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I think this kind of thing is good for the industry. It may be a good way to avoid the innovator's dilemma. Big companies often can't take risks developing a n

I think this kind of thing is good for the industry. It may be a good way to avoid the innovator's dilemma. Big companies often can't take risks developing a new business or product line internally. These startups take on the risk, and get the reward if they succeed -- just like any other startups. The acquiring company gets to innovate without taking risk, which the board of directors might be leery of taking on. It's a win-win for everyone. More innovation happens than would have happened otherwise. Cisco and Adobe have been known for doing this. I'm not sure why anyone would object to this. Even if one wants the tech industry to be a perfect meritocracy, one must recognize that even in a meritocracy, people make use of personal connections to get ahead, because connections can be earned through merit. Not all connections are just accidents of birth or other circumstances. If someone gets a job at Google through merit, and succeeds through merit, it is entirely reasonable and just for Google to enter into a spin-in arrangement with him or her.

trhway 10y ago
>These startups take on the risk, and get the reward if they succeed i see a reward, yet i don't see a risk in such situation. >I'm not sure why anyone would object to this. may be because of such a tilted board? why for example some people object when somebody is cheating on an exam?
- twblalock 10y ago
  The risk is the risk of failure. They won't get spun back in if they fail. They will go out of business, like any other startup. I don't see how this is anything like cheating on an exam. The founders of spin-in startups are good at what they do -- if they weren't, they wouldn't get such an arrangement in the first place, and even if they did, they wouldn't be acquired if they failed. Meritocracy is not undermined when people with merit are identified and elevated -- in fact, that's the raison d'etre of meritocracy.
  - trhway 10y ago
    it would be in the black and white world. In the real world an additional easy financing and/or acquihire later makes a failure less so. again, you describe an ideal world where abuse of any situation by the meritocratic ideal people taking ideal decisions just don't happen, the world where conflict of interest policies, etc... just wouldn't be necessary. In that world i would wanted to live and would agree with you 110%.
    - twblalock 10y ago
      So what? Lots of startups that deserve to fail and don't have this kind of arrangement also manage to get more financing, or get acquired or acquihired. That kind of thing is not unique to spin-ins. I also never claimed the world was a perfect meritocracy. I was saying that if it was, this kind of thing would not undermine it. It seems that we agree on that point. I brought it up in anticipation of counter-arguments that spin-ins subvert meritocracy.

trhway 10y ago

>These startups take on the risk, and get the reward if they succeed i see a reward, yet i don't see a risk in such situation. >I'm not sure why anyone would object to this. may be because of such a tilted board? why for example some people object when somebody is cheating on an exam?

twblalock 10y ago
The risk is the risk of failure. They won't get spun back in if they fail. They will go out of business, like any other startup. I don't see how this is anything like cheating on an exam. The founders of spin-in startups are good at what they do -- if they weren't, they wouldn't get such an arrangement in the first place, and even if they did, they wouldn't be acquired if they failed. Meritocracy is not undermined when people with merit are identified and elevated -- in fact, that's the raison d'etre of meritocracy.
- trhway 10y ago
  it would be in the black and white world. In the real world an additional easy financing and/or acquihire later makes a failure less so. again, you describe an ideal world where abuse of any situation by the meritocratic ideal people taking ideal decisions just don't happen, the world where conflict of interest policies, etc... just wouldn't be necessary. In that world i would wanted to live and would agree with you 110%.
  - twblalock 10y ago
    So what? Lots of startups that deserve to fail and don't have this kind of arrangement also manage to get more financing, or get acquired or acquihired. That kind of thing is not unique to spin-ins. I also never claimed the world was a perfect meritocracy. I was saying that if it was, this kind of thing would not undermine it. It seems that we agree on that point. I brought it up in anticipation of counter-arguments that spin-ins subvert meritocracy.