TakeLessons

Steven Cox

San Diego, California
Cofounder & CEO, TakeLessons (Acquired by Microsoft)

TakeLessons is a learning platform where instructors offer teaching services for sale and individuals receive lessons for languages, tutoring, music, and more, either online or in-person.

I founded TakeLessons in 2006 after noticing a disconnect between people looking to learn and those who could actually teach them. What we recognize today as ecommerce platforms or marketplaces were around— eBay, for example—but connecting buyers and sellers of services was still novel. I started the company out of a spare-bedroom, self-funded, and worked at night with teams in India to build the first version of a product, initially focused around music lessons. We bootstrapped the business for a few years before friends and family funding, and eventually institutional venture capital.

Before being acquired by Microsoft in 2021, we made two acquisitions ourselves to advance the business. One helped us to expand into a new offering—building out our network of instructors at a discount—while the other acquisition added a social aspect to our core offerings around music.

The decision to be acquired was a strategic one, reflective of our understanding of the cycles startups go through. Early on in 2012, business was going well and we started receiving offers from would-be acquirers. While we explored them, we ultimately decided not to pull the trigger—we were just getting started and had a lot of opportunity ahead of us. At various points over the next several years there were times where we would have been open for an acquisition, but there weren’t any buyers. So when we experienced the boom in online learning during COVID, we tested the waters and received interest from both strategic buyers and private equity firms, confirming it was a good time to potentially join forces with a strategic buyer.

We were courted by multiple parties, and we were thrilled to be acquired by Microsoft—the second largest company in America. Obviously, key considerations like pricing, terms, and probability of closing were important, but for us, Microsoft’s strengths paired well and they had the resources to grow TakeLessons and a shared interest in empowering providers to make a better living doing what they love. Equally important—and I hope this is a priority for every founder—the day after we were acquired, all of our employees had jobs at Microsoft.

The company is in great hands. This has allowed me to step back to a consulting role after spending the several months following the acquisition helping with the transition. I am now taking a breather a bit and thinking deeply about what I want to do next. I’ve joined the Board of Directors/Advisors for a couple marketplaces and/ or ed tech companies, and I’ve started looking at government policy, social impact, and food tech space. I will certainly remain in the startup ecosystem.

Finally, I’ve been asked recently about big tech acquisitions that are made just to kill off new technologies. Personally, I haven’t seen these “killer acquisitions” where a large company tries to stamp out a small one. It’s possible, I suppose, but I find that larger companies are more interested in playing offense than defense.

Regarding policy, policymakers should be thoughtful about limiting mergers and acquisitions by big tech as a way of reigning in the major players. Being acquired is a desirable startup exit path, and restricting it will lead to less capital and less startup competition. Policymakers should also realize that immigration is an important key to startup talent. To compete in a global economy, startups need to hire the best and brightest employees from around the world. The employee-sponsored visa program remains broken, and Congress needs to make it easier for startups and other small businesses to navigate the immigration system. Finally, the protection of the Qualified Small Business Stock (QSBS) incentive is a key driver to allowing entrepreneurs and early employees to be rewarded for taking the risks to start and grow a new business. Without a doubt, the QSBS tax treatment helps the startup ecosystem as an economic engine.