Six Ways to Integrate Startups Without Crushing Their Spirits

By Scott Kirsner |  February 19, 2020

Raphael Guillet, Disruption Technologist at Accor, and Chief Revenue Officer at Onefinestay, a startup acquired by Accor.

Raphael Guillet has seen startup acquisitions go wrong. Cultures clash, key employees walk out the door, and synergies prove elusive. “There are not a lot of success stories,” he says.

Guillet was a co-founder of the first startup that the $4 billion hospitality company Accor acquired, in 2014. Accor, headquartered in the suburbs of Paris, operates about 4,800 properties under brands like Swissôtel, Sofitel, and Fairmont. Guillett’s startup, Wipolo, had built an online service for organizing travel itineraries.

Six years later, Guillet and his two co-founders are still working for Accor. In that span of time, Accor has purchased about a dozen other startups, with 1,800 people joining the company as a result of those deals.

“There are a lot of challenges in making this go right, and we experienced a lot of them,” Guillet says. One example: “The first day we came into the office after the acquisition, we didn’t have a desk. Someone told us, ‘Come back in three weeks, and we’ll have a desk ready for you.'”

Guillet says there are six things to think about if your organization wants to acquire startups without crushing their spirits.

Make cultural fit part of the due diligence process. Assessing culture fit — an important component of ensuring that a startup can create value after an acquisition — should happen during the due diligence period, Guillet says. “We don’t expect them to have the exact same culture as Accor, but it needs to be compatible, unless you’re really just buying the assets. If you feel like the culture is not right, [the acquisition is] not going to work.”

What’s an example of a cultural mismatch? A startup team that “has a killer mentality, where they need to crush everything in their path,” Guillet says. That may work well when they are a standalone venture taking on the world — but it can be a sign that they may not respect the people they need to work with once acquired, and may not be flexible enough to collaborate and make changes after the deal is done.

Form a team to take responsibility for integration. “One of the key things we did early on was creating a team within Accor to help with the onboarding and the governance of these new business entities,” Guillet says. “This team was acting a lot like a buffer between the [core business] and the startup,” so that startups didn’t get inundated with requests to be part of meetings, or to get involved in too many different projects. The team was made up of people who had an entrepreneurial background, as well as some long-time Accor veterans with deep relationships up and down the org chart. The team “was really key in making sure that the companies we acquired felt welcome, and not too lost within Accor. They had somebody that they could talk to when they needed something.”

Accor’s headquarters building in Issy-les-Moulineaux, France, just outside Paris.

Consider creating a separate space. Accor considered whether startups should be asked to relocate to the company’s headquarters on the outskirts of Paris. But ultimately, Guillet says, the decision was made to create a place for the New Business Initiatives team in the Marais district, closer to the center of the city. The Marais is “much more of a place that you’d find startups,” he says. The New Business Initiatives office has coworking and meeting space that is open to any Accor employees who want to use it. And it also hosts regular startup meetups that attract Parisian entrepreneurs and techies after working hours. (Just as in the US, pizza and beer are de rigueur.)

“We acknowledge that the startup has its own culture, and New Business Initiatives has its culture, and there is the Accor culture,” Guillet says. “They all need to be compatible with one another.” Having a space where all of the acquired startups work alongside each other creates “a feeling of cohesiveness and belonging.” There are lots of informal lunches and dinners that enable teams to share advice with one another.

“For some of these companies, relating to Accor can be challenging at first,” Guillet says. “So having other players nearby who are much more similar to them really helps. They feel like they belong to a group that belongs to the big group.”

Tread carefully when it comes to taking away tools. While the entirety of Accor’s organization uses Microsoft tools, the startups that Accor acquired largely rely on Google apps and Slack to get their work done. Rather than forcing everyone in New Business Initiatives to shift to Microsoft, Guillet says, “We limited changes to tools where there were security or compliance issues. We’d say, ‘Sorry, we can’t allow that.'” Google and Slack have endured, he says.

Tweak the approach to hiring. The standard HR process for hiring employees may not attract the kinds of employees that “former startups” need once they’re part of a large company. “Accor had a platform to put the job offers online,” Guillet says. But hiring often dragged on; Guillet emphasized that “if we don’t give [a candidate] an offer by the end of the week, he’ll have three other offers on the table.” The company’s HR “wasn’t used to being in that position, of having to convince someone to come work for you, because in France, everyone knows Accor in hospitality, and they were used to having everyone coming to them.”

And the company’s hiring pitch needed some fine-tuning for younger software developers, Guillet says. “Telling someone, ‘You’ll still be at the company in ten years’ is not necessarily what a developer just out of school wants to hear.” Instead, they want to hear about the types of projects they’ll get to work on, and the tech stack that the company uses.

Expect change, and create permeability. Not every manager at a startup is going to be the right person to continue managing the business post-acquisition, Guillet says. Changes often need to happen, but they need to be handled delicately. Identifying the key people in a startup, and beginning to sketch out succession plans for founders who may want to move on is something that should happen as part of the due diligence phase, he says. “A lot of founders are really excited at the prospects of having this huge playground, and all these assets that Accor has. But for others, it was the end of the story.”

Guillet says that employees from the core business have moved to take roles with New Business Initiatives, and vice versa. People have also moved from one former startup to another. “If talent is going to leave your startup, when you have 10 other startups around in the same office, you just want him or her to go to a different entity, or find new projects and new challenges within Accor’s [core business],” Guillet says.

That, he adds, “has helped to cross-fertilize the cultures.”

And over time, Guillet says, the role of that “buffer” team has evolved as the New Business Initiatives approach and culture has become more sophisticated. “We have much fewer resources dedicated to buffering than we did a few years ago,” he says. Integrating a startup now “is much more seamless than it was — which we see as a sign of success.”

Guillet believes that Accor’s approach to acquisitions has helped the company get a head start in fast-growing markets, accelerating its digital and cultural transformation and making it much more attractive to key partners and top talent.