Let’s talk about luck in startups.

Before anyone goes up in arms, a disclaimer. In my friend group we like to say success is like being hit by lightning: it’s random, but it helps to run outside on a stormy night with a ten foot pole in your hand.This is about the lightning.

In 2007 fraudsciences was raising a round. Red Point were running due diligence and asked us to talk to Scott Thompson, then CTO at PayPal. After one meeting he said, in his Bostonian accent, “if this really works I don’t want to partner with you. I want to buy you.” The rest is history: acquired for $169m, turned into PayPal Israel, birthed so many startups. Red Point missed on most of the round and folks there still remember us as the one that got away.

But it could have been so different. First, FSC had multiple competitors. ThreatMetrix, Kount, iOvation. Why us and not them? Because we were there at the right moment with the right endorsement. Second, no one else wanted to bid. Google and Amazon laughed us out of the building. PayPal lowballed us. But we had a 10x CEO and also, unbeknownst to us, the momentum behind Scott’s bid for the top job at PayPal. An acquisition made complete sense; he became CEO, we got bought.

Kind of a similar story with Analyzd. We were a great team but we were pre-product, and I was sitting at home coding the first version of what became Signifyd. Yuval was negotiating a term sheet with the leading VC is Israel at the time. We had a great BATNA but we also had something else: Klarna had expanded into mainland Europe and that created new loss pressures. It was about to raise a large round and needed validation on the risk and loss mitigation front. Klarna has tried to recruit but most senior people didn’t want to move to Sweden for a series B company back in 2010. So we took our time and eventually got to a number we couldn’t refuse. There’s a similar dynamic with trueaccord that hasn’t resulted in an acquisition (obviously) but it’s too recent to discuss.

Startups are unpredictable. You do your best, work hard, hope for the best result (often not an acquisition). Luck is having external factors – market timing, macro economics, and even internal politics – create favorable circumstances. It doesn’t take away from your hard work.