4 ms·

Facebook's recent talent acquisitions sort of make sense to me from Facebook's standpoint (good, entrepreneurial talent is hard to find), but I wonder how the f

by waxman 16y ago

Facebook's recent talent acquisitions sort of make sense to me from Facebook's standpoint (good, entrepreneurial talent is hard to find), but I wonder how the founders, employees, users, and investors feel about these relatively odd buyouts. This drop.io deal sounds a lot like the Hot Potato acquisition from a few months ago: in both cases the startups were well-funded, but didn't have much traction, and then Facebook paid 8 figures to essentially buy the main founder (Sam Lessin at drop.io, Justin Schaffer at Hot Potato), and essentially let everything else die (the sites were shut down, the technology scrapped, other employees weren't hired by facebook, etc.) A few questions for HN: - Is Facebook paying too much for these founders? (They're basically shelling out a $10 MM signing bonus that lets these entrepreneurs placate their investors, and then come to Facebook. (Accept the founders only get a fraction of the money, obviously). Is it worth it? What are other new Facebook executives paid in signing bonuses?) - What do the investors think about this? (Are the investors in Hot Potato and Drop.io happy to get a modest return instead of nothing (because these companies hadn't taken off yet), or are they frustrated that these companies ended somewhat abruptly?) - How do the employees feel? (Does it feel like success for them when the whole point of the acquisition is really just to buy their boss? Obviously they get money for their equity, so maybe that trumps any other feelings.) [Full disclosure: I actually work with one of the co-founders of Hot Potato (who didn't go to Facebook), so I know his opinions on this issue, but I'm still curious to hear others' thoughts]. - How do users feel? (Are these buyouts fair to them?) - And lastly, Isn't there a slight paradox with the fact that these founders are being plucked at such high premiums because they're brilliant leaders, and yet, in both the cases of Hot Potato and Drop.io, these startups weren't runaway successes? In other words, doesn't the lack of clear success of these startups undermine the basic premise that the founders deserve $10 MM "signing bonuses"?

hartror 16y ago
I doubt the investors are unhappy with an exit, employees and users on the other hand are probably disappointed (though I hope the employees saw something of the exit which probably alleviates disappointment).
_delirium 16y ago
As a user it's definitely somewhat disheartening. It seems like whenever something cool/useful comes from a small, previously unknown team, there's a significant chance that it'll just be bought and killed by a big player. Both makes me more wary of relying on such services to begin with (even if they're paid!), and from a progress-of-technology perspective feels unfortunate. I'm sure it's great for the founders, but it's like big companies are using their cash pile to do the opposite of encouraging technological progress: find technological progress elsewhere, buy it, and axe it. Things do occasionally turn out okay, e.g. Google allowed the EtherPad team to open-source the code after Google bought/killed it. And, although I don't personally use/like it, Dodgeball got more or less resurrected as FourSquare after Google bought/killed it.
- codemechanic 16y ago
  Time to checkout Tonido http://news.ycombinator.com/item?id=1849607 http://news.ycombinator.com/item?id=1849607
rwhitman 16y ago
I have a suspicion - based purely on speculation - the unspoken thing here is that most of these businesses had awesome products & teams but were hurting so badly financially that they were on their last breath. I wouldn't be surprised if its more of a case of struggling but very smart startup, about to collapse, turns to facebook as a last resort liquidation move. Handing over to FB or Google and having them pay back some investors and shut down the service looks much better than sending out a solemn "we screwed up" email to all your users & stakeholders...
biznickman 16y ago
To be totally frank ... Zuckerberg just helped out one of his friends. Sam Lessin lived in the same dorm as Zuck and they were friends (despite the fact that the Social Network movie suggests he only had one, he had a few). Sam helped him out and now he's repaying the favor. If it was $10M+ that's nothing when Zuck's a billionaire on paper. Additionally, it doesn't matter what the investors think as he still has complete control of the company. I don't think it's fair to compare Hot Potato and drop.io as there's a history with the founder that wasn't there before. If I'm sitting on a runaway success, you better be damn sure that I'm going to help my genius friend (Sam's a crazy smart guy) out and bring him on whenever I can. He's only going to add value and when Facebook is expected to be worth $100 billion eventually (pure speculation right now but it's in that direction), there's nothing wrong with holding out a golden hand.
- ahoyhere 16y ago
  Then why did Sam fuck over his loyal users? Nobody ever asked us to pay. We would have. But suddenly, bam! It's gone. Was it a non-negotiable part of the acquisition? Or did he not even try to negotiate?
  - edash 16y ago
    Drop.io has paid features and additional storage for a fee. I've been a paying user for two years. Paid accounts were even mentioned in the blog post announcing the acquisition. Seeing the recent development of the site and the evolution of Dropbox made it clear Drop.io wouldn't be around long term.
    - ahoyhere 16y ago
      I never saw it. I never got an email. I never even knew the paid option existed. Drop.io obviously choked to death because it was too afraid that gesticulating its agony would be embarrassing.
petervandijck 16y ago
If the site/businesses that they had build where worth anything at all, surely they would have sold them too instead of shutting them down?
brown9-2 16y ago
Can anyone think of an example of one of these eight-digit "talent acquisitions" that would now be viewed as a success (several years later)?
- chollida1 16y ago
  That's a great question to ask. The problem is, how would you measure if an acquisition was a success? Facebook's Friend Feed acquisition wasn't that long ago but it looks like a success; They got a new CTO out of the acquisition.

by waxman 16y ago

hartror 16y ago

I doubt the investors are unhappy with an exit, employees and users on the other hand are probably disappointed (though I hope the employees saw something of the exit which probably alleviates disappointment).

_delirium 16y ago

As a user it's definitely somewhat disheartening. It seems like whenever something cool/useful comes from a small, previously unknown team, there's a significant chance that it'll just be bought and killed by a big player. Both makes me more wary of relying on such services to begin with (even if they're paid!), and from a progress-of-technology perspective feels unfortunate. I'm sure it's great for the founders, but it's like big companies are using their cash pile to do the opposite of encouraging technological progress: find technological progress elsewhere, buy it, and axe it. Things do occasionally turn out okay, e.g. Google allowed the EtherPad team to open-source the code after Google bought/killed it. And, although I don't personally use/like it, Dodgeball got more or less resurrected as FourSquare after Google bought/killed it.

codemechanic 16y ago
Time to checkout Tonido http://news.ycombinator.com/item?id=1849607 http://news.ycombinator.com/item?id=1849607

rwhitman 16y ago

I have a suspicion - based purely on speculation - the unspoken thing here is that most of these businesses had awesome products & teams but were hurting so badly financially that they were on their last breath. I wouldn't be surprised if its more of a case of struggling but very smart startup, about to collapse, turns to facebook as a last resort liquidation move. Handing over to FB or Google and having them pay back some investors and shut down the service looks much better than sending out a solemn "we screwed up" email to all your users & stakeholders...

biznickman 16y ago

To be totally frank ... Zuckerberg just helped out one of his friends. Sam Lessin lived in the same dorm as Zuck and they were friends (despite the fact that the Social Network movie suggests he only had one, he had a few). Sam helped him out and now he's repaying the favor. If it was $10M+ that's nothing when Zuck's a billionaire on paper. Additionally, it doesn't matter what the investors think as he still has complete control of the company. I don't think it's fair to compare Hot Potato and drop.io as there's a history with the founder that wasn't there before. If I'm sitting on a runaway success, you better be damn sure that I'm going to help my genius friend (Sam's a crazy smart guy) out and bring him on whenever I can. He's only going to add value and when Facebook is expected to be worth $100 billion eventually (pure speculation right now but it's in that direction), there's nothing wrong with holding out a golden hand.

ahoyhere 16y ago
Then why did Sam fuck over his loyal users? Nobody ever asked us to pay. We would have. But suddenly, bam! It's gone. Was it a non-negotiable part of the acquisition? Or did he not even try to negotiate?
- edash 16y ago
  Drop.io has paid features and additional storage for a fee. I've been a paying user for two years. Paid accounts were even mentioned in the blog post announcing the acquisition. Seeing the recent development of the site and the evolution of Dropbox made it clear Drop.io wouldn't be around long term.
  - ahoyhere 16y ago
    I never saw it. I never got an email. I never even knew the paid option existed. Drop.io obviously choked to death because it was too afraid that gesticulating its agony would be embarrassing.

petervandijck 16y ago

If the site/businesses that they had build where worth anything at all, surely they would have sold them too instead of shutting them down?

brown9-2 16y ago

Can anyone think of an example of one of these eight-digit "talent acquisitions" that would now be viewed as a success (several years later)?

chollida1 16y ago
That's a great question to ask. The problem is, how would you measure if an acquisition was a success? Facebook's Friend Feed acquisition wasn't that long ago but it looks like a success; They got a new CTO out of the acquisition.