21–30 of 57 posts
If we had only so many users or we couldn't find a way to reasonably monetize our product, I'd completely feel comfortable leaving Page and Brin holding the bag.
Ever hear a movie described as "the kind of movie you get to make after winning an Oscar"?[1]
There are some movies - special movies - that are the kind of movies directors get to make only after they've made a successful movie.
Start-ups seem a lot like that.
[1] That was Todd McCarthy, writing for Variety, about the Coen brothers's movie A Serious Man.
"Alright, 'BUY HIM OUT' boys!". A minute later only debris remains...
Keep in mind, if you can do your startup as OSS, it changes the game. For example, look at Monty and MySQL. He sold to Sun, he didn't like the direction they (now Oracle) took it, so he forked his original codebase, and kept developing it in a new company. There may be contractual reasons why this is difficult, but there are huge advantages to releasing your code if you can.
* Part of how the original Mysql made money was by saying "ah, this is GPL'ed code, but if you'd like to include it in a proprietary work, we can sell you a license for that, since we own the copyright to the whole thing". He can't do that again.
* I'm not sure how often you can burn your bridges like that and have people happy about it.
5x valuation? Whose valuation? Obviously it is not 5x the valuation from Google who is going to kill it? Assuming 5x valuation is 5x what I think it is worth: of course I would sell (I like to think of myself as rational).
Doesn't matter what the financial situation is. Are they acquiring you because your product stinks but you and your team is awesome? Then what are they paying money for? Why would anyone pay 5x to shut it down?
Whether you kill the new product after acquisition or integrate it or keep working on it in house is just another business decision. If the old model is much more profitable per user than the new then it may make good sense to buy and shut down a few upstarts just to extend the lifetime of your highly profitable existing business.
I don't know anyone who considers this kind of thing as their primary exit strategy but in my experience it's common for founders to consider that "threaten a big corps market enough that they acquire you to shut it down" is at least a possibility.
I think it's fairly obvious that a lot of what get presented as an "acqui-hire" is actually mostly based on this evaluation of the market. But it's bad PR to admit you are attempting to create/protect a "monopoly".
It's other people's startups I would not sell off. Facebook bought Beluga and we haven't had any good group messaging since they killed it. GroupMe, Facebook Messenger, all suck. Google Hangout is good, but doesn't quite do the same thing.
5x valuation? Whose valuation? Obviously it is not 5x the valuation from Google who is going to kill it? Assuming 5x valuation is 5x what I think it is worth: of course I would sell (I like to think of myself as rational).
That's how I interpreted the question (which basically makes it a no-brainer).