Concept

Inflict Pain

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Inflict Pain

‘Inflict pain’ is Julia Schottenstein‘s name for the way a startup gets itself acquired on good terms: compete hard in the area where you hold a competitive advantage, make it impossible for a strategic buyer to ignore you — and do it with a smile. It sits inside a larger thesis that M&A is always about creating Plan Bs.

M&A as Plan B

The strongest position in any acquisition conversation is not needing one. A founder who has built a genuinely independent company holds the upper hand, because the credible alternative — do nothing, stay the course — is always on the table. Most companies, though, lack a path to standing alone forever, so they must think about M&A; and the purpose of M&A strategy is to manufacture optionality before it is needed. The time to start, therefore, is when you do not yet need to sell.

The tactic

For any one company, Schottenstein argues, there are only ever two or three buyers who find what you are building extremely strategic. Getting noticed by them is the game:

  1. Find your edge. Identify the area where you out-compete the potential buyer.
  2. Inflict pain there. Be loud and technically credible exactly where the buyer is weak or slow, so their ears perk up — ‘what’s going on with this company?’
  3. Stay friendly. Position as a partner, court the buyer’s community, keep the door open. The common founder error is shutting that door prematurely by taking too competitive a stance — which destroys the optionality that is the whole point.

The canonical case is dbt Labs’ acquisition of Transform. dbt had distribution and ecosystem but was slow shipping a semantic layer; Transform, a technically strong pure-play with no distribution, was vocal about solving the hard problems while positioning as a friendly partner to dbt’s community. The pain created strategic urgency; the friendliness meant that, when the time came, dbt was glad to buy — and integration was already half done.

Adjacent moves

  • Plant seeds early. Buyers should know who you are — ideally through impact, or pain — well before any exit moment. Use a buyer’s corp-dev team: take the meeting, decline to sell yet, and push for an introduction to a deal sponsor in product or a GM.
  • The buyer set. Build a short list (a dozen at most) of companies for whom you are genuinely strategic, qualify out the sidelined ones (just did a deal, headcount-frozen, spooked), and run the inflict-pain playbook on the live two or three.
  • Code words. ‘Evaluating strategic alternatives’ means you are selling; ‘strategic partnership’ is the soft opener when you still have runway. If you have time, don’t say M&A at all. If you’re out of time, be transparent and cast a wide net.

Where mainstream views differ

The inflict-pain playbook cuts against two pieces of conventional M&A wisdom.

  • ‘Never look desperate.’ Traditional advice is to keep a sale process quiet and project strength, lest buyers smell distress and lowball. Schottenstein agrees this holds while you have runway — but endorses Hunter Walk’s contrarian view that, in a genuine Hail Mary, transparency beats coyness: too many companies are distressed for the bluff to work, and being public widens the net.
  • Competing versus courting. The instinct is to treat an incumbent as an enemy to be beaten or avoided. The inflict-pain view treats the strongest competitor as your most likely acquirer, so hostility is strategically expensive — you compete to be noticed, not to burn the bridge.

The honest caveat: the evidence here is a single case, told from the buyer’s side. It describes what made an acquirer act, not a measured seller win-rate, and the ‘two to three buyers’ / ‘dozen-company buyer set’ figures are heuristics, not findings.

See also