Reaching Escape Velocity (Dept buys Rocket)
Less than four years ago we launched Rocket as a new kind of product agency. Our goal was to create a company that lived and breathed the craft of software. Our hypothesis was that a holistic product agency executing across the entire product development lifecycle would be better able to service clients and accelerate their business.
Well, our hypothesis has proven largely correct. After four years of ~100% growth per year and building a reputation as one of the best agencies in Boston, we have some exciting news to share.
Rocket has reached escape velocity. We have sold Rocket to the Dutch agency Dept and have joined forces. Together we are going to build a top-tier, worldwide agency that supports the entire product and marketing lifecycle. This is extremely exciting for us and we want to share all the details.
We are announcing the acquisition today. Here is the press release.
Who is Dept?
Dept is a full-service digital Dutch agency founded by two brothers: Paul and Bart Manuel. After running a successful agency for almost two decades in the Netherlands called TamTam the brothers wanted to expand their reach to the rest of Europe. Roughly four years ago they started doing so as Dept. Their plan is to acquire highly effective agencies who are growing quite well and unite them under the Dept brand. In the past four years Dept have acquired 16 companies as part of a growth plan to become a full-scale European agency. They have now set their sights on the global market and Rocket is their first big acquisition in the U.S.
First Contact
Back in the fall, Dept reached out and asked us if we wanted to talk. They were looking for an American agency that was in the product space and growing well. We were not actively looking to sell but had since our founding agreed that we would consider a deal from a company with the right culture fit. Our early conversations went very well and so we continued discussing what it might mean to be a part of Dept. Both sides shared their view of the world and their values. We found out that we are extremely well-aligned, including caring about clients and employees above all else. First contact was successful.
To Amsterdam
So in November the four Rocket partners flew to Amsterdam to meet the Dept team. We met Paul and Bart. They were not only thoughtful and curious but extremely well respected by their team. Their supporting Amsterdam cast (including the CEO Dimi Albers and COO Frank Schmidt) were intelligent, ambitious, and loved to execute like we do. We got along shockingly well for just having met. We quickly came to a tentative agreement to be sold.
Due diligence
The due diligence phase happened over the holidays. We negotiated a lot of finer details about how the acquisition will work exactly, from the employment contracts to how often we would be meeting to the potential of traveling to Europe and how we might share work between offices and teams. We also did financial due diligence to ensure the deal was feasible.
The shareholder meeting
Early in 2019 we traveled to Rotterdam to meet another big chunk of the team at the Dept shareholder’s meeting. This was a huge moment for us. We met all the other agency founders that had over time become part of Dept. We were extremely interested in what they had to say…and asked them a lot of questions. What was Dept like? Did your company change after you sold to Dept? What is the Dept culture? We came away from this experience extremely positive that Dept is a collection of highly motivated, ambitious entrepreneurs at the top of their game. We wanted to be part of that.
Coming to America
Then Dept came to America to meet our team. They told us it was important to meet our people and understand how our culture worked from top to bottom. They came away impressed and told us that they could tell that Rocket employees really love what they do and respect each other's work immensely. Our biggest takeaway from their visit was that Dept was acquiring us in the right way by focusing on the right things: our clients and our employees. We appreciated that and were ready to sign the deal.
Doing the deal
On February 28th we signed the papers and the deal was done. Rocket is now officially part of Dept. Yay! After six months of hard work we are now ready to face the future together.
And so now the questions begin...
What does this mean?
What will change now that Dept has acquired Rocket?
Well the four Rocket founders aren’t going anywhere. We plan to continue to run Rocket how we’ve run it the last four years: as a strong strategic and execution partner to our clients. We don’t plan to change much at all about our day-to-day interactions with our clients. Dept acquired us because we have been successful at designing and building products for a large number of clients and we're going to keep doing that.
We are also keeping the entire team. The designers and developers who make up Rocket will continue to work on their current projects. Every single Rocketeer is critical to our success. To illustrate how serious we are about this, consider that at the end of year 2018 Rocket was made up of roughly 100 people: 94 designers and developers, 4 partners, and 2 operations people. So we aren’t changing our roster at all because everyone has a very important role to play. If anything, we will add some more supporting folks in HR and recruiting.
What will change?
While we are trying to keep the business running the same, some things will change, hopefully for the better.
Rocket/Dept can now offer deeper product building and growing services. We’ll work with the rest of Dept to provide clients with deeply integrated services that reach up into marketing and down into growth and e-commerce. Instead of clients having to go several places for deep expertise, they can come to a single place and get expert product knowledge for all parts of their business.
The Rocket brand will change over to Dept. While we have created a strong brand in Rocket that we are very proud of, we also realize that there is a great opportunity to create an even stronger global brand in Dept. We will transition at some point over the next year.
We are going to expand more quickly into the rest of the U.S.. Both Rocket and Dept share a desire to reach a larger audience in the states, and this acquisition will help us do that. We are going to be looking for other highly-effective agencies who do specific things very well and in some cases acquire them. Dept's acquisition plan is working very well so far and we are going to help them bring that to the U.S.
Other things will change as well. We're not sure what. There will be surprises, scares, achievements, and setbacks. We will have to adapt every day to the changing markets, projects, and competition. We feel better prepared to take on all of those changes now that we are part of something bigger in Dept.
Who makes this possible
Building and running a business is a lot of work. It's not only the design and development work we do while building software, it's the relationship work we do with our clients to help support their businesses. But even more than that it's the life work we do with our families and friends, supporting one another each day, keeping our heads on straight when we're down, and celebrating the wins when they do come. We are so thankful for the everyday support we receive from our family and friends. Without you, none of this is possible.
Make no little plans
I will leave you with a quote by Daniel Burnham that often comes to mind when thinking about our work here at Rocket. It is a reminder that it is not the moment of success that is the goal, but the daily practice of setting ambitious goals and striving for them. It is the day-to-day, in-and-out work that makes our lives interesting and livable in the end.
Make no little plans; they have no magic to stir one's blood and probably themselves will not be realized. Make big plans; aim high in hope and work!...