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How to Sell Your Company to Bill Gates

October 7, 2021
Linzi Nield
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Over the course of his career as an artificial intelligence pioneer and founder, Sam Pasupalak experienced incredible highs and lows, culminating in the sale of his company, Maluuba, to Microsoft in 2017. From sleeping on a friend’s couch in Silicon Valley while he initially pitched his company to later traveling around the world looking for investments, Sam’s journey to acquisition was high-stakes and took a hustle mentality. 

To successfully run a startup, Sam said, “You have to be really passionate about the particular startup you’re working on.” His other tips: know your business model; don’t play a high-stakes poker game with your business; and don’t directly compete with the likes of Google or Amazon.

Sam’s vision for Maluuba was to solve Artificial General Intelligence by creating literate machines that can think, reason and communicate like humans. Today, Maluuba is now Microsoft Research Montreal, one of the world’s premier labs applying deep learning and reinforcement learning techniques to solve fundamental problems in natural language understanding.

In our most recent Tech Talk, Terminal Director of Talent Growth Nabil Fahel hosted a conversation with Sam. Below is a recap of their conversation, lightly edited and condensed for clarity. 

Be sure to watch the full recording to hear more about Sam’s story of how he sold his startup to Microsoft.

Terminal: What is it about the ecosystem in Canada that produces some of the deep thinkers in the AI space? 

Sam: Today, there are more centers of excellence in AI around the world, in Europe and the U.S. I was talking to Geoffrey Hinton and Yoshua Bengio five or six years ago. They were working on these problems and trying to come up with deep learning algorithms back in the 80s and 90s. They were kind of the outcasts, and no one cared about their research back in the day, they were telling me. No one cared until recently, the 2010s… That’s [due to] the tenacity that they had, the belief in the vision that they had. That contributed to the stream of PHDs they had under them, who later became professors. That’s why Canada is one of the centers of excellence.

Terminal: You were hiring people who were quite a bit older than you. How were you pitching the vision and recruiting before and after you got your investments?

Sam: If you think about our acquisition, we were primarily acquired for our talented team. It was very difficult because you know Google is offering, let’s say at least a few hundred thousand, and I’m offering them peanuts compared to Google, so you really have to sell them on the vision of what we can be in five or ten years from now. We did a good job at the time we sold, we at 20 PHDs or so, which is a pretty big deal because we were kind of hoarding the PHD talent in Canada back then. It was very difficult to convince them, but it’s about the vision. Either they believe in the vision, or they don’t. That’s why they came to join us.

Terminal: Can you talk about how you thought about talent and how you think about it today?

Sam: Right now, talent is more democratized. In 2015 or 2016, there were a few centers of excellence. We were in Waterloo, which is close to Toronto. The obvious move is to go to University of Toronto and where Geoffrey Hinton is from, but then all the students of Geoffrey are going to go to Google because Google… We struck a partnership with Mila, Yoshua Bengio’s lab in Montreal, and we were one of the first companies to go there. That’s why when Microsoft acquired us they did a strategic deal with us and with the University of Montreal, and with Yoshua Bengio, to make Montreal a center of excellence for AI. 

AI talent has become much more dispersed. With my next company, at least right now I’m thinking, I’ll be in Toronto because it has a lot of smart people. And it’s so difficult to hire in Silicon Valley, especially AI people. They’re very expensive, very much in demand and everyone wants them. I don’t want to compete with all the big companies, especially if I’m going to do a startup again.

Terminal: Joe Lonsdale, General Partner with 8VC, said recently that “remote offices aren’t an option for startups, they’re the only option” for some reasons you mentioned. 

Sam: Talent is, in my opinion as well, everywhere. Today, you can hire remotely. You can work with [teams] remotely. Technology like Zoom and other software has brought people together.

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