Why Google’s Smaller Acquisitions Should Make Bigger Headlines

When you’re a young entrepreneur who has invested your entire heart and soul into a tech startup, having the chance to partner with Google, a veritable titan in the technology world, would be a dream come true. Google’s history is riddled with them seeing great potential in young startups and acquiring them in order to incorporate some new and fresh ideas into their day to day operations. Some of these acquisitions can be very high profile. Google’s recent takeover of Nest Labs received a great deal of media coverage. Nest Labs is a U.S. based company that develops Wi-Fi-enabled programmable thermostats and smoke detectors, and they were acquired by Google for a final selling price of $3.2 billion. When you’re dealing with that kind of money, of course people are going to pay attention. However, there are a great deal of interesting startups acquired by Google each year that will receive little to no attention in the media. In fact, Google isn’t even required to publicly report any acquisitions that amount to less than a few hundred million dollars simply because they mean so little in the grand scheme of things for a company worth $55 billion. But, just because there may not be as much money involved in these smaller acquisitions does not mean they are any less noteworthy or interesting.

Back in May of this year, Google acquired a small startup called Divide for $120 million. Divide was a largely unknown company and because it is an enterprise startup not many people paid notice to the sale. It just doesn’t have as much “wow” factor as something like a Nest takeover. This type of thinking is a little short sighted, however, because when you get to know the incredibly smart and hard-working people behind stories like this you just may be meeting the future power players of the technology world.

Divide is the brainchild of three friends, Andrew Toy, Alexander Trewby, and David Zhu. The three met while working in the mobile technology division of Morgan Stanley and they became accustomed to bouncing many potential business ideas off each other during their commutes to work. This is how they came up with the idea that would eventually become Divide. During this time, Blackberry was the corporate mobile device of choice, which meant that many people would end up carrying two phones with them. They would have their Blackberry for work and an Android or iOS phone for personal use. Toy, Trewby and Zhu recognized the inherent inconvenience of having two carry two different devices so they came up with the idea of developing software that would solve this problem. Divide is an app that virtually splits a phone in two, with one half being for a corporate account that can be controlled by IT departments and another for personal use that is completely private.

The three friends quit their full-time jobs to focus entirely on bringing their vision to life. They managed to scrape together $500,000 from some former bosses at Morgan Stanley and then scattered themselves across the world. Toy was in New York, Trewby was in London and Zhu was in Hong Kong which allowed them to run a round the clock operation which, one would have to think, is extremely necessary for a young startup that is trying to gain its footing in such a highly competitive business.

They spent the next several months developing the software and their initial intention was to partner with manufacturers like HTC and LG and have the software loaded onto the devices before they are sent out into the marketplace for purchase. They were able to secure many meetings with venture capital firms for investments talks but just couldn’t seem to get the deal they were looking for. It was a chance meeting with Android founder and Google Ventures partner Rich Miner that would eventually set them on the path to becoming millionaires.

Miner told them point blank that trying to partner with device manufacturers would take way too long and eat away at any investment money they managed to acquire. His suggestion was to develop an app instead as it would be simpler and more cost effective in almost every way possible. While they did feel some discouragement after this meeting Toy, Trewby and Zhu took this advice to heart and began working on an app immediately. Not long after, they started to receive interest from companies like AT&T and Verizon who eventually agreed to start selling Divide’s product to their business clients. This caught the attention of tech-giant Qualcomm who decided to invest $11 million dollars into Divide which, in turn, also caught the attention of Google who also decided to become investors. By early 2014, Divide was enjoying millions of dollars in revenue and employed 70 people.

Riding high on this wave of success, Divide had several acquisition talks with various companies but it was Google who ended up providing the best offer. All 70 Divide employees got to keep their jobs and the three co-founders were given prestigious management positions at Google offices around the world. It’s certainly no easy feat in today’s technology world to get the attention of companies like Google and Qualcomm, let alone convincing them to give you millions of dollars, but the founders of Divide believed in the importance of hard work and the quality of their ideas and everything worked out quite well for them in the end.

It’s a shame this wasn’t a more prominent news item back in May because what happened to Toy, Trewby, and Zhu is inspiring to all young entrepreneurs who might grapple with doubt or lack of confidence when trying to get their ideas off the ground. These people need to be reminded that there is always someone in the higher echelons of the technology world who is looking for the next great idea, and that idea could be theirs. On top of that, the three founders of Divide are now managing important projects for Google and could make invaluable contributions to how we use technology for years to come, thus making them prominent figures in the world. It would be great to say “we knew them when…”.

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