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The real reason we’re upset about Sparrow’s acquisition

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Re: The real reason we’re upset about Sparrow’s acquisition

#51

Post by jiggy2011 »

nirvana wrote: post #35
hboon wrote: post #24

Earlier quoted context omitted.

Have you stopped using GitHub, if you were a user?

I think github would be the exception that proves the rule, because the github investment isn't a typical "Venture" investment- it was much closer to a late stage hedge, or hedge fund investment. This was a company that was profitably growing like crazy and thus could effectively dictate terms. Whatever A16H's exit expectations are here, I'm pretty sure they are rather long term, and on the order of "github goes publ…

Not to mention that github's foundation is git which is very much open source so your repos are moveable.

Re: The real reason we’re upset about Sparrow’s acquisition

#52

Post by minikites »

rogerchucker wrote: post #41
officemonkey wrote: post #3

Also, frankly, I think people chose Sparrow because they weren't happy with the big boy's applications (Apple's Mail.app on Mac OS X, Apple and Gmail's apps on iOS). It's a case of "We don't like Google or Apple's apps, so we're going to _pay extra money_ to get something we like." So when the Sparrow team gets picked up by Google _and_ we hear that Sparrow.app is becoming abandonware, many people think "the bad guys…

If the Gmail app becomes good enough thanks to the Sparrow team, then I don't see any loss for the user.

What if it doesn't?

Re: The real reason we’re upset about Sparrow’s acquisition

#53

Post by jiggy2011 »

franzus wrote: post #34
zhoutong wrote: post #22

It's all about value creation. Assuming every party here is rational: Google decides to pay for the Sparrow team only because the potential value of these developers is much higher than the price they pay. And Sparrow team accepted the offer only because the big pay check exceeds the value all their own customers combined. If we hate this, we can either make such talent acquisitions less attractive, or increase the v…

> independent software developers tend to be less entrepreneurial than startup founders Why is that? Because they have a working monetization model when they launch?

In some sense they are less "ambitious" I guess.

Risk/Reward scale:

Selling your labour -> Selling your skills -> Selling your product -> Selling your vision

Re: The real reason we’re upset about Sparrow’s acquisition

#54

Post by keithpeter »

rogerchucker wrote: post #42
carsongross wrote: post #40

The reason sparrow had to sell is because they didn't have a recurring revenue model. This is what limits all "pay once" desktop (and mobile) software: either they have to charge prohibitively high amounts or they have to get you to upgrade frequently. The former limits adoption and the latter is tricky and encourages feature bloat. I now want to pay for the desktop software I like as a subscription: it keeps the dev…

Nobody outside the developer community will ever pay for any software on a recurring basis, especially if free alternatives are available.

Eastgate systems publish Storyspace and Tinderbox. Tinderbox is sold with 'a year of free upgrades', and after that there is an upgrade fee. Sort of subscription based.

Re: The real reason we’re upset about Sparrow’s acquisition

#55

Post by pavel_lishin »

nirvana wrote: post #38
antr wrote: post #14

In 1998 we wouldn't of complained - at least me. It is 2012, and when I purchase software, I don't buy into the premise that this software is going to be static for perpetuity, and this is because of the fast-paced nature of OS, platform and web evolution. I "marry" the software I love, and I am very happy to pay for upgrades. I upgrade my Mac the day after a new OS X version is released, not only that, but I use non…

FWIW, I was an early employee at a startup that was acquired around 1998 for around this amount of money. In those days this wasn't considered an "acquihire" but a "successful exit" or a "base hit". (e.g.: not a failure but not the success that pays for all the other companies in the VC firms cohort that year.) The VCs got about 5X on their money and because of liquidation preferences and other shenanigans, I, and th…

What about the users of your software?

Re: The real reason we’re upset about Sparrow’s acquisition

#56

Post by gwillen »

rogerchucker wrote: post #42
carsongross wrote: post #40

The reason sparrow had to sell is because they didn't have a recurring revenue model. This is what limits all "pay once" desktop (and mobile) software: either they have to charge prohibitively high amounts or they have to get you to upgrade frequently. The former limits adoption and the latter is tricky and encourages feature bloat. I now want to pay for the desktop software I like as a subscription: it keeps the dev…

Nobody outside the developer community will ever pay for any software on a recurring basis, especially if free alternatives are available.

http://www.adobe.com/products/photoshop/buying-guide-subscri...

Re: The real reason we’re upset about Sparrow’s acquisition

#57

Post by netcan »

Obviously, those arguments are somewhat metaphorical. Paying $2.99 (or even $2,999) for software doesn't guarantee its sustainability. It doesn't move the needle. It's more like voting where your individual vote doesn't count but you still feel that its important to vote. Especially if you voice an opinion and try to convince others (something that probably has more effect than voting).

I think we are talking about more abstract things. We want this software to exist. We want these business models (small, profitable development companies) to exist. It's not just "I want to use this software."

I think a reason for these kind of reactions to acquisitions is that we feel or suspect that they are destroying rather than creating value. But, it's kind of hard to tell so we don't usually make that claim. For small companies, we know what they make and how many people use it so its easy to get a feel for the value they create. When Google acquires a great team, its hard to know what, if any value they create. Google obviously create enormous amounts of value but its hard to tell what a new team ads or subtracts from that. Much more nebulous are the effects that the existence of such acquisitions have on founder and investor motivation to start and fund these companies in the first place.

I think thats it at the core. A suspicion that such acquisitions are value destroying activities resulting in less/worse software being available to the world.

Re: The real reason we’re upset about Sparrow’s acquisition

#58

Post by superuser2 »

betterth wrote: post #45
rogerchucker wrote: post #41

Earlier quoted context omitted.

If the Gmail app becomes good enough thanks to the Sparrow team, then I don't see any loss for the user.

How about any user not using Google email?

It's my impression that Sparrow is intended primarily as a GMail client. I don't have data, but I'd be surprised if a significant portion of its users didn't have GMail.

Re: The real reason we’re upset about Sparrow’s acquisition

#59

Post by reddit_clone »

keithpeter wrote: post #25
officemonkey wrote: post #3

Also, frankly, I think people chose Sparrow because they weren't happy with the big boy's applications (Apple's Mail.app on Mac OS X, Apple and Gmail's apps on iOS). It's a case of "We don't like Google or Apple's apps, so we're going to _pay extra money_ to get something we like." So when the Sparrow team gets picked up by Google _and_ we hear that Sparrow.app is becoming abandonware, many people think "the bad guys…

"Of course, I hope the hue and cry about this will suggest to google that Sparrow might be worth maintaining after all." Or open source the app code? c.f Intellicad when Microsoft bought Visio

Exactly what I thought. If they are interested only in the talent, why not give the code to the community?

The publicity and goodwill alone should be worth it!

Re: The real reason we’re upset about Sparrow’s acquisition

#60

Post by steve8918 »

Unfortunately, this is what you get when you pay $10 for an app.

There is a huge disparity when it comes to the cost of apps these days vs the salaries required to sustain the engineers who make those apps. Even at $10/pop, you need to sell a lot of apps just to sustain the salaries of very good engineers, and THIS is what makes great products vulnerable to acqui-hires.

The problem is that the $0.99 model of the App Store makes a $10 app look ridiculously expensive, especially when there are free alternatives out there, even though it's only 2 Starbucks coffees. And even though $10 is worth it.

It's the price of the apps that have drastically lowered the expectations of what people need to pay for software, and this goes in direct conflict to the rising costs of great engineers' salaries.

I'm not sure what the exact price point is, but my guess is that people need to start getting used to the idea of spending $30-50 PER YEAR in a subscription model for a great app in order to create enough monetary incentive for the developers to keep their products alive. Otherwise Google and Facebook will continue to drop the bills and pick off the best teams who eventually get tired of the smaller comparative payoffs that these apps bring in.

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