INC.COM -- July 30 -- Bebo's founders talk about selling their
three-year-old company to AOL for a $850m and what they plan to do
next. After paying off their investors, Birch and his wife and
business partner, Xochi, pocketed more than $500m.
Q: How did the sale come about?
Michael: We'd been approached
by various companies, and we'd always said no. The combination of
AOL's strong presence in the U.S. and its product AIM made us think that AOL and
Bebo could feed off each other.
Q: Many people were surprised that AOL paid $850 million for Bebo. Were you?
Xochi: With our growth in the U.K. and
position in the U.S., we wouldn't have let the business go for less.
Q: Do you worry that some of Bebo's employees might feel that you sold too soon?
Xochi: I believe the employees
were happy with the deal and what they received from it.
Q: Why is Bebo big in Britain but not in the U.S.?
Michael: We entered a very competitive market in the
U.S., whereas only maybe 10% of our target market in the U.K.
was using social networks when we started.
Q: Did you worry about lagging too far behind Facebook and MySpace in the U.S. in terms of traffic?
Xochi: For us to go from
nowhere to where we are now, we think we hit our goals.
Q: This was your sixth business in nine years. Did those earlier businesses inspire Bebo?
Michael:
We definitely came away wiser from one venture to the next. Xochi and I
started doing websites in 1999. Three of them folded, and three were
successful. One of them was a social network Ringo,
which we sold in 2003 for a few million because we were having some
financial problems.
Xochi: It
was really a difficult time for us. We were broke.
Q: What was the biggest mistake you made with Bebo?
Xochi: We
were too slow to hire in the early days.
Q: What's next?
Michael: The current plan is to take a couple
of years off. I want to
contribute to a nonprofit venture in the U.K. and encourage more
entrepreneurship there. And I'll do more angel investing and advising.
Xochi: I'll do more angel investing, too.
Q: Have you bought any toys since the deal closed?
Xochi:
We bought a silver Mercedes-Benz S-Class AMG and a black Land Rover Defender.
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