4 ms·

Good point. I've only spent a limited amount of time in startup space but it seems this intention is usually considered more as a possible path rather than an i

by gt_ 9y ago

Good point. I've only spent a limited amount of time in startup space but it seems this intention is usually considered more as a possible path rather than an intention. It's a common accusation but seems outlandish and unnecessary to me. If anyone thinks this is wrong, please say so. I'm interested.

trevyn 9y ago
This is reasonable -- I think companies that get a solid team together and then look for a quick acquisition is a way for top players to capture something closer to their market value. Or as a way to develop good tech that a big player is interested in, without having to deal with the specifics of profitably monetizing that tech. I don't understand why he'd be cagey about telling us that, though.
v12golfcart 9y ago
My two cents, heavily influenced by Blank's book :) While any sentence-long description will be an oversimplification, I think fitting everything under the sun in a "1st way" is counterproductive. If all we're talking about is how they succeed with Ron's components in mind, then there are at least a few ways. I see the the need-being-met thing as a spectrum. The more unmet the need is, the less likely competition is a problem at that moment, so just solving it is sufficient (who knew having a car was actually a 'problem' versus purchasing transit from 'a' to 'b'?) I've also seen that sometimes a product that focuses on a niche and does it REALLY well is better (for that niche) and NOT cheaper, but they succeed too (e.g. Veeva). Sometimes a product that focuses on the lower end of the market is cheaper and not better (i.e. functionality) but ppl underestimate the long-tail of non-users. (maybe like Gusto vs. traditional payroll providers or RelateIQ vs. Salesforce) On acquisitions, I've heard that acquihires usually make little-to-no money for the investors. But as beambot also mentioned, the business could be acquired for hard tech that, even if no customers/bizmodel, some other business would find value in having (maybe like Facebook>Friendfeed or Linkedin>RunHop). But to reverse engineer that from day 1 I imagine would be even harder than building a product to an unmet need haha. You don't know if the bigger co is working on it internally or if they'd scoop up somebody else. Wonder if this was Meerkat's plan, gone awry <-- speculation. ¯\_(ツ)_/¯.
taneq 9y ago
Isn't that basically one of two possible paths for a startup? It seems like these days, most people aim for an "exit", ie. either an IPO or acquisition by one of the big companies. You don't often see people talking as if their endgame is to keep running and growing their company indefinitely. All of the focus seems to be on getting to the next series of funding. The survivability metric used is not income over burn rate, it's investment dollars over burn rate. The whole goal is to get as big as possible then exit.
- trevyn 9y ago
  You can keep running and growing your company indefinitely after an IPO, the liquidity provided just helps you grow faster by also leveraging the business' equity.

by gt_ 9y ago

trevyn 9y ago

This is reasonable -- I think companies that get a solid team together and then look for a quick acquisition is a way for top players to capture something closer to their market value. Or as a way to develop good tech that a big player is interested in, without having to deal with the specifics of profitably monetizing that tech. I don't understand why he'd be cagey about telling us that, though.

v12golfcart 9y ago

My two cents, heavily influenced by Blank's book :) While any sentence-long description will be an oversimplification, I think fitting everything under the sun in a "1st way" is counterproductive. If all we're talking about is how they succeed with Ron's components in mind, then there are at least a few ways. I see the the need-being-met thing as a spectrum. The more unmet the need is, the less likely competition is a problem at that moment, so just solving it is sufficient (who knew having a car was actually a 'problem' versus purchasing transit from 'a' to 'b'?) I've also seen that sometimes a product that focuses on a niche and does it REALLY well is better (for that niche) and NOT cheaper, but they succeed too (e.g. Veeva). Sometimes a product that focuses on the lower end of the market is cheaper and not better (i.e. functionality) but ppl underestimate the long-tail of non-users. (maybe like Gusto vs. traditional payroll providers or RelateIQ vs. Salesforce) On acquisitions, I've heard that acquihires usually make little-to-no money for the investors. But as beambot also mentioned, the business could be acquired for hard tech that, even if no customers/bizmodel, some other business would find value in having (maybe like Facebook>Friendfeed or Linkedin>RunHop). But to reverse engineer that from day 1 I imagine would be even harder than building a product to an unmet need haha. You don't know if the bigger co is working on it internally or if they'd scoop up somebody else. Wonder if this was Meerkat's plan, gone awry <-- speculation. ¯\_(ツ)_/¯.

taneq 9y ago

Isn't that basically one of two possible paths for a startup? It seems like these days, most people aim for an "exit", ie. either an IPO or acquisition by one of the big companies. You don't often see people talking as if their endgame is to keep running and growing their company indefinitely. All of the focus seems to be on getting to the next series of funding. The survivability metric used is not income over burn rate, it's investment dollars over burn rate. The whole goal is to get as big as possible then exit.

trevyn 9y ago
You can keep running and growing your company indefinitely after an IPO, the liquidity provided just helps you grow faster by also leveraging the business' equity.