of been binary for me, on or off, so I kind of flipped the science bit off and the art bit on, and really dove into photography and a lot of travel, a lot of landscape photography. You know, go explore and adventure and photograph the world kind of thing. You know, that’s gone on for a good four years now and that’s been nice, it’s been fun. Opening up that side of your brain is a fun thing to do. You know, I’d like to be better at balancing the two and so that’s kind of a life goal going forward, is keeping those two things in some kind of symbiotic relationship as opposed to turning one off and shutting the other down at any given moment.

Laura Rich: What’s really hard about this is I think what you were talking about before, is that it’s very open-ended and it’s unlike a sabbatical or a vacation, where that ends.

Jud Valeski: Yeah, yeah, there’s this constant notion of reentry that services itself in conversation when the leading question is, “Oh, what’s next?” Or, “Oh, when are you jumping back in?” It’s virtually impossible for society to get out of that headset. We have “doing” ingrained in us, perpetually.

Laura Rich: I like that you’ve brought this up because I think a lot of people really do face this after selling their business. So, you’ve kind of decided or you did kind of decide at that time that you didn’t want to have to have something next.

Jud Valeski: I wouldn’t say I decided that, but there just wasn’t anything there. It’s not like I said, “Oh, there’s not going to be anything.” You know, certain milestones had been reached and I think often we continue to put goals and milestones out in front of us to progress us down the path. For me, there had always been this technical and economic path to walk down and when those milestones get hit, there’s a void. There’s an “Okay, that’s done, what else is there to do” kind of thing.

Laura Rich: Yeah, I can understand that. Though you did go and work for some other companies and even participate in launching some yourself.

Jud Valeski: Yeah, yeah, as time moved on, you get perspective shifts and you get different views into things and I was able to see how my energy could be expended on something beyond just economic goals and economic outcomes and, instead, more around environmental impact stuff, for example and founded another company with some folks recently around bringing bicycle utilization to urban areas. I’ve been a passionate bike rider all my life and the idea that there’s a new way to get people onto bicycles and using alternative forms of transportation was a real motivator.

Laura Rich: What’s the name of that company?

Jud Valeski: It’s a company called UrBike, U-R-B-I-K-E, UrBike.

Laura Rich: So, let me ask you this. When the economic goals are gone, are the stakes a lot higher for finding meaningful purpose in how you spend your time on work stuff?

Jud Valeski: Yeah, absolutely. Using UrBike as an example, once the tech platform was built out and the actual technical capability of enabling this kind of sharing model was built out, my operational interest in remaining engaged waned, so yeah, sure.

Laura Rich: So, then it’s time to go? It’s time to move on?

Jud Valeski: Yeah, so in this particular case, I moved on to join full-time operationally in an investment I had made a couple of years ago and deploying my passion around building engineering teams and building software and building product again in a different business, so tightly focused on the software side and T-construction stuff.

Laura Rich: I want to shift gears a little bit on you. I wanted to ask you about your personal life or on the home front and what kind of changes may have manifested there as a result of the sale or economic status?

Jud Valeski: Economic status, not really. You wouldn’t have noticed anything different at all, other than I wasn’t going into work. Even that wasn’t even completely true. I had built an investment firm afterward and was actively making investments for a couple of years, so that involved some travel around that, so it was work, but just not into an office with any kind of regularity. You know, the travel side, that was an odd shift. The more resources you have, you can quickly shift the way you travel. With a growing family, family vacations shifted. Take spring break, for example. You can really only wind up vacationing with peers that are in similar economic dynamics just from a resource standpoint and so that was a weird shift. The trips we wanted to do weren’t doable with a certain bucket of friends and multi-family travel took a strange impact or unanticipated impact, I would say.

Laura Rich: Did it change your relationship with those families?

Jud Valeski: No, I mean insofar as you’re not spending that time with them, sure. But, overall, no.

Laura Rich: Something I wanted to ask you about as well. You have two kids who are school-age and until this exit event, you were going to the office or traveling for work and now all of a sudden you’re home more and I wonder how did things change for them? Like you were more accessible because you’re around more?

Jud Valeski: Yeah, I would just say that, around more and so more accessible and more available. For the first few years, I really grappled with that, actually, because these are pretty impressionable years for them. April was a stay-at-home mom, so her role was already baked in, but then this idea that the guy who had been out there winning the bread is now suddenly home, is an odd dynamic. So, I have always kind of grappled with that. I have friends in similar situations who manage it one way. I was always, I don’t know, hard to explain or model for a kiddo that dynamic, kind of work ethic and intelligence deployment and so on, in a working environment, when you’re not in a working environment. So, I’ve always struggled with that, just personally.

How that bears out for them, I don’t fully know. You know, it’s normalized at this point. There’s already some of that in our community here in Boulder, so it’s not completely foreign to everyone. Still, it’s always kind of been an odd thing to me.

Laura Rich: So, I hear it a lot from entrepreneurs who sell their businesses, that it is just challenging to figure out that dynamic, plus, I mean, raising kids is hard no matter what. You know, I wanted to ask you also. We talked a little bit earlier outside of this conversation a little bit generally about post-exit transition and what happens after you sell your company and I wanted to get your thoughts on this sort of phenomenon and whether you think everyone goes through it after this?

Jud Valeski: No, everyone does not go through it the same. Certainly, no one goes through it the same way. I see plenty of treadmill people who just pursue exit, after exit, after exit, after exit. In some cases, that’s true love and passion for the components therein and they just want more, which is admirable in the pursuit of one’s passions and goals and it’s fantastic. Unfortunately, I think more often than not, it’s people simply not knowing any better. It’s all they know. Another thing I see over and over again is the okay, I just did this and in order to stay relevant, I need to get back on the treadmill quickly, otherwise, whatever shine there may be on me might wear off. In some cases, that’s economic. Their exit did not yield financial independence. In some cases, that’s confusion around possibly who they are and what they want to be doing with their lives and it’s part of that, “Okay, what’s next? What’s around the corner? What are you doing tomorrow” thing, right after the exit, and I shunned that immediately.

I just don’t believe certainly in that, for me. For some people that’s undoubtedly true that if they lose momentum, that it’s just part of who they are. They need momentum to continue and if they lose it, they may struggle, you know? Sometimes when I see an entrepreneur going through that, I feel bad and it’s like, just stop. Go find out who you are, like don’t keep this thing churning and then sometimes it’s there, the true, deep, passionate surreal entrepreneur and it’s like, I’m their biggest cheerleader, where it’s you know, go, go, go. This is who you are. This is what you love. Don’t stop. You know, and that’s just like anything else when someone’s applying their passion and their energy, that’s something that’s a force to be reckoned with and it’s awesome to see, but it’s … again, a lot of times you see just dazed and confused looks and then you get back on the treadmill because I don’t know any better and that’s always hard.

Laura Rich: Yeah, it is hard to figure out, how do you get off that treadmill and what do you do next and where do you look around to start finding yourself, you know? And what about for you? Are there some things that you wish you had done differently or wish had gone differently?

Jud Valeski: There was one … there’s this thing I think we screwed up. In the sale dynamic, we just did not have a marketplace and we had a buyer of one, which, if you’re on the selling side, is the worst possible position you can be in.

Laura Rich: Except, you did do okay.

Jud Valeski: We just did not have leverage. We should have staffed somebody full-time, totally dedicated to relationship in business development management with one of Twitter’s competitors and we talked about it here and there. We just never pulled the trigger. We didn’t pull the trigger because it felt like it was going to be a waste of money. In retrospect, a minuscule investment and could have had astronomical upside impact to us.

Laura Rich: This is kind of really interesting because you guys did do really okay and yet, this is what your lesson is to others. Can you talk about that a little bit?

Jud Valeski: The way this translates into advice for entrepreneurs is that that thing you think you should be spending passive money and passive energy on? You should consider making that more active and actually making a real investment. I think that would have been a pretty good thing to do, despite the fact that probably would have had zero ultimate impact, but I would have at least tried.

Laura Rich: And what about planning for … you know, I don’t know how it’s avoidable for it to be sort of a shock to the system when you’re no longer working on the company that you built and you were working on for the previous six years, but I wonder if you have thoughts on what can be done to anticipate what comes next?

Jud Valeski: Yeah, we talked about it a little bit the other day. There’s an arrogance in planning for something like this. It’s like, I’m going to plan for financial independence. I mean, heck, there’s probably superstition around it, where it’s like if you think too hard on it or you start assuming it or you start planning for it, you could jinx it.

Laura Rich: I hear what you’re saying, but I actually think that people can have a much better post-exit transition when there’s a little more planning. Oh, I did want to ask you one last thing and then I’m going to let you go and I really appreciate your time and thoughts on all this. Your airplane seat thing? You like particular airplane seats and I was wondering what that’s about and if your financial independence allows you greater flexibility in getting those seats?

Jud Valeski: Yeah, I’ve got a chunk of OCD and so specific seats on a plane matter a lot and it’s a twisted algorithm. It’s plane type, distance away from bulkhead, distance away from back of plane, aisle versus window and certain dynamics. Yeah, so it’s its own twisted beast.

Laura Rich: What’s the goal? What’s the ideal seat?

Jud Valeski: It depends on the flight and therefore, the time of day, you know? And whether or not it’s a commuter flight from New York, it’s to a new place. A simple slice of it is if you’re going to a geographically interesting place that you never go to, make sure you have a window seat on the correct side of the plane. A window seat on the wrong side of the plane, obviously doesn’t go by anything. And it’s funny, in a conversation with a buddy of mine three or four years ago, we were talking about some of this identity stuff. He actually passed something along to me that a friend had passed along to him that I thought said everything. The setting was life before an event and life after event, really isn’t much different with the exception of when you board a plane after the event, you turn left instead of going right.

Laura Rich: Turn left into first class, but it’s the same plane.

Jud Valeski: Exactly, and that was kind of the point, was there’s a difference. It’s subtle, and then at the end of the day, there’s no difference at all because-

Laura Rich: Right, we all die.

Jud Valeski: -it’s the same plane going to the same destination with the same set of people on it. So it was just kind of a funny way of thinking about it.

Laura Rich: Well, you know what? I think that is a perfect place to conclude our conversation. I have so enjoyed talking with you today. Thank you so much for being on the show and sharing your experiences and great advice for everyone.

Jud Valeski: Yeah, it was a lot of fun. Thanks for the chat.

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