Interestingly, according to Axios, the price was pretty limited: "Amplitude (Nasdaq: AMPL) acquired CommandAI, an SF-based software user experience startup, for $20m (net of cash). CommandAI (fka CommandBar) had raised around $23m from Insight Partners, Itai Tsiddon, Thrive Capital, and BoxGroup."
I would be curious to learn more about the rationale to sell the business as I understand the strategic value to Amplitude. Interestingly, these next-generation digital adoption platforms have generally been pretty challenged.
The number that was reported in term sheet / pro rata did not include any stock, which was a big part of this deal. The total consideration for CommandAI was north of $45M. We're working with them to issue a correction. Long story how the wrong number got reported- mostly too much telephone. It was also a good outcome for their investors in that they were able to return more than what was raised.
We at Amplitude approached the Command AI founders about joining Amplitude. They had a bunch of runway and good growth numbers. They were initially planning to raise another round of fundraising to continue to scale their business instead. It took some time on both sides to figure out what the win-win combination would look like.
We're honored that they decided to combine with Amplitude and are excited about what the combined products look like.
Command AI co-founder here. What I'll add to Spenser's nice comment is that there was this strange tension when we were deciding to do this between: (1) Feeling like the only right outcome for a growing startup with runway is to keep going and try to build a massive independent company, (2) Realizing that we can probably grow faster as part of Amplitude (obv with less upside capture)
Obviously if your growth is so epic and you're a top 1% company, the choice is obvious. But there are a lot of companies that are doing well outside of that group that I don't think allow themselves to consider the acquisition route. We were like that until Amplitude reached out and we got good counsel to seriously consider their offer.
You almost don't have to snoop for details to have a good guess at what happened. If the acquisition announcement is the first time in a year or more that you're hearing from this company and they omit the sales price, you can bet this isn't the exit most parties wished for. Although by this stage the founder(s) is probably happy to find a buyer who will retain their team.
> you can bet this isn't the exit most parties wished for. Although by this stage the founder(s) is probably happy to find a buyer who will retain their team.
I've seen a startup that was bootstrapped 10 years ago but took on too much money and ended up getting acquired for "undisclosed sum" but at the same time everybody knew the investors were just recouping their money while founders got nothing (they had sold their equity for raising more money as their costs were way up but nobody was buying their product). Cue local news reporters don't know the nuances so they'll just announce "Startup X acquired by Y, wow!"
Founders place a lot of emphasis on getting "acquired" but there is roughly 95% chance of you selling at breakeven where the terms leave you with a year's worth of salary as a junior SWE
Get ready to see a lot more of these "acquired" news coming out in the near future. something around less than 1% chance of getting more money than you put in.
Startup has horrible odds especially if you are building a simple GPT wrappers
What’s interesting is how much it contrasts with TechCrunch’s story: ‘Most of Command AI’s 30-person, San Francisco-based team will be joining Amplitude. Command AI’s co-founder and CEO James Evans wouldn’t reveal the terms of the deal, but said candidly that an acquisition wasn’t something he’d been planning on.
“Our growth was great and we had plenty of runway,” Evans told TechCrunch. “We weren’t out shopping ourselves or anything. But when Amplitude reached out a little while ago — this summer — we got really excited about the combination and became convinced that we could grow faster and reach more users together.”’
People want to save face. Some more than others. I also read the TC article and thought they were trying a bit too hard to make this seem like a good outcome.
Nothing against the founder. It's just how the game is played. And there's little to gain from deviating from the norms.
Edit: It benefits not just the founder’s ego but also the future career prospects of the employees. Big difference in your engineers being able to say “I worked at X all the way until they got acquired!!” and “I worked at X but the product was so unsuccessful we had to have a fire sale.”
That's too bad that the TC article read that way. They returned more money to investors than what was put in, which puts them in the top ~20% for acquisitions of this scale. The crazy part is even a lot of the 1B+ privates aren't able to do that (eg Lacework)
Congrats to both sides! As someone who used CommandBar (which became Command AI), Amplitude really leveled up their team. Not everything ends up being a standalone project, but that doesn't mean combining forces won't work better for everyone.
> First, some context for our customers: the Command AI product remains operational and will continue to be indefinitely. Over time, we will be migrating key infrastructure to Amplitude, so you may see some changes, but all of those will be communicated with plenty of lead time. There will be no disruption for your users; in fact, we think in the near term things will be getting better for them.
The current plan is to port all existing functionality to Amplitude's platform as quickly as possible. We'll then migrate everyone over in a way that doesn't break existing functionality and continue running it indefinitely. We're working through the details now.
I share your skepticism of B2B companies making claims of being AI driven! Most stuff I see is a thin wrapper around an existing workflow where the AI isn't adding any meaningful functionality (also see: crypto).
We've been very deliberate about integrating AI functionality in a way that's additive: recommendations, proactive insights, and summarization are all areas that are a leap forward in the data space. What the CommandAI team has done is legit- it's their fastest growing functionality in terms of usage. We'll have more here soon.
literally 90% of AI startups right now are some combination of the above and their "edge" is just a long system prompt that tells them to "be this niche and output response that mimics an expert from that niche"
This was never going to work out because OpenAI is literally watching everybody and how they are using it including prompts. AI wrapper startups serve these functions:
- wrappers prop up NVIDIA which are owned by the people giving VCs the money to invest in wrappers who are long Nvidia too.
- wrappers give OpenAI RSU holders a fuzzy warm feeling and they are able to see what the market is doing with their product so they can pull "Amazon Basics"
- IRS, attorneys, accountants, politicians love them all because they all get to squeeze milk from the fume
While the space is hot and most will fail, I disagree with the general negative sentiment. The same could be said for most/all startups. They all can be distilled into some simple implementation.
Exactly. "All SAAS for b2b is just an SQL wrapper". That's until they do something distinguishing, make implementation easier/faster/cheaper or come up with a new technology. Yes the playing field is level now, but what can they do in 1,3,10 years? How will new models play into this?
> The same could be said for most/all startups. They all can be distilled into some simple implementation.
Hard disagree. There are lots of niches and businesses are complex. If everything was CRUD the people who are using no-code app builders would win against the ones who code, which hasn’t happened despite continuous attempts for 20-or-so years.
Now, I don’t know if GP is right, but assuming that it’s true (many prompt wrapping startups), then yes absolutely they are completely owned if they sit on top of an existing “platform” which can see everything they’re doing. That’s much worse even than selling IaaS on top of aws.
It was the same during the blockchain hype peak – you’d see lots of startups that forked some existing project and replaced the name of a token, and created a website to drive hype.
Not sure if you are trying to prove my point or not. Indeed businesses are complex. With every wave there are a large number of copycats and business with no moats. Many factors go into who win and who does not. Unlike blockchain and whatever you are trying to prove. There is already value being proven with the current wave in AI. Overvalued in the near term but undervalued long term.
Not sure anyone was trying to say no code apps would win.
We can already see that it’s possible to create comparable models in the LLM space. You could just as easily run your business off OpenAI models through azure. You have a hard sell trying to convince that azure is going to steal your data and roll a product of their own. Might as well tell us aws is stealing your web app.
> Not sure if you are trying to prove my point or not.
Yeah maybe we’re talking over each other. My point is that it all depends on what you build. A wrapper with an elaborate prompt does not too me sound like moat (I can be wrong). That’s where the bigger fish would not leave money on the table and eat them all.
That said, I suspect the company in question has much more moat than that. End user products make or break based on details in UX, even if they’re “doing the same thing” from 1000m away. And once the dust settles, the tech that’s integrated well into products win anyway, no matter the VC hype and valuations.
I have a feeling people are overthinking the whole "we need to have a moat" and really the best moat you can have until you're a multi-million/billion dollar business is your craftsmanship (as silly as it sounds).
Good UI/UX is still the edge as technology becomes more of a commodity.
"Write an acquisition blog post that makes it look like we admire the company that bought us, and we're not in it for the money and that it was a hard choice."
Interestingly, according to Axios, the price was pretty limited: "Amplitude (Nasdaq: AMPL) acquired CommandAI, an SF-based software user experience startup, for $20m (net of cash). CommandAI (fka CommandBar) had raised around $23m from Insight Partners, Itai Tsiddon, Thrive Capital, and BoxGroup."
I would be curious to learn more about the rationale to sell the business as I understand the strategic value to Amplitude. Interestingly, these next-generation digital adoption platforms have generally been pretty challenged.
Amplitude CEO here. To clear a few things up:
The number that was reported in term sheet / pro rata did not include any stock, which was a big part of this deal. The total consideration for CommandAI was north of $45M. We're working with them to issue a correction. Long story how the wrong number got reported- mostly too much telephone. It was also a good outcome for their investors in that they were able to return more than what was raised.
We at Amplitude approached the Command AI founders about joining Amplitude. They had a bunch of runway and good growth numbers. They were initially planning to raise another round of fundraising to continue to scale their business instead. It took some time on both sides to figure out what the win-win combination would look like.
We're honored that they decided to combine with Amplitude and are excited about what the combined products look like.
Command AI co-founder here. What I'll add to Spenser's nice comment is that there was this strange tension when we were deciding to do this between: (1) Feeling like the only right outcome for a growing startup with runway is to keep going and try to build a massive independent company, (2) Realizing that we can probably grow faster as part of Amplitude (obv with less upside capture)
Obviously if your growth is so epic and you're a top 1% company, the choice is obvious. But there are a lot of companies that are doing well outside of that group that I don't think allow themselves to consider the acquisition route. We were like that until Amplitude reached out and we got good counsel to seriously consider their offer.
Thanks for giving a straight answer on the acquisition price.
Having a little clarity on outcomes like this can help founders make better decisions, really appreciate it.
Thanks for the transparency and thoughts!
You almost don't have to snoop for details to have a good guess at what happened. If the acquisition announcement is the first time in a year or more that you're hearing from this company and they omit the sales price, you can bet this isn't the exit most parties wished for. Although by this stage the founder(s) is probably happy to find a buyer who will retain their team.
> you can bet this isn't the exit most parties wished for. Although by this stage the founder(s) is probably happy to find a buyer who will retain their team.
I've seen a startup that was bootstrapped 10 years ago but took on too much money and ended up getting acquired for "undisclosed sum" but at the same time everybody knew the investors were just recouping their money while founders got nothing (they had sold their equity for raising more money as their costs were way up but nobody was buying their product). Cue local news reporters don't know the nuances so they'll just announce "Startup X acquired by Y, wow!"
Founders place a lot of emphasis on getting "acquired" but there is roughly 95% chance of you selling at breakeven where the terms leave you with a year's worth of salary as a junior SWE
Get ready to see a lot more of these "acquired" news coming out in the near future. something around less than 1% chance of getting more money than you put in.
Startup has horrible odds especially if you are building a simple GPT wrappers
What’s interesting is how much it contrasts with TechCrunch’s story: ‘Most of Command AI’s 30-person, San Francisco-based team will be joining Amplitude. Command AI’s co-founder and CEO James Evans wouldn’t reveal the terms of the deal, but said candidly that an acquisition wasn’t something he’d been planning on. “Our growth was great and we had plenty of runway,” Evans told TechCrunch. “We weren’t out shopping ourselves or anything. But when Amplitude reached out a little while ago — this summer — we got really excited about the combination and became convinced that we could grow faster and reach more users together.”’
People want to save face. Some more than others. I also read the TC article and thought they were trying a bit too hard to make this seem like a good outcome.
Nothing against the founder. It's just how the game is played. And there's little to gain from deviating from the norms.
Edit: It benefits not just the founder’s ego but also the future career prospects of the employees. Big difference in your engineers being able to say “I worked at X all the way until they got acquired!!” and “I worked at X but the product was so unsuccessful we had to have a fire sale.”
That's too bad that the TC article read that way. They returned more money to investors than what was put in, which puts them in the top ~20% for acquisitions of this scale. The crazy part is even a lot of the 1B+ privates aren't able to do that (eg Lacework)
I both think this comment is spot on (acquisition theater / cope-core is very real) and what I said was true :)
Obviously, the better financial outcome is to grow huge independently and go public, etc, but there are a lot of good outcomes that are not that.
Congrats to both sides! As someone who used CommandBar (which became Command AI), Amplitude really leveled up their team. Not everything ends up being a standalone project, but that doesn't mean combining forces won't work better for everyone.
<3 thank you!
> First, some context for our customers: the Command AI product remains operational and will continue to be indefinitely. Over time, we will be migrating key infrastructure to Amplitude, so you may see some changes, but all of those will be communicated with plenty of lead time. There will be no disruption for your users; in fact, we think in the near term things will be getting better for them.
How long is indefinitely in this case?
The current plan is to port all existing functionality to Amplitude's platform as quickly as possible. We'll then migrate everyone over in a way that doesn't break existing functionality and continue running it indefinitely. We're working through the details now.
Cosign, Spenser and I are aligned on this :)
would be interested to know if the "AI" in this is anything further than an OpenAI wrapper and RAG
I share your skepticism of B2B companies making claims of being AI driven! Most stuff I see is a thin wrapper around an existing workflow where the AI isn't adding any meaningful functionality (also see: crypto).
We've been very deliberate about integrating AI functionality in a way that's additive: recommendations, proactive insights, and summarization are all areas that are a leap forward in the data space. What the CommandAI team has done is legit- it's their fastest growing functionality in terms of usage. We'll have more here soon.
Relevant TikTok: https://www.tiktok.com/t/ZTFHap9QW/
literally 90% of AI startups right now are some combination of the above and their "edge" is just a long system prompt that tells them to "be this niche and output response that mimics an expert from that niche"
This was never going to work out because OpenAI is literally watching everybody and how they are using it including prompts. AI wrapper startups serve these functions:
- wrappers prop up NVIDIA which are owned by the people giving VCs the money to invest in wrappers who are long Nvidia too.
- wrappers give OpenAI RSU holders a fuzzy warm feeling and they are able to see what the market is doing with their product so they can pull "Amazon Basics"
- IRS, attorneys, accountants, politicians love them all because they all get to squeeze milk from the fume
While the space is hot and most will fail, I disagree with the general negative sentiment. The same could be said for most/all startups. They all can be distilled into some simple implementation.
Exactly. "All SAAS for b2b is just an SQL wrapper". That's until they do something distinguishing, make implementation easier/faster/cheaper or come up with a new technology. Yes the playing field is level now, but what can they do in 1,3,10 years? How will new models play into this?
Way more than just a tarpit.
but SQL isn't a blackbox and is a declarative language with a strict syntax
Piggybacking on OpenAI or any GPT is not at all the same as SQL
> The same could be said for most/all startups. They all can be distilled into some simple implementation.
Hard disagree. There are lots of niches and businesses are complex. If everything was CRUD the people who are using no-code app builders would win against the ones who code, which hasn’t happened despite continuous attempts for 20-or-so years.
Now, I don’t know if GP is right, but assuming that it’s true (many prompt wrapping startups), then yes absolutely they are completely owned if they sit on top of an existing “platform” which can see everything they’re doing. That’s much worse even than selling IaaS on top of aws.
It was the same during the blockchain hype peak – you’d see lots of startups that forked some existing project and replaced the name of a token, and created a website to drive hype.
Not sure if you are trying to prove my point or not. Indeed businesses are complex. With every wave there are a large number of copycats and business with no moats. Many factors go into who win and who does not. Unlike blockchain and whatever you are trying to prove. There is already value being proven with the current wave in AI. Overvalued in the near term but undervalued long term.
Not sure anyone was trying to say no code apps would win.
We can already see that it’s possible to create comparable models in the LLM space. You could just as easily run your business off OpenAI models through azure. You have a hard sell trying to convince that azure is going to steal your data and roll a product of their own. Might as well tell us aws is stealing your web app.
> Not sure if you are trying to prove my point or not.
Yeah maybe we’re talking over each other. My point is that it all depends on what you build. A wrapper with an elaborate prompt does not too me sound like moat (I can be wrong). That’s where the bigger fish would not leave money on the table and eat them all.
That said, I suspect the company in question has much more moat than that. End user products make or break based on details in UX, even if they’re “doing the same thing” from 1000m away. And once the dust settles, the tech that’s integrated well into products win anyway, no matter the VC hype and valuations.
In terms of unit economics, I think if the price per token goes down (less than $0.00002/1k) some extremely niche companies can survive.
The main problem with those companies is that none of them will have any moat and those businesses aren't defensible.
I have a feeling people are overthinking the whole "we need to have a moat" and really the best moat you can have until you're a multi-million/billion dollar business is your craftsmanship (as silly as it sounds).
Good UI/UX is still the edge as technology becomes more of a commodity.
"Write an acquisition blog post that makes it look like we admire the company that bought us, and we're not in it for the money and that it was a hard choice."