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Watching an acquirer ruin your company

startupwin.kelsus.com

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Re: Watching an acquirer ruin your company

#21

Post by csours »

doctor_eval wrote: post #2

> Make sure you’re convinced that they understand the level of investment needed from them post-acquisition. It’s way more than this. The acquirer also has to share your vision, be willing to let you execute on it without interference, be willing to commit funding for sufficient time for it to grow legs, have deep enough pockets to sustain the investment, and be honest about all of the above. Quite often the acquirer…

> have deep enough pockets to sustain the investment

Exactly! I recently saw someone blame Nissan's failure on how Renault ran the company into the ground. Only problem is that Nissan was on their way to bankruptcy when they were acquired. "Beggars can't be choosers". To be fair, Renault has done Nissan dirty, taking out money instead of re-investing

Re: Watching an acquirer ruin your company

#22

Post by csours »

lukemercado wrote: post #4
Kaibeezy wrote: post #3

FFS, if it’s a good idea do it again. I built a satisfying career on a couple of those. Good ideas are for squishing obsessively into the fuzzy pumper until you get an iteration worth sticking in the oven.

I'm sorry, I can't resist. What is a "fuzzy pumper" in this context?

I think they mean their brain.

Re: Watching an acquirer ruin your company

#23

Post by kurthr »

jmyeet wrote: post #13

As soon as someone hands you the check it's no longer "your" company and you should stop thinking of it as such. Only misery lies on that path. I see this on a smaller scale where ICs leave a company and take a copy of "their" code (ask Sergey Aleynikov [1] if that's a good idea). It's not yours. If you ever use it you could face legal consequences. And there's no code I've ever written that I wasn't convinced I coul…

Often acquisitions are set up with "earn-outs" so that only with the success of the project do you get the full amount of the buy. Even when that's not the case your reputation may well be tarnished by any failure (whether technical or managerial) of the product.

I agree with your point though, which is to just walk away with the check unless you're willing to take a significant risks with either of those two other outcomes.

Re: Watching an acquirer ruin your company

#24

Post by BMc2020 »

le-mark wrote: post #10

I’ve seen this twice. First time the PE firm installed their CEO who came in and immediately started talking about cleaning house. A bunch of developers left fearing a layoff. That was bad enough, but what he really meant was sales. He gutted the sales team and brought in his guys. Sales tanked, company growth stopped, hard. Features dwindled and bugs grew. This clown and his cronies were gone after two years and the…

Reminds me a a company I worked at, I can't say it's name, let's just say it rhymes with Dewlett Dackard.

1) Start with a $55 billion dollar company... 2) Hire a new CEO and cronies that are going to make miracles happen with with a very expensive acquisition of another company. 3) 18 months later the miracles have not happened. CEO and cronies are invited to leave with very generous golden parachutes. 4) Start with a $50 billion dollar company...

Re: Watching an acquirer ruin your company

#25

Post by joshu »

yeah, been there.

if they aren’t making the leader of the acquired company into VP or higher, it is unlikely that the product will succeed.

before acquisition you are an important innovator that has much to teach. after acquisition you are a crazy person who only wants to spend money.

Re: Watching an acquirer ruin your company

#26

Post by hinkley »

PragmaticPulp wrote: post #18

> As soon as Sphero completed the acquisition, bringing Kelsus in as an app developer, two things happened: 1) Sphero told us they needed fully revamped iOS and Android apps six months later with no schedule wiggle room. 2) Sphero spent the first two of those six months organizing a team on their side and hashing out requirements for the new apps. This exact pattern has preceded every mismanagement disaster I've ever…

> and the death spiral begins.

The death spiral becomes visible, really. The gun had already been fired, the body just hadn’t hit the ground yet.

I must say these failure modes are much worse than the ones I’ve experienced, which maybe I should be grateful for, I’d have to think about this. Generally I’ve seen a slower burn, where the remaining fiscal year plays out with soothing tones and promises of not changing things, and if money doesn’t magically appear in their accounts, which why would it? Then they don’t give you money for some of the things you usually do and while they technically didn’t tell you not to do them, if there’s no money you don’t get to do them.

I don’t know which business school teaches people to say “ah can you smell that fresh mountain air” while they have their hands wrapped tightly around your neck but that’s some gaslighting BS that I hope nobody experiences, but I know people have. Best I can do is tell them to watch out for it. Some places you’re safe until FY+1, and things don’t go fully absurd until FY+2.

Re: Watching an acquirer ruin your company

#27

Post by kwatsonafter »

PragmaticPulp wrote: post #18

> As soon as Sphero completed the acquisition, bringing Kelsus in as an app developer, two things happened: 1) Sphero told us they needed fully revamped iOS and Android apps six months later with no schedule wiggle room. 2) Sphero spent the first two of those six months organizing a team on their side and hashing out requirements for the new apps. This exact pattern has preceded every mismanagement disaster I've ever…

Is this the, "rolling robot turtle" Sphero?

Re: Watching an acquirer ruin your company

#28

Post by gedy »

PragmaticPulp wrote: post #18

> As soon as Sphero completed the acquisition, bringing Kelsus in as an app developer, two things happened: 1) Sphero told us they needed fully revamped iOS and Android apps six months later with no schedule wiggle room. 2) Sphero spent the first two of those six months organizing a team on their side and hashing out requirements for the new apps. This exact pattern has preceded every mismanagement disaster I've ever…

Agreed, and while it's become fashionable to trash on "agile", this sort of thing is why I still prefer it to alternatives. Basically "what do you want next?".

Re: Watching an acquirer ruin your company

#30

Post by hinkley »

BMc2020 wrote: post #24
le-mark wrote: post #10

I’ve seen this twice. First time the PE firm installed their CEO who came in and immediately started talking about cleaning house. A bunch of developers left fearing a layoff. That was bad enough, but what he really meant was sales. He gutted the sales team and brought in his guys. Sales tanked, company growth stopped, hard. Features dwindled and bugs grew. This clown and his cronies were gone after two years and the…

Reminds me a a company I worked at, I can't say it's name, let's just say it rhymes with Dewlett Dackard. 1) Start with a $55 billion dollar company... 2) Hire a new CEO and cronies that are going to make miracles happen with with a very expensive acquisition of another company. 3) 18 months later the miracles have not happened. CEO and cronies are invited to leave with very generous golden parachutes. 4) Start with…

“The best way to create a small fortune in X is to start off with a large fortune.”
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