Days after AI coding startup Windsurf introduced that it’s being acquired by Cognition, Windsurf startup Jeff Wang took to X to supply extra particulars concerning the drama and uncertainty across the deal.
Windsurf was beforehand reported to be in acquisition talks with OpenAI, however that deal fell aside, with Google DeepMind as a substitute hiring the startup’s CEO Varun Mohan, co-founder Douglas Chen, and a few of its high researchers. Google would reportedly license Windsurf’s know-how as a part of the $2.4 billion deal — however not take an fairness stake within the firm.
This regarded like the most recent in the pattern of “reverse acquihires,” through which giant tech firms search to keep away from antitrust scrutiny by hiring key startup staff members and licensing their know-how, somewhat than buying startups outright.
However what occurs to the startups and the staff who get left behind? As we mentioned on the most recent episode of Fairness, one startup founder in contrast the departing Windsurf executives to a captain abandoning his crew aboard a sinking ship.
Wang, who had been Windsurf’s head of enterprise, turned the corporate’s interim CEO after Mohan’s departure. In his submit on X, he provided some sympathy to Mohan and Chen, who he described as “ nice founders” in a state of affairs that “should have been troublesome for them as nicely.”
Nonetheless, Wang recounted an all-hands assembly on Friday, June 11, the place most staff members had been anticipating to listen to concerning the OpenAI acquisition. As an alternative, he needed to share the information concerning the Google deal and ensuing departures.
“The temper was very bleak,” Wang stated. “Some individuals had been upset about monetary outcomes or colleagues leaving, whereas others had been nervous concerning the future. A couple of had been in tears, and the Q&A had been understandably hostile.”
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In Wang’s view, though the corporate “had misplaced some nice individuals and brought a severe blow to morale,” it nonetheless had “all of our IP, product, and robust expertise together with a wonderful [go-to-market] machine.” So Windsurf might nonetheless attempt to elevate extra money, promote, or simply maintain going.
That night, nevertheless, Wang heard from Cognition executives Scott Wu and Russell Kaplan, and he stated Windsurf management “took the Cognition method very severely from the beginning and launched proper into negotiations.” In his telling, what adopted was a frantic weekend of discussions with Cognition, whereas contemplating inbound curiosity from different potential acquirers and assembly with Windsurf’s remaining engineers to persuade them to not go away. (And as all that was occurring, “the timeline was exploding with memes and commentary.”)
The 2 firms had been a great match, Wang argued, partly due to complementary groups.
“Whereas that they had overinvested in engineering, that they had frankly underinvested in GTM and Advertising, and our groups in these features are nothing in need of world class,” he stated. “Then again, we now had been lacking a Core Engineering staff, and there’s no higher group of AI engineers than the lineup Cognition has assembled.”
Plus, Wang stated he and Wu (pictured collectively above) had been aligned on the necessity to “maintain all Windsurf staff.”
“That resulted in a key a part of the deal: structuring it to present a payout to each worker, to waive all cliffs, and to speed up all vesting for Windsurf fairness,” he stated.
The acquisition settlement was apparently signed at 9:30am on Monday morning, introduced to the staff shortly afterwards at one other all-hands, then introduced to the general public shortly after that.
In an interview with Bloomberg, Wang described that Friday all-hands as “most likely the worst day of 250 individuals’s lives,” adopted Monday by “most likely the perfect day.”
