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Google's strategy: Acquire pre-revenue for low valuations so that they can make money down the road with the startups most valuable resource, the founding team.
by loganfrederick 17y ago
Google's strategy: Acquire pre-revenue for low valuations so that they can make money down the road with the startups most valuable resource, the founding team.
Google's strategy works because they don't often acquire the startups for the startup's business. They acquire businesses for the people working on them.
Acquiring talent, as opposed to businesses, is cheaper and provides a ton of value and wealth creation for the company down the road.
- shpxnvz 17y agoIf so, it sounds like they are basically just hiring with a larger-than-typical signing bonus. I wonder if the teams being acquired in that fashion view it that way?
- ephermata 17y agoDodgeball is one example where the team did not view it that way. The founders were excited at the time of acquisition with the directions they thought they could go with Google. After the acquisition, they found it difficult to get resources or traction within Google to improve Dodgeball. This led to them leaving. Maybe today's teams coming in feel differently, since the Dodgeball story seems to be well known. Plus articles like this one. That being said, there are plenty of examples where an acquisition by Google did take off. Android is the most high profile right now.
- loganfrederick 17y agoI'd almost think of it more like buying an employee from another company out of his/her contract. In this case the contract would be the founder's obligation to his/her company.
- wallflower 17y agoDodgeball is a famous Google acquisition because it got purchased and died. However, it's founder started foursquare post-Google.