7 ms·

Acquisition condolences

108 points by johns 16y ago

phil 16y ago
Sometimes it cuts the other way though. Take Flickr: bought for just a bit more than Dopplr by a company with significant problems, today the #2 photo site in the world (after Facebook) and more relevant and vibrant than ever.
- gregory80 16y ago
  flickr is huge, but I don't think yahoo has done very much to advance the original feature set. which is also true for delicious. though I agree there are cases, I'm hard pressed to find many. Maybe android (google), but not dodgeball (google).
  - blasdel 16y ago
    Though Yahoo did do things to clean up some of the dipshit decisions made by the founders after they left. Originally if you uploaded anything but photos taken with a lensed camera (like illustrations or screenshots), your account would be marked so that everything you posted never appeared in searches or public site areas. This practice only stopped maybe 2 years ago. They also finally redesigned the photo pages to display them larger than 400px wide. It's no longer lower-res than Facebook, but it's still much slower since they don't prefetch images.
  - neilk 16y ago
    The acquirer rarely adds any features to a startup. When you're small, adding features is relatively easier. If you haven't added the feature by acquisition, it will only take longer when you have even more customers and more stakeholders and a more complicated set of relationships. The acquirer is mainly adding the ability to scale up, either through financial stability or other resources. In the case of Flickr and Yahoo, this is a relationship with its ups and downs, but Yahoo contributed a login system, search technology, millions of customers, data centers, and so on. Except for the search stuff, none of this is really a feature. The acquirer also extends the startup's lifetime, so they can think about taking a year or more to add a feature. For most startups, acquisition represents getting off the treadmill of adding features they can't sustain so their customers will continue to like them. Then they spend a year or more just catching up with their own success, while also integrating with the acquirer's infrastructure.
iamelgringo 16y ago
I'm really quite tired of the arm chair quarterbacking that occurs when a startup decides to exit. Ron Conway said it best in response to Arrington's "Dip shit companies" comment. Ultimately it's up to the founders. The founders have put the blood sweat and tears into the company. It is the founder's life, their equity and their company. If they decide to cash out, then good for them. If they decide to stick it out and work towards an IPO, good for them. The founder is the gladiator in the arena, fighting for their company and their lives. Who are we to publicly criticize and belittle them. Being a founder is hard enough as it is without other founders publicly criticizing their decisions while waiting for the delivery of their custom Pagani Zonda[1]. ref: [1] : http://www.autoblog.com/2010/09/07/pagani-zonda-hh-commissioner-revealed-as-30-year-old-chicago-sof/ http://www.autoblog.com/2010/09/07/pagani-zonda-hh-commissio...
- ajg1977 16y ago
  I know people like to jump on the 37signals guys, but I don't feel this article is a criticism of founders or investors who choose to sell or be acquired. It's a footnote reminder that acquisitions, no matter how well intentioned or promising, often result in promising products gradually being starved of attention and resources as the fickle nature of the acquirer shifts to other matters. Condolences to the users as the product is left to wither in "maintenance mode", or mothballed entirely with the sourcecode & IP archived in a drawer somewhere. It's interesting to contemplate what the del.icio.us and Lala's of the world may have become had they been able to go it alone, and conversely what would have happened to the Facebook or Twitter's had they been acquired in the first few years.
  - danilocampos 16y ago
    Very interesting – that is a conversation worth having. The trouble with 37signals and posts like this is their tone. It's shrill, nose held aloft, almost scoldy. It's guaranteed to polarize. I'm sure it's great for traffic, and thus builds their brand, but it doesn't generate the constructive conversation it could. edit: What's more, come on, "condolence?" Selling a business you built from the ground up is a career-defining move.
- 16y ago
adw 16y ago
The thing is: the Dopplr founders, early staff, and investors all likely made money. Whatever you call it, that's hardly a bad result for them... OK, bad day for Nokia. Dopplr's fault? Nope.
- samd 16y ago
  The argument isn't that some people don't make money, it's that the users and probably the founders are better off building a company that lasts. The users get a great product and the founders get to build and run a profitable business. Part of their argument (which is referenced but not explained in the post) is that it's not personally fulfilling to get rich and retire early but rather to continue to build.
  - adw 16y ago
    Reading the article, you can certainly argue that Dopplr didn't have the adoption curve they hoped for. They get money, they get to do something new (one founder's a partner at BERG London, who are pretty kick-ass). The users? Sure. But it's a free service. Like the recent quote says, the users are the product. (http://www.metafilter.com/95152/Userdriven-discontent http://www.metafilter.com/95152/Userdriven-discontent, top comment.) DHH's hating the players when he should hate the game.
endlessvoid94 16y ago
I have a really hard time being sad about this. Human beings create. We have new ideas daily. When some of them die, it's okay. And it's okay if someone made a LOT of money from the deal. People will cry. That's fine, meanwhile the people who just got bought will go on to create more, interesting, new ideas.
mixmax 16y ago
There are actually other motivations than having a shot at significance. Maybe the founders want to retire on their $20 mill. Maybe they want to go on to building bigger and better stuff with the money they've made. Maybe their investors are prudent and actually expect a return on their money sometime this decade. This is rather one-sided, but as always from 37signals great linkbait.
dhh 16y ago
If there's a scoreboard for the assignment of blame, I would put it 98% on acquirer and 2% on "acquireree". It's hard to fault someone for taking a $20M exit too harshly, but it's quite easy to fault a share-holder backed corporation that should know better.
- patio11 16y ago
  To be fair, $20 million acquisitions would not be the first time money was wasted at a publicly traded company. That is actually pretty cheap compared to running a line of business with no future, such as the search engine at Yahoo or the automobile manufacturing at General Motors. (An obscure American health insurance company, misnamed due to funny historical issues.)
  - jacquesm 16y ago
    The pension funds of GM are at least as big a problem as the health insurance part. And GM still sells very large numbers of vehicles, if Skoda could be turned around I don't see any reason why the same could not happen to GM.
- davidw 16y ago
  A more interesting analysis might use data on acquisitions to chart how companies do compared to what they do or don't buy, and what they do with the acquired people and technology. That would at least be a start at determining whether there is really money being wasted or not.
growl 16y ago
Bad for the startup, but what about the founders? If they are not allowed to cash, they can end up with nothing: condolences to them. As for J.Fried, it's easier to get a few millions from Bezos, then take money to the founders WITHOUT selling, then advocate others to take the risk he didn't have to. See DHH interview on This Week in Startups #46: "Money taken from (Jeff Bezos) went to the founders and wasn’t to grow the company" http://thisweekinstartups.com/2010/03/twist-46-with-david-heinemeier-hansson/ http://thisweekinstartups.com/2010/03/twist-46-with-david-he...
danilocampos 16y ago
Could this be any more self-righteous? Here's the deal: You build value in a startup. A company comes along and sees that value, decides it's worth some cash to advance some internal mission. Company offers you something that feels like a good deal. Boom: sold. Right? Who better than the people who built the company can judge the quality of these offers? Moreover, let's say stodgy old company absorbs an awesome startup and puts their tech forever in the basement (a la Nokia here, or Microsoft with Danger). So what? It's not as though these bright minded founders simply evaporate into the atmosphere, forever lost to the future of human civilization. Now these guys are smarter, more experienced, and hopefully even better capitalized than when they started. If they're truly so bright, off to build a new idea they will go. And if not, no big deal either, the world got what it could from them. Who's to say their idea/technology isn't in better hands now, held by a company with perhaps steadier revenues or a more mature infrastructure for distributing or selling the product? There's value in independence. There's value in seeing things through with the long view. Absolutely no disagreement there. But as long as you're not running an elaborate scam, how you make your money, who acquires your company and what they do with it afterward is none of my business. I hope you got a great deal and that you're in great shape for your next stab at the next big thing. (edit: if you end up making a dominant yet shitty product, though, I reserve the right to pine for the next big disruption.)
- jacoblyles 16y ago
  So a few deserving hard working people get rewarded and all the value they created for others evaporates. It seems like a grey event, more than a black or white one. Don't get me wrong, I'd take the money and run most likely. But I'd feel bad if my product got buried and forgot about.
  - bond 16y ago
    You've done your part, you sold. It's not up to you to worry about the product anymore. You may feel bad for what happens after but you have to think that it's not on your hands anymore, you sold...
    - 16y ago
danielnicollet 16y ago
You know the rules from the start. You start a company and you own only what you put in it. If it's ideas, you'll own them. Comes the day you need cash, investors make an offer. You don't have to take it. If you do, time to share a piece of your company, or more. Comes the day your little startup attracts the attention of a behemoth, they offer you a deal. You don't have to sell. So all in all, I would recommend the following: Only complain about the way an investor treats your company if they deceived you. Otherwise, just accept that it's not your toy anymore and you got paid for it.
bond 16y ago
It's up to the founders to judge a good exit or not. They are the ones who built the product and they know if the offer is good enough based on their product and their lives. I just don't understand the flak founders get when they sell. Tell others is bad to sell without knowing the dynamics of the company and founders is not the way to do it. People have different expectations from life and their work. One thing is growing a business and having no problems with money and feeling good about it and having no plans to sell, other is building a business and trying to make a living off of it. If you get a good offer and meets your expectations is reasonably that you would sell. Ultimately is up to the founders to know what to do with their product and we have nothing to do with their decision because we aren't part of the business. If the product goes to the basement after being acquired that gives the rest of us an opportunity to build another better than the one who was acquired. The founders have done their job and it's time to move on and think about a new idea.
bradly 16y ago
Shouldn't we feel more sorry for the people who can cash out and spend the next 50 years on a beach with their families and friends, but choose to work instead? Don't get me wrong; I love creating and I am really looking forward to working on my start-up full time, but you know what I love even more? My family and my friends. If I had an opportunity to comfortably spend every day with them, I wouldn't think twice.
- scootklein 16y ago
  it never is, nor it should be, a binary choice. you forever have to find a balance between the two. if you would quit your startup forever assuming you had full financial backing to spend with your family and friends, then you really see your startup as a means to an end and not a hobby/lifestyle like many others do you call it work, many others call it their hobby. they just happen to do it full time and get paid for it.
  - bradly 16y ago
    You are right, each person has their own balance they must find. Otherwise, my comment is no different than dhh's article. I would argue, though, that I can still see my startups as a hobby/lifestyle even though I would I be more than happy to retire early with fu money. Primarily because I would still want to start build my own products even without the lure of getting rich quickly.
hasenj 16y ago
I think many HNers are missing the point. This shows that building something with no profits in the hopes of getting "acquired" is not a sustainable model. Cases like this might eventually convince big companies that acquiring startups is not that valuable after all; specially the startups that have no business model other than hoping to get acquired. This is specially true if you (as a big company) think you're acquiring the talent (the guys who built the startup). The truth is, they will inevitable leave, because working in big companies sucks. Building something valuable without a business model other than hoping to get acquired sounds like a scam against big companies. Basically the business model is to sell the product once for a huge sum of money, and the guy who buys the product (the big company) doesn't get anything out of it; hence the scam. The second point is, your product (as a startup) is now dead. Doesn't that make you sad? Wouldn't you be more satisfied if users loved you and you were making money and still doing what you love?
joelmichael 16y ago
He is right that acquisitions kill companies, and it is tragic to watch. I admire the romance DHH attaches to his work. You can tell he pours his heart into it. But he underestimates the benefits of money. Even if "mojito island" is a mirage, having enough money so that you don't have to work again is extremely valuable. You can take long breaks, tour the world, or pursue endeavors that may not necessarily be profitable, such as art, philanthropy, or politics. If you choose, you also have the means to start a new company from a position of comfort and control. And besides, people often simply get tired of working on the same company and want a change of pace.
danielharan 16y ago
Right, according to the condescending trolls at 37s, selling a company for $20 million is a failure. Sounds like: "You poor thing, running a company by yourself so you decided to sell? Better luck next time, sucker" 37s built a good company. Congrats guys. Now quit shitting on other people's corn flakes. Deal?
Gibbon 16y ago
I noticed DHH said in the comments his beef was not with the founders selling their companies, but with the Megacorps that let their acquisitions rot.
- sushrutbidwai 16y ago
  I think sometimes these Megacorps buy out some one just so some one else cant do that and challenge them. Of course some of these could just be bad decisions.
risotto 16y ago
This isn't DHHs fault, but I think this is the straw that broke the camel's back w.r.t. my own reading of "startup news." This advice is worthless. Everything is possible in business. Get acquired and snuffed out, get acquired and blow up, don't get acquired and run a healthy business, don't get acquired and fade out. Get sued and go out of business tomorrow. Nobody has any idea how the founders and employees at Doppler feel. I respect my fellow professionals enough to congratulate them for their successes however they manifest, and to trust them to seek new opportunities if their current ones fail. The acquired founders and employees are oppressed and we should offer them condolences? People would kill to have these problems.
j_baker 16y ago
While this post is a bit on the dramatic side, I think the core point is good. I don't blame founders for selling companies knowing their product will be destroyed, nor do I blame BigCos for buying them. But how is this encouraging startups to provide something useful to society? It's just encouraging them to target products at larger companies, not to actual customers.
omnigoat 16y ago
Man, these guys talk about $20 mil as if it were chump change. Probably because they have all that blog-money now. If someone ever wants to buy my company for $20 mil, and I walk away with even half that, I will be a very, very happy man.
- bad_user 16y ago
  Probably because they make that amount of money in a single year.
aaroniba 16y ago
If megacorp buys a promising startup and thwarts it, then does this also create a new opportunity to fill the space left by the startup?
- ajdecon 16y ago
  Perhaps; but it seems likely to me that another startup in the same niche would find it harder to be acquired, as megacorp #1 doesn't need another acquisition, and other megacorps might not choose to enter that space themselves. A new startup in that space might have to be bootstrapped, which might not be an appealing option.
triii 16y ago
Don't listen to rich people telling you that you shouldn't get your first million dollars. Is this post that different than a VC hoping poor founders stay hungry?
pajarito 16y ago
I think there would me more condolences if money were hidden away from creators. Acquisition is a fruit you can take or reject but anyway is a sweet fruit.

108 points by johns 16y ago

phil 16y ago

Sometimes it cuts the other way though. Take Flickr: bought for just a bit more than Dopplr by a company with significant problems, today the #2 photo site in the world (after Facebook) and more relevant and vibrant than ever.

gregory80 16y ago
flickr is huge, but I don't think yahoo has done very much to advance the original feature set. which is also true for delicious. though I agree there are cases, I'm hard pressed to find many. Maybe android (google), but not dodgeball (google).
- blasdel 16y ago
  Though Yahoo did do things to clean up some of the dipshit decisions made by the founders after they left. Originally if you uploaded anything but photos taken with a lensed camera (like illustrations or screenshots), your account would be marked so that everything you posted never appeared in searches or public site areas. This practice only stopped maybe 2 years ago. They also finally redesigned the photo pages to display them larger than 400px wide. It's no longer lower-res than Facebook, but it's still much slower since they don't prefetch images.
- neilk 16y ago
  The acquirer rarely adds any features to a startup. When you're small, adding features is relatively easier. If you haven't added the feature by acquisition, it will only take longer when you have even more customers and more stakeholders and a more complicated set of relationships. The acquirer is mainly adding the ability to scale up, either through financial stability or other resources. In the case of Flickr and Yahoo, this is a relationship with its ups and downs, but Yahoo contributed a login system, search technology, millions of customers, data centers, and so on. Except for the search stuff, none of this is really a feature. The acquirer also extends the startup's lifetime, so they can think about taking a year or more to add a feature. For most startups, acquisition represents getting off the treadmill of adding features they can't sustain so their customers will continue to like them. Then they spend a year or more just catching up with their own success, while also integrating with the acquirer's infrastructure.

iamelgringo 16y ago

I'm really quite tired of the arm chair quarterbacking that occurs when a startup decides to exit. Ron Conway said it best in response to Arrington's "Dip shit companies" comment. Ultimately it's up to the founders. The founders have put the blood sweat and tears into the company. It is the founder's life, their equity and their company. If they decide to cash out, then good for them. If they decide to stick it out and work towards an IPO, good for them. The founder is the gladiator in the arena, fighting for their company and their lives. Who are we to publicly criticize and belittle them. Being a founder is hard enough as it is without other founders publicly criticizing their decisions while waiting for the delivery of their custom Pagani Zonda[1]. ref: [1] : http://www.autoblog.com/2010/09/07/pagani-zonda-hh-commissioner-revealed-as-30-year-old-chicago-sof/ http://www.autoblog.com/2010/09/07/pagani-zonda-hh-commissio...

ajg1977 16y ago
I know people like to jump on the 37signals guys, but I don't feel this article is a criticism of founders or investors who choose to sell or be acquired. It's a footnote reminder that acquisitions, no matter how well intentioned or promising, often result in promising products gradually being starved of attention and resources as the fickle nature of the acquirer shifts to other matters. Condolences to the users as the product is left to wither in "maintenance mode", or mothballed entirely with the sourcecode & IP archived in a drawer somewhere. It's interesting to contemplate what the del.icio.us and Lala's of the world may have become had they been able to go it alone, and conversely what would have happened to the Facebook or Twitter's had they been acquired in the first few years.
- danilocampos 16y ago
  Very interesting – that is a conversation worth having. The trouble with 37signals and posts like this is their tone. It's shrill, nose held aloft, almost scoldy. It's guaranteed to polarize. I'm sure it's great for traffic, and thus builds their brand, but it doesn't generate the constructive conversation it could. edit: What's more, come on, "condolence?" Selling a business you built from the ground up is a career-defining move.
16y ago

adw 16y ago

The thing is: the Dopplr founders, early staff, and investors all likely made money. Whatever you call it, that's hardly a bad result for them... OK, bad day for Nokia. Dopplr's fault? Nope.

samd 16y ago
The argument isn't that some people don't make money, it's that the users and probably the founders are better off building a company that lasts. The users get a great product and the founders get to build and run a profitable business. Part of their argument (which is referenced but not explained in the post) is that it's not personally fulfilling to get rich and retire early but rather to continue to build.
- adw 16y ago
  Reading the article, you can certainly argue that Dopplr didn't have the adoption curve they hoped for. They get money, they get to do something new (one founder's a partner at BERG London, who are pretty kick-ass). The users? Sure. But it's a free service. Like the recent quote says, the users are the product. (http://www.metafilter.com/95152/Userdriven-discontent http://www.metafilter.com/95152/Userdriven-discontent, top comment.) DHH's hating the players when he should hate the game.

endlessvoid94 16y ago

I have a really hard time being sad about this. Human beings create. We have new ideas daily. When some of them die, it's okay. And it's okay if someone made a LOT of money from the deal. People will cry. That's fine, meanwhile the people who just got bought will go on to create more, interesting, new ideas.

mixmax 16y ago

There are actually other motivations than having a shot at significance. Maybe the founders want to retire on their $20 mill. Maybe they want to go on to building bigger and better stuff with the money they've made. Maybe their investors are prudent and actually expect a return on their money sometime this decade. This is rather one-sided, but as always from 37signals great linkbait.

dhh 16y ago

If there's a scoreboard for the assignment of blame, I would put it 98% on acquirer and 2% on "acquireree". It's hard to fault someone for taking a $20M exit too harshly, but it's quite easy to fault a share-holder backed corporation that should know better.

patio11 16y ago
To be fair, $20 million acquisitions would not be the first time money was wasted at a publicly traded company. That is actually pretty cheap compared to running a line of business with no future, such as the search engine at Yahoo or the automobile manufacturing at General Motors. (An obscure American health insurance company, misnamed due to funny historical issues.)
- jacquesm 16y ago
  The pension funds of GM are at least as big a problem as the health insurance part. And GM still sells very large numbers of vehicles, if Skoda could be turned around I don't see any reason why the same could not happen to GM.
davidw 16y ago
A more interesting analysis might use data on acquisitions to chart how companies do compared to what they do or don't buy, and what they do with the acquired people and technology. That would at least be a start at determining whether there is really money being wasted or not.

growl 16y ago

Bad for the startup, but what about the founders? If they are not allowed to cash, they can end up with nothing: condolences to them. As for J.Fried, it's easier to get a few millions from Bezos, then take money to the founders WITHOUT selling, then advocate others to take the risk he didn't have to. See DHH interview on This Week in Startups #46: "Money taken from (Jeff Bezos) went to the founders and wasn’t to grow the company" http://thisweekinstartups.com/2010/03/twist-46-with-david-heinemeier-hansson/ http://thisweekinstartups.com/2010/03/twist-46-with-david-he...

danilocampos 16y ago

Could this be any more self-righteous? Here's the deal: You build value in a startup. A company comes along and sees that value, decides it's worth some cash to advance some internal mission. Company offers you something that feels like a good deal. Boom: sold. Right? Who better than the people who built the company can judge the quality of these offers? Moreover, let's say stodgy old company absorbs an awesome startup and puts their tech forever in the basement (a la Nokia here, or Microsoft with Danger). So what? It's not as though these bright minded founders simply evaporate into the atmosphere, forever lost to the future of human civilization. Now these guys are smarter, more experienced, and hopefully even better capitalized than when they started. If they're truly so bright, off to build a new idea they will go. And if not, no big deal either, the world got what it could from them. Who's to say their idea/technology isn't in better hands now, held by a company with perhaps steadier revenues or a more mature infrastructure for distributing or selling the product? There's value in independence. There's value in seeing things through with the long view. Absolutely no disagreement there. But as long as you're not running an elaborate scam, how you make your money, who acquires your company and what they do with it afterward is none of my business. I hope you got a great deal and that you're in great shape for your next stab at the next big thing. (edit: if you end up making a dominant yet shitty product, though, I reserve the right to pine for the next big disruption.)

jacoblyles 16y ago
So a few deserving hard working people get rewarded and all the value they created for others evaporates. It seems like a grey event, more than a black or white one. Don't get me wrong, I'd take the money and run most likely. But I'd feel bad if my product got buried and forgot about.
- bond 16y ago
  You've done your part, you sold. It's not up to you to worry about the product anymore. You may feel bad for what happens after but you have to think that it's not on your hands anymore, you sold...
  - 16y ago

danielnicollet 16y ago

You know the rules from the start. You start a company and you own only what you put in it. If it's ideas, you'll own them. Comes the day you need cash, investors make an offer. You don't have to take it. If you do, time to share a piece of your company, or more. Comes the day your little startup attracts the attention of a behemoth, they offer you a deal. You don't have to sell. So all in all, I would recommend the following: Only complain about the way an investor treats your company if they deceived you. Otherwise, just accept that it's not your toy anymore and you got paid for it.

bond 16y ago

It's up to the founders to judge a good exit or not. They are the ones who built the product and they know if the offer is good enough based on their product and their lives. I just don't understand the flak founders get when they sell. Tell others is bad to sell without knowing the dynamics of the company and founders is not the way to do it. People have different expectations from life and their work. One thing is growing a business and having no problems with money and feeling good about it and having no plans to sell, other is building a business and trying to make a living off of it. If you get a good offer and meets your expectations is reasonably that you would sell. Ultimately is up to the founders to know what to do with their product and we have nothing to do with their decision because we aren't part of the business. If the product goes to the basement after being acquired that gives the rest of us an opportunity to build another better than the one who was acquired. The founders have done their job and it's time to move on and think about a new idea.

bradly 16y ago

Shouldn't we feel more sorry for the people who can cash out and spend the next 50 years on a beach with their families and friends, but choose to work instead? Don't get me wrong; I love creating and I am really looking forward to working on my start-up full time, but you know what I love even more? My family and my friends. If I had an opportunity to comfortably spend every day with them, I wouldn't think twice.

scootklein 16y ago
it never is, nor it should be, a binary choice. you forever have to find a balance between the two. if you would quit your startup forever assuming you had full financial backing to spend with your family and friends, then you really see your startup as a means to an end and not a hobby/lifestyle like many others do you call it work, many others call it their hobby. they just happen to do it full time and get paid for it.
- bradly 16y ago
  You are right, each person has their own balance they must find. Otherwise, my comment is no different than dhh's article. I would argue, though, that I can still see my startups as a hobby/lifestyle even though I would I be more than happy to retire early with fu money. Primarily because I would still want to start build my own products even without the lure of getting rich quickly.

hasenj 16y ago

I think many HNers are missing the point. This shows that building something with no profits in the hopes of getting "acquired" is not a sustainable model. Cases like this might eventually convince big companies that acquiring startups is not that valuable after all; specially the startups that have no business model other than hoping to get acquired. This is specially true if you (as a big company) think you're acquiring the talent (the guys who built the startup). The truth is, they will inevitable leave, because working in big companies sucks. Building something valuable without a business model other than hoping to get acquired sounds like a scam against big companies. Basically the business model is to sell the product once for a huge sum of money, and the guy who buys the product (the big company) doesn't get anything out of it; hence the scam. The second point is, your product (as a startup) is now dead. Doesn't that make you sad? Wouldn't you be more satisfied if users loved you and you were making money and still doing what you love?

joelmichael 16y ago

He is right that acquisitions kill companies, and it is tragic to watch. I admire the romance DHH attaches to his work. You can tell he pours his heart into it. But he underestimates the benefits of money. Even if "mojito island" is a mirage, having enough money so that you don't have to work again is extremely valuable. You can take long breaks, tour the world, or pursue endeavors that may not necessarily be profitable, such as art, philanthropy, or politics. If you choose, you also have the means to start a new company from a position of comfort and control. And besides, people often simply get tired of working on the same company and want a change of pace.

danielharan 16y ago

Right, according to the condescending trolls at 37s, selling a company for $20 million is a failure. Sounds like: "You poor thing, running a company by yourself so you decided to sell? Better luck next time, sucker" 37s built a good company. Congrats guys. Now quit shitting on other people's corn flakes. Deal?

Gibbon 16y ago

I noticed DHH said in the comments his beef was not with the founders selling their companies, but with the Megacorps that let their acquisitions rot.

sushrutbidwai 16y ago
I think sometimes these Megacorps buy out some one just so some one else cant do that and challenge them. Of course some of these could just be bad decisions.

risotto 16y ago

This isn't DHHs fault, but I think this is the straw that broke the camel's back w.r.t. my own reading of "startup news." This advice is worthless. Everything is possible in business. Get acquired and snuffed out, get acquired and blow up, don't get acquired and run a healthy business, don't get acquired and fade out. Get sued and go out of business tomorrow. Nobody has any idea how the founders and employees at Doppler feel. I respect my fellow professionals enough to congratulate them for their successes however they manifest, and to trust them to seek new opportunities if their current ones fail. The acquired founders and employees are oppressed and we should offer them condolences? People would kill to have these problems.

j_baker 16y ago

While this post is a bit on the dramatic side, I think the core point is good. I don't blame founders for selling companies knowing their product will be destroyed, nor do I blame BigCos for buying them. But how is this encouraging startups to provide something useful to society? It's just encouraging them to target products at larger companies, not to actual customers.

omnigoat 16y ago

Man, these guys talk about $20 mil as if it were chump change. Probably because they have all that blog-money now. If someone ever wants to buy my company for $20 mil, and I walk away with even half that, I will be a very, very happy man.

bad_user 16y ago
Probably because they make that amount of money in a single year.

aaroniba 16y ago

If megacorp buys a promising startup and thwarts it, then does this also create a new opportunity to fill the space left by the startup?

ajdecon 16y ago
Perhaps; but it seems likely to me that another startup in the same niche would find it harder to be acquired, as megacorp #1 doesn't need another acquisition, and other megacorps might not choose to enter that space themselves. A new startup in that space might have to be bootstrapped, which might not be an appealing option.

triii 16y ago

Don't listen to rich people telling you that you shouldn't get your first million dollars. Is this post that different than a VC hoping poor founders stay hungry?

pajarito 16y ago

I think there would me more condolences if money were hidden away from creators. Acquisition is a fruit you can take or reject but anyway is a sweet fruit.