“There comes a point when every startup founder does some soul-searching and asks the question: What is it that I actually want out of this?,” explained Ben Medlock, SwiftKey cofounder and chief technology officer (CTO), to a packed audience in London.
Medlock was speaking as part of the Re.Work Deep Learning Summit in the U.K. capital, but before matters turned to machine-learning, the computer scientist and entrepreneur was quizzed about the recent acquisition of his startup by the mighty Microsoft.
For the uninitiated, SwiftKey is the popular mobile keyboard app that enables users to type more quickly on touchscreens — it learns your writing style over time, based on historical data, and serves up “next word” suggestions accordingly. The company also boosts its predictive typing smarts by scanning texts from myriad third-party sources, thus learning common word-order sequences.
Though SwiftKey had built a reputation in the consumer realm for its Android app, behind the scenes it carries out significant research into artificial intelligence, machine learning, and natural-language processing (NLP). It also offers a software development kit (SDK) for third parties that allows them to integrate its language-learning technology into their own services. And in 2014, it finally launched for iOS after Apple opened up to third-party keyboards.
SwiftKey had raised north of $20 million dollars since its inception in 2008, and, as with any firm with investors to please, there comes a time when thoughts steer toward one of two possible exits: going public or being acquired.
“We started out just wanting to solve this problem of helping people to type,” explained Medlock. “But we were very clear that we never wanted to run a sort of… maintenance business. We were only interested in carrying on if we could see that we were growing and exploring new ideas.”
For a company such as SwiftKey, an acquisition always seemed to make more sense — it just never felt like a billion-dollar business that would take the public markets by storm. But the company wasn’t thinking about an exit when it first started talking to Microsoft.
“When we started talking to Microsoft a couple of years ago, we weren’t actively looking for an exit at the time — but it kind of prompted one of those soul-searching sessions,” continued Medlock. “And I think you kind of look at the core growth engine of your own company and what’s generating the cash and how likely it is that will continue to grow and how likely it is that will give you the opportunity to explore new areas of research.”
Ultimately, the decision to sell boiled down to one key question: How did the opportunity to grow as an independent company stack up against the near-infinite resources and reach provided by a much bigger company?
“I think if we had felt that being an independent company would give us the opportunity to keep growing and develop in a rapid way, we would’ve stayed independent,” said Medlock. “But we felt that — weighing things up — we would have a better chance of exploring some of these new ideas as part of a bigger company. We founded in 2008, and we felt that we’d done pretty much everything we could do as a tech startup in London.”
A sign of the times
These days, it seems any startup that gains a semblance of traction is snapped up within a couple of years. That it took eight years for SwiftKey to be acquired is perhaps a sign of not only where it was founded, but when.
“If we’d been on the West Coast of the U.S., we probably would’ve been acquired earlier,” said Medlock. “When we started in 2008, it felt like there were very few tech startups in London at all, and incredibly few that were really deep technology-focused.”
Though London has emerged as a hotbed for tech startups, it may have taken longer to gain the attention of suitable buyers, because the U.K. lacks the status of Silicon Valley. But the journey from small-time startup to one with millions of dollars in VC cash and hundreds of employees is one that Medlock doesn’t regret for a second.
“The life experience that you gain through the trials and tribulations of building a startup business — I think there is no way I would’ve traded that for an earlier acquisition and less heartache and stress and sleepless nights,” he said. “When you look back on it, it’s not really the value you’re proud of, it’s all the things that you went through and the people you worked with. And for me, that journey is well worth waiting for.”