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The 'Startup Boom' is a disguised jobs fair for big corporations

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Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#71

Post by pron »

pg wrote: post #67
pron wrote: post #64

Earlier quoted context omitted.

The author may very well be wrong about the investors' perspective and the talent-hunt motivation, but he's probably right about who's running the show, and the answer is, invariably, the big companies. Why? Because there just aren't enough successful startup IPOs to keep the entrepreneurs trying. Founders may like risks, but they're not suicidal. The only reason this show is running is that there are plenty of acqui…

At a certain point, big companies don't have any choice about whether they do acquisitions. If they want to be in a certain business and some startup already has an unbeatable lead, they have to buy it.

Maybe, but that startup exists in the first place only because the big companies willed it. How did that startup come to be? It got some investment money. And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low. The only reason that startup came to be is because the investors liked the odds of that startup being acquired. Like I said, if tomorrow morning Google, Apple, IBM, Facebook etc. decide they're not buying startups anymore but employing all developers directly and doing their own risky development, the startup scene will vanish in an instant. So the author is right in that the startups exist to serve the big companies. The reason the big companies don't do that is that they know that true innovation flourishes under perceived freedom. So we all win, but big-tech still wins the most.

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#72

Post by jessicarichman »

Perhaps this should be viewed as a good development rather than as a problem. Talent acquisitions may be a much easier way of rewarding entrepreneurial spirit and innovation than traditional recruiting mechanisms. There is a continuum between recruiting and acquisition that has previously been seen as a binary. Why not fill in this continuum with new ways of hiring that reward creating new ventures instead of filling out job applications and sending resumes?

This is not a bug. It's a feature.

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#73

Post by rdl »

pron wrote: post #71
pg wrote: post #67

Earlier quoted context omitted.

At a certain point, big companies don't have any choice about whether they do acquisitions. If they want to be in a certain business and some startup already has an unbeatable lead, they have to buy it.

Maybe, but that startup exists in the first place only because the big companies willed it. How did that startup come to be? It got some investment money. And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low. The only reason that startup came to be is because the investors liked the odds of that startup being acquired. Like I said, if tomorrow morning Google, Apple, IBM,…

No, the only reason the startup exists is because the founders started it.

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#74

Post by rdl »

lrobb wrote: post #25
drblast wrote: post #18

I fail to see the problem with this. Why is it bad to work for a large company? Do you know how ridiculously difficult it is to prove to an established business that "no, I don't have the specific experience you are looking for, but I can learn it in short order and I'll be one of your best employees," and then stand out from the 100 people behind you who say the exact same thing? It's also ridiculously difficult for…

Selling a business for a payout is one thing... Starting a business just to get a job is kinda nuts. You say "lose nothing", but there's always a tradeoff..

Actually, it makes sense (especially if it is "start a business as a bootstrapped thing").

You get a nice cash bonus (even if you only net $50k, it's nice), AND you come in higher in position than a random hire, and you have a shot at a better company than you might otherwise.

It would be crazy to try to raise VC to start a business to get a job somewhere as an acquihire, but bootstrapped is entirely different.

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#75

Post by rdl »

ericd wrote: post #6
ookblah wrote: post #5

Earlier quoted context omitted.

But I feel like it isn't 1/500. Maybe on the order of like 1/5000... Think about how many companies apply to just one program like YC at any given SEASON. And this is just one program. When you factor in the other ones like TS, AP, 500 Startups how many years did it take for the first Heroku to come out. And then these guys are considered the "best" at picking and cultivating startups. Think about all the crap other…

Sure, for angels who aren't very prolific, it's a lot more variable. I should have mentioned that I was thinking about it from an incubator's perspective. Normal angels aren't investing in a uniform random manner, though, and I have to assume that that helps their odds. Lending their money and their name to the company can help the odds as well. Heroku was founded in 2008, years before 500 Startups and many of the ot…

The bigger issue is access to dealflow -- if you're a no-name angel, with no particular accomplishments, connections, etc. you're not even going to get entrepreneurs to talk to you. Even if you mail a top company a $50k check and investment offering, it will probably get rejected.

If I had $1mm to invest and got to put it into exactly the companies I wanted every year, I could probably get great returns, but for a random dentist from Oklahoma, he'd be better off just buying AAPL stock.

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#76

Post by pg »

pron wrote: post #71
pg wrote: post #67

Earlier quoted context omitted.

At a certain point, big companies don't have any choice about whether they do acquisitions. If they want to be in a certain business and some startup already has an unbeatable lead, they have to buy it.

Maybe, but that startup exists in the first place only because the big companies willed it. How did that startup come to be? It got some investment money. And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low. The only reason that startup came to be is because the investors liked the odds of that startup being acquired. Like I said, if tomorrow morning Google, Apple, IBM,…

And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low.

That's not true. VCs will only invest in a startup if they think it has a chance of an IPO. Angels prefer that sort of startup too, though they are not as rigid about it as VCs.

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#77

Post by pron »

pg wrote: post #76
pron wrote: post #71

Earlier quoted context omitted.

Maybe, but that startup exists in the first place only because the big companies willed it. How did that startup come to be? It got some investment money. And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low. The only reason that startup came to be is because the investors liked the odds of that startup being acquired. Like I said, if tomorrow morning Google, Apple, IBM,…

And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low. That's not true. VCs will only invest in a startup if they think it has a chance of an IPO. Angels prefer that sort of startup too, though they are not as rigid about it as VCs.

OK, so the possibility of an IPO is a necessary condition for investment, but is it sufficient? Would any kind of investor put money in if they think there is a chance of an IPO (with the odds being what they are now) but zero chance for an acquisition? Isn't acquisition the attractive fallback that tilts the odds more favorably? Wouldn't a scenario of no acquisitions stack the odds against the startup so high as to preclude investment? That is the big question. Aren't acquisitions the motor behind the startup system? Aren't they its bread and butter?

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#78

Post by pg »

pron wrote: post #77
pg wrote: post #76

Earlier quoted context omitted.

And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low. That's not true. VCs will only invest in a startup if they think it has a chance of an IPO. Angels prefer that sort of startup too, though they are not as rigid about it as VCs.

OK, so the possibility of an IPO is a necessary condition for investment, but is it sufficient? Would any kind of investor put money in if they think there is a chance of an IPO (with the odds being what they are now) but zero chance for an acquisition? Isn't acquisition the attractive fallback that tilts the odds more favorably? Wouldn't a scenario of no acquisitions stack the odds against the startup so high as to…

A VC would have no problem investing in a company with no chance of being acquired, if it had IPO potential. Airbnb is an example.

IPOs are unquestionably the "motor" of the VC business. That's what drives all their thinking.

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#79

Post by pron »

pg wrote: post #78
pron wrote: post #77

Earlier quoted context omitted.

OK, so the possibility of an IPO is a necessary condition for investment, but is it sufficient? Would any kind of investor put money in if they think there is a chance of an IPO (with the odds being what they are now) but zero chance for an acquisition? Isn't acquisition the attractive fallback that tilts the odds more favorably? Wouldn't a scenario of no acquisitions stack the odds against the startup so high as to…

A VC would have no problem investing in a company with no chance of being acquired, if it had IPO potential. Airbnb is an example. IPOs are unquestionably the "motor" of the VC business. That's what drives all their thinking.

Then I stand corrected. :)

Re: The 'Startup Boom' is a disguised jobs fair for big corporations

#80

Post by corford »

rdl wrote: post #73
pron wrote: post #71

Earlier quoted context omitted.

Maybe, but that startup exists in the first place only because the big companies willed it. How did that startup come to be? It got some investment money. And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low. The only reason that startup came to be is because the investors liked the odds of that startup being acquired. Like I said, if tomorrow morning Google, Apple, IBM,…

No, the only reason the startup exists is because the founders started it.

That's a a fairly redundant statement if you don't explore the reasons behind why they decided to start it.
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