With HoneyBook buying AppMyDay for several million dollars, Geektime brings you behind the scenes to see how friendship transformed competitors into partners
Event management platform HoneyBook was already in the big leagues after raising a stunning $32 million in just two rounds in barely two years. Now the word is out exclusively to Geektime that they have laid down a few million to acquire AppMyDay, a service focusing on event photography.
The exact sum of the deal was not disclosed, but it’s definitely enough to recoop AppMyDay’s investments from Firstime Venture Capital and Star Farm Ventures. All the photos in the AppMyDay network will still be available for download for the next six months, but the app will no longer support new events.
HoneyBook provides logistical services like contract bids, invoicing and communications. They also cover the fun stuff like photographers, DJs, hairdressers, florists and other artists. AppMyDay provides a conduit for attendees to upload pics they took at a given event, during the event and afterwards. Event organizers can use the photos for display during the event itself, streaming them to screens set up at weddings, conferences, parties and concerts. The app has been used for thousands of events already, handling over one million photos uploaded by more than 300,000 users. Founded back in 2012, it had raised $900,000 in a seed round in 2014.
From competitors to partners
Speaking to Geektime, Guy Eldar (AppMyDay) and Oz Alon (HoneyBook) took us behind the scenes of the negotiations between two companies that were perfect competitors that began more or less at the same time. Despite all that, the two entrepreneurs met and were open with each other.
“Guy invited me to their offices in South Tel Aviv and we just started to show each other what we were doing,” Alon told Geektime, “because at the beginning of this road we didn’t think it could hurt.”
It wasn’t long after that HoneyBook entered the the UpWest Labs accelerator in San Francisco and all the founders moved to the U.S.
Eldar chimed in, “After we raised our seed round, we started thinking about activities in the American market and sat down with Oz to talk about a number of things like who we should talk to over there.” Alon even asked one of his event coordinators to help out Eldar’s team. “I got to San Francisco to recruit more clients. We dropped in on HoneyBook to say ‘thank you,’ to the team and we started talking. I was going to make a decision about AppMyDay, whether to raise more money under certain conditions or try to create a partnership with someone to get our product a better presence in the United States.”
Alon commented, “I remember that the two of us were complaining to each other; Guy about the difficulties in raising a Series A and me about the hardships after raising Series A. I think whenever you raise money you ask yourself afterward ‘What have I gotten myself into? What am I gonna do now? Where do we go from here?’ There are new sorts of growing pains and the pressure goes up. This is something you feel whenever you raise money.”
The two founders were open to each other about how entrepreneurs seldom express those problems to others and have to give off the right vibes, that ‘everything is fine’ and how ‘everything is going well.’ But in this case, that revelation was a massive relief.
Alon noted, “When CEOs can sit down together and speak to one another about this ‘life and death’ pressure, then you have a CEO friend you can lean on.”
Putting it all on the table
It wasn’t just support that developed out of those conversations. They began to see the financial opportunity, to understand that there was a chance for both teams to profit from each other.
Eldar said, “I remember in one of those conversations we debated when the best time was to raise Series A, if we were in that place or not by looking at the numbers and seeing where we were going. We tried applying what HoneyBook did in the U.S. and to figure out if we were going in the right direction.”
Alon thought, “Ultimately it was a matter of timing. HoneyBook wanted to enter the world of mobile and expand its team.”
Eldar then said, “We had developed a technology that constituted a special type of infrastructure for events. Over the last three years we had figured out the depth and found the intersection of mobile and the events industry.”
“When Guy sent me an email with all the wavering about whether or not to raise money, this idea started crystallizing to just buy AppMyDay.” After speaking with his partners, Alon went back to Eldar. “We put it all out on the table and what this meant to us on our end. I explained that if it didn’t work out, that was fine and we would help them raise their next round.”
AppMyDay is now the official mobile division of HoneyBook and all their investors supported the move. Alon summarized the whole thing.
Eldar reflected, “It was important to me that Guy didn’t look at this like ‘I’m selling out,’ but as ‘I’m partnering.’ I wanted Guy to feel that he was leading his company into its next chapter with thousands of employees and millions of customers.”
Anything to say to the entrepreneurs reading this story?
“Competitors can be partners,” Eldar told Geektime. “Get to know your ecosystem. Personally.”
Alon had one last thing to say about that.
“If you are all in the same vertical, to create something meaningful and influential you need to really believe in what you’re doing so it resonates with your customers and embeds into your company culture. We believe in collaboration and that we two serve as an example of that.”
AppMyDay was established in 2012 by Guy Eldar, Omer Shoham, and Ran Entobe. HoneyBook was founded in 2013 by Oz and Naama Alon, CTO Dror Shimoni and Shadiah Sigala, an American entrepreneur.