Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Don't Talk to Corp Dev

paulgraham.com

Post reply on HN
Print view View original

131–140 of 209 posts

Re: Don't Talk to Corp Dev

#131

Post by mooreds »

cubano wrote: post #102
mark-r wrote: post #51

Earlier quoted context omitted.

Unfortunately it was long enough ago that I can't remember the exact speech, but the meaning was very clear at the time. And he never seemed to care much about the company or products, merely about the revenue it was going to add to their bottom line.

.. merely about the revenue it was going to add to their bottom line. In the business domain, is there really anything else to care about? If there is, I have yet to see it in my 25+ years in software development.

I think that 'good' businesses, or at least 'good' senior execs, care about more than the bottom line. Note that they still care about the bottom line because, hey, they have to make payroll.

But there are businesses out there that care about more than the bottom line.

'Good To Great' and 'Start With Why' are good books that document such businesses.

Re: Don't Talk to Corp Dev

#132

Post by LargeCompanies »

Love to tell my horror story re: my experience dealing with a Fortune 50 company. Under a NDA til May.

We are an east coast start-up and two months into creating our tech/product a large entity in the valley found out about us. This big name invited us out and talked about buying us. Well we have zero strong connections to such people like Paul Graham, but we did reach out to our network. They said, "I don't know if you should go or not, we've never had a billion dollar company like that make such an offer."

I wish I had found this post before wasting 4k on a trip and filing a provisional patent. We're a bootstrapped start-up.

Well when we flew out/got there to demo, this Goliath treated David like crap on a shoe. They invited us to demo, but when we went to demo at their offices in the valley they were blocking our tech from working(worked perfectly throughout every place we tested in the Valley including outside their building). Then they baited us with, "We'd like to work with you, please tell us how you achieved this technological feat." We took the bait and told them our trade secret. They soon left our meeting, then came back and promptly kicked us out! Right before leaving/being shown the door, one of these not so nice big wigs from X company said, "The race is on, better hurry!"

Ok, there was no guarantee of you buying us. We were cool with that. We weren't cool with being treated like crap on shoe and then stepped on and disrespected! It's hard to fathom that X company treats the little innovator guy as they did us.

Is this the normal?

Re: Don't Talk to Corp Dev

#133

Post by testrun »

djb_hackernews wrote: post #47
greggyb wrote: post #18

Earlier quoted context omitted.

Out of a link from the essay[0]: >Do not enter acquisition talks unless you are ready to sell your company. Negotiating an acquisition is the most distracting thing you can do in a startup: going through M&A is an order of magnitude more distracting than raising money. All of your ability to run the day-to-day operations of your company will grind to a halt. You should only enter an acquisition process if 1) you are…

Yes, easier said than done. Suppose I am a cofounder of WhatsApp. We just booked 10M[0] in revenue and are seeing a lot of success. I'm pretty proud of myself and see big things for WhatsApp. Though really, my ultimate goal is to compete with Elon Musk putting humans on Mars. I figure I need a few Billion to do that. But that's just a dream. Facebook "corp dev" comes knocking. I read the news and see they bought Inst…

I think you missed this part:

It's usually a mistake to talk to corp dev unless (a) you want to sell your company right now and (b) you're sufficiently likely to get an offer at an acceptable price. In practice that means startups should only talk to corp dev when they're either doing really well or really badly

Re: Don't Talk to Corp Dev

#134

Post by crdoconnor »

jtreminio wrote: post #86
leroy_masochist wrote: post #81

I used to be an investment banker and dealt with corp dev guys (gendered pronoun used intentionally and accurately) all the time. PG's article is spot-on. One additional thing to note is that the diligence process can be an intelligence-gathering bonanza for a larger acquiror. The information they glean can be either harmless to you (data points on employee shares/salaries allows them to build knowledge of early-stag…

> and a non-hire agreement that stops them from poaching your employees. Isn't that similar to what Google/Apple/etc were doing recently, and were rightfully lambasted for? My employer does not own me, they should have absolutely no say over what company can offer me a new position.

>Isn't that similar to what Google/Apple/etc were doing recently, and were rightfully lambasted for?

Two differences:

* It would be a one-sided no-poaching agreement (or it should be).

* An individual start-up does not have close to the same level of market power as a large corporation so the effects of no poaching agreements on the market as a whole would be minimized.

It isn't the same for the same reason why low cap startups with a lot of competition are immune from anti-trust violations no matter what their behavior.

Re: Don't Talk to Corp Dev

#135

Post by kika »

Happened to me. I didn't sell the company in the end (mtg meltdown, tech acquisition department got dismissed altogether, etc) and the company never recovered from me taking the "rest". Wasted 3 years of my life and $250K of angel money. Guilty as fuck.

Re: Don't Talk to Corp Dev

#136

Post by simonw »

lifeisstillgood wrote: post #83
emmett wrote: post #56

Earlier quoted context omitted.

This is completely, 100%, wrong about how YC thinks about things. If you've not advised a large number of fledgling startups, you wouldn't know, but really truly talking to corpdev is demoralizing and dangerous. If they really want you they'll reach out with an dollar figure (albiet probably a low one). If they haven't done that, they aren't serious. Don't waste your time. If actually you've raised from a VC, a small…

Can I just clarify, the selling of secondary stock and locking in a million, is that actually having cash in the founders personal bank account, or is that some cash on some future funding event? I seem to remember this as a discussion some years ago - where YC was set against the "keep them hungry" mentality. I am assuming it has not changed?

Founders who have a successful company but aren't personally well-off are much more likely to sell early rather than pushing on to create a super-valuable company.

Re: Don't Talk to Corp Dev

#138

Post by kika »

LargeCompanies wrote: post #132

Love to tell my horror story re: my experience dealing with a Fortune 50 company. Under a NDA til May. We are an east coast start-up and two months into creating our tech/product a large entity in the valley found out about us. This big name invited us out and talked about buying us. Well we have zero strong connections to such people like Paul Graham, but we did reach out to our network. They said, "I don't know if…

It was better for us, they didn't have engineers skilled enough to understand what we were saying and asked for a second meeting with their top notch tech people. But I've smelled something fishy and just forcefed them with top grade tech-looking bullshit under very heavy pressure. Top notch tech folks were confused, corp dev guys were pissed off, but they didn't have a nerve to ask "just repeat what did you say in the last meeting".

Then they've asked for the code and I gave them the code! We had brilliant C macro library for memory management, hash tables, list traversal, etc developed by my cofounder. Very nice piece of code, elegant, efficient and reliable. They've got all of it :-) When they came back confused I told them that I thought they want to check the clarity and quality of the code and this piece of code is quite representative. They had to specifically ask for the trade secret (and I would have refused) but again didn't have the nerve.

It was a big name in the industry, $5B yearly revenue back then.

Re: Don't Talk to Corp Dev

#139

Post by crdoconnor »

LargeCompanies wrote: post #132

Love to tell my horror story re: my experience dealing with a Fortune 50 company. Under a NDA til May. We are an east coast start-up and two months into creating our tech/product a large entity in the valley found out about us. This big name invited us out and talked about buying us. Well we have zero strong connections to such people like Paul Graham, but we did reach out to our network. They said, "I don't know if…

Please name and shame when the NDA expires.

Preferably with the name of the not so nice bigwig.

Re: Don't Talk to Corp Dev

#140

Post by crdoconnor »

cubano wrote: post #102
mark-r wrote: post #51

Earlier quoted context omitted.

Unfortunately it was long enough ago that I can't remember the exact speech, but the meaning was very clear at the time. And he never seemed to care much about the company or products, merely about the revenue it was going to add to their bottom line.

.. merely about the revenue it was going to add to their bottom line. In the business domain, is there really anything else to care about? If there is, I have yet to see it in my 25+ years in software development.

>In the business domain, is there really anything else to care about?

Unless you are a sociopath, the wellbeing of your employees and customers.

Post reply on HN