Background

How to sell your start-up for 3’200’000 CHF

Flurin Müller (30, grown up in Chur) is a lucky guy. As a business information technology student he had an idea: a referral network for jobs. Four years later he managed to sell his start-up BuddyBroker to the global career network XING – for 3,2 million swiss francs! And it seems, that this was just the beginning. Start-Alp wanted to know the whole story.

How did you come up with the idea for BuddyBroker?

During my last year at the university, I was tasked with determining the topic of my bachelor thesis. While doing so, I came to the conclusion that it would be more engaging to work on a practical topic instead of writing an empirical study. That’s when I came up with the core idea of BuddyBroker. In the end, I was fortunate enough to be able to write a business plan as my bachelor thesis.

«The initial idea was to create a referral network for jobs, where anyone could refer people from their personal network for a job and receive a referral bonus. A company who published a job on BuddyBroker would only have to pay a fee if the job was filled.»

What did you do next, to make your idea become reality?

At the end of my study at the HSLU in Luzern in 2012, I submitted the business plan I wrote to Venture Kick. I got my first 10’000 CHF in funding to kick off the idea after a successful pitch. That’s also where I met the first investor, Roland Zeller. In the end, Roland, another friend of mine and I decided to give it a real try and fund the company right after I completed my studies. At the beginning, I worked from home. Then I formed a small team in Zurich and moved into our first office at the beginning of 2013. We successfully closed a bigger seed investment round in that same year.

How did you get XING’s attention?

After pushing BuddyBroker forward for a year and a half, I had to learn on the hard way that the initial business model didn’t work out. Too few people participated in the referral process and the conversion rates were overall too low. We couldn’t deliver on our promise to our clients. We ended up burning most of the venture capital gathered and I had to let the entire team go.

By the middle of 2014, it was only me and the investors left. As a last act of hope,we merged the company with another recruiting start-up called Eqipia. Together, we assembled the most promising assets from both sides and reshaped the initial business model. From then on, we focused on employee referrals. We built a B2B product that allowed companies to hire more people through referrals by leveraging their employees’ network.

With this new product approach, we hit a market in which XING wanted to become active in the near future. That’s when XING contacted us a first time for an initial talk. At the beginning of 2016, the talks became more concrete and we started to discuss a potential acquisition in detail.

How was the dealing-process with XING?

There were many synergies between us and XING. We quickly felt that both parties wanted to make the deal happen, which speeded things up. Nevertheless, it was a nerve wracking and intense negotiation phase where the deal was shaky until the very last minute – fortunately with a happy end!

How did you and your team, family and friends feel about?

We tried to inform our team as early as possible about the ongoing negotiations to get their support. Luckily, they backed our intentions, making it a lot easier to get through this phase. In the end, everyone in the team was pleased with the outcome. And regarding my families and friends: After more then three years of entrepreneurship madness with almost no breaks, they were all relieved that my situation seemed to ease up a little.

Was there any time to celebrate the deal?

After signing the deal in Hamburg at the headquarter of XING, we went for an extensive dinner with all the people involved. Afterwards, my co-founder Patrick Mollet headed towards the Reeperbahn were we celebrated intensely from dusk till dawn. The tough part came the next day when we had to introduce ourselves at the XING company meeting in front of almost 1000 people in the shape we were in after that night…

Talking about celebration: Flurin playing the guitar for his former band Hasacuma in 2015.

Back to business: What has changed for you and your company since you sold it?

The pressure from the last few months was gone for the most part after the acquisition. For the first time in years, I didn’t have full responsibility anymore for an entire company. On one hand, it was pleasant not being the one who needed to pay all the salaries. On the other hand, I also had to learn that certain things got decided without me being involved. Overall, my work days are less hectic and dramatic, and I’m able to focus better with the responsibilities being shared.

Where does your company stand now?

We’re now fully integrated into XING (the brand and the product). The product is now an official part of the portfolio of XING since last October. We operate from multiple locations such as Hamburg, Barcelona, Zurich and Vienna. After joining XING, I learned a lot about scaling a product within a bigger organization with multiple teams and departments involved.

What are your next goals with your team? With XING? Personally?

After a rather extensive technical integration, we now focus on making the product commercially successful by leveraging all XING assets. Part of the work involved is to integrate the product deeper within other existing XING products and the social network.

From a personal perspective, I’m satisfied right now with my situation at XING, but I would be lying if I said I didn’t miss certain elements of pushing my own startup forward. At some point, I will definitely dive back into entrepreneurship – but so far there are no concrete plans.

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The young entrepreneur 2014 in the BuddyBroker office in Zürich. Credit: Flurin Müller

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