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Very hard to second guess such a well written article. Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay?

Very hard to second guess such a well written article. Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Salesforce seems good at keeping acquirees but enterprise is different. The acquired companies come with their own revenue and field sales.

beat 8y ago
It's kind of different for enterprise. The acquisition cycle is often to expose a good product to a more deeply entrenched sales system. Acquired companies have proven they have a product that enterprise companies are willing to buy (and go to some pain to do so), but they don't have the ability to sell anything anywhere that someone like Salesforce, IBM, or Atlassian can do.
wgerard 8y ago
> Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Hsieh? I mean, I don't know too much about the inner workings of Zappos but I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one. Then again maybe he's just the exception that proves the rule.
- AndrewKemendo 8y ago
  I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one Why? Zappos was minting money and sustainable in their own right well before the acquisition. IG had no datapoints showing they could sustainably make revenue when they were acquired.
  - wgerard 8y ago
    > Why? Hmm, I guess fundamentally I find it hard to believe that a large corporation would acquire a smaller one just to let them run completely independently - it just seems counter-intuitive unless the acquirer is a holding company, basically. It definitely also doesn't seem like Amazon's jam. Twitch seemed to have a pretty large upward trajectory (and path to profitability) right around the time they were acquired, and Amazon's still clearly guiding at least some of those major decisions.
    - sangnoir 8y ago
      > Hmm, I guess fundamentally I find it hard to believe that a large corporation would acquire a smaller one just to let them run completely independently - it just seems counter-intuitive unless the acquirer is a holding company, basically. I don't find it hard to believe - it is a perfectly valid defensive move to contain a potential competitor. What if an independent Zappos decided to start selling everything, not just shoes? Also, it might provide an internal 'skunkworks' where Amazon finds lessons applicable to the larger organization without killing the golden-egg-laying goose. It's quite a reasonable way of self-disrupting.
    - ghostbrainalpha 8y ago
      You are right that letting the acquired company "do whatever they want" wouldn't be Amazon's jam. But the Zappos case was different. They didn't NEED to sell, so they put in the selling agreement that they get to keep a bunch of autonomy. Basically Zappos loves being a part of Amazon for shipping and logistics benefits. But Zappos core strategy/identity is based on being an uncommonly fun place to work and being great to its employees. They wanted to make sure when they sold that the never had to deal with employees "the Amazon" way.
ashraymalhotra 8y ago
The advertising and media giant, Dentsu, seems to be pretty good at retaining original founders. https://www.thehindubusinessline.com/companies/how-dentsu-retains-founders-of-companies-it-acquires/article9795718.ece https://www.thehindubusinessline.com/companies/how-dentsu-re...

beat 8y ago

It's kind of different for enterprise. The acquisition cycle is often to expose a good product to a more deeply entrenched sales system. Acquired companies have proven they have a product that enterprise companies are willing to buy (and go to some pain to do so), but they don't have the ability to sell anything anywhere that someone like Salesforce, IBM, or Atlassian can do.

wgerard 8y ago

> Are there instances where the thesis that “folks who outsource the business side to the acquirer” stay? Hsieh? I mean, I don't know too much about the inner workings of Zappos but I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one. Then again maybe he's just the exception that proves the rule.

AndrewKemendo 8y ago
I find it hard to believe that the FB->IG relationship is significantly different from the Amazon->Zappos one Why? Zappos was minting money and sustainable in their own right well before the acquisition. IG had no datapoints showing they could sustainably make revenue when they were acquired.
- wgerard 8y ago
  > Why? Hmm, I guess fundamentally I find it hard to believe that a large corporation would acquire a smaller one just to let them run completely independently - it just seems counter-intuitive unless the acquirer is a holding company, basically. It definitely also doesn't seem like Amazon's jam. Twitch seemed to have a pretty large upward trajectory (and path to profitability) right around the time they were acquired, and Amazon's still clearly guiding at least some of those major decisions.
  - sangnoir 8y ago
    > Hmm, I guess fundamentally I find it hard to believe that a large corporation would acquire a smaller one just to let them run completely independently - it just seems counter-intuitive unless the acquirer is a holding company, basically. I don't find it hard to believe - it is a perfectly valid defensive move to contain a potential competitor. What if an independent Zappos decided to start selling everything, not just shoes? Also, it might provide an internal 'skunkworks' where Amazon finds lessons applicable to the larger organization without killing the golden-egg-laying goose. It's quite a reasonable way of self-disrupting.
  - ghostbrainalpha 8y ago
    You are right that letting the acquired company "do whatever they want" wouldn't be Amazon's jam. But the Zappos case was different. They didn't NEED to sell, so they put in the selling agreement that they get to keep a bunch of autonomy. Basically Zappos loves being a part of Amazon for shipping and logistics benefits. But Zappos core strategy/identity is based on being an uncommonly fun place to work and being great to its employees. They wanted to make sure when they sold that the never had to deal with employees "the Amazon" way.

ashraymalhotra 8y ago

The advertising and media giant, Dentsu, seems to be pretty good at retaining original founders. https://www.thehindubusinessline.com/companies/how-dentsu-retains-founders-of-companies-it-acquires/article9795718.ece https://www.thehindubusinessline.com/companies/how-dentsu-re...