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It's exactly these types of deals that regulators should look at if they want to prevent more monopolies in tech. You have what amounts to an entrenched busines

It's exactly these types of deals that regulators should look at if they want to prevent more monopolies in tech. You have what amounts to an entrenched business maintained by millions of lobbying dollars [1], buying a younger player offering the same service for free. [1] https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free https://www.propublica.org/article/inside-turbotax-20-year-f...

scarface74 7y ago
What do you think would happen to the startup culture if the government made it harder for a company to be acquired?
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- sitkack 7y ago
  Did you pitch for a t-ball team, because thanks for that sweet setup! We would have more sound business plans and ideas. Startup culture would be more about creating entities that can exist on their own (adults) vs a danger to be let loose into an existing market. The later is a shakedown, but lets not conflate the shakedown with our own goals of seeing outmoded businesses getting replaced. If we had free standing startups that can function on their own, they have the ability to replace existing players by being able to function long term and respond to changes. If we create startups that are then sold to the incumbents, we perpetuate their hegemony. These large corporations are effectively buying organs to stay alive.
  - aerovistae 7y ago
    Well put!!
  - scarface74 7y ago
    Off topic: I love this intro: Did you pitch for a t-ball team, because thanks for that sweet setup! On topic: Some businesses require so much funding up front that it’s not feasible. As always, there is a great blog post by Joel. https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-ben-and-jerrys-vs-amazon/ https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-... And I wish I could take credit for thinking about the consequences of making it harder for companies to be acquired, but I got the idea from Ben Thompson’s (Of Stratechery fame) Exponent podcast. (This link will take you to a website at the time stamp of the podcast if you don’t have Overcast installed) https://overcast.fm/+BihkIZ9fA/31:05 https://overcast.fm/+BihkIZ9fA/31:05
    - BlueTemplar 7y ago
      Well, this part didn't age well : > Another extremely strong network effect is proprietary chat systems like ICQ or AOL Instant Messenger. If you want to chat with people, you have to go where they are, and ICQ and AOL have the most people by far. Chances are, your friends are using one of those services, not one of the smaller ones like MSN Instant Messenger. With all of Microsoft’s muscle, money, and marketing skill, they are just not going to be able to break into auctions or instant messaging, because the network effects there are so strong.
      - scarface74 7y ago
        Doesn’t that kind of argue the point though that you don’t need government to interfere with tech to avoid monopolies and anticompetitive behavior? The market took care of that.
        BlueTemplar 7y ago
        ICQ and AOL basically died. While Microsoft bought Skype and basically morphed it into new-MSN. So Microsoft's slow growth, long-term strategy succeeded, while it shouldn't have (?).
        scarface74 7y ago
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- Psyladine 7y ago
  Sustainable business models that don't hold their breath for acquisition.
  - scarface74 7y ago
    Do you really want the government stepping in and telling you who you can and can’t sell your business to?
    - lexs 7y ago
      Yes
- Ozzie_osman 7y ago
  I think there were a bunch of other great replies to this, but just to chime in: I think there are positive and negative impacts on "startup culture". The negative: - added friction to building a startup, since one exit path is harder. The positive: - more focus on profitable companies, as opposed to ones that will only be viable if acquired. - a more competitive market, which might be better in the long run for start-ups I don't think the question we should be asking, though, if the effect on startup culture. I think what we should be asking is: what is the effect on users/consumers? To that end, imagine if the online ecosystem today included Instagram, WhatsApp, DoubleClick, Zappos, YouTube, Waze, just to name a few. Yes maybe some of them wouldn't have survived, but maybe that would have been the right thing to do. And I think that's the question regulators should be asking too. Whenever a large company is acquiring a smaller one: is this clearly good for consumers or not? I mean, if Intuit can make a good, believable case that this is good for users (ie "Once we buy Credit Karma we can give all our users free tax filing) or something like that, by all means, that's great... but I doubt that's what's happening here.
  - scarface74 7y ago
    How many of the companies below would have ever brought a product to market if Apple hadn’t acquired them? Are consumers worse off for Apple acquiring them? https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio... How would regulators know whether Apple acquiring the 100+ companies it acquired would be bad for consumers in advance? Do you really trust regulators to be both competent and apolitical? The positive: - more focus on profitable companies, as opposed to ones that will only be viable if acquired. - a more competitive market, which might be better in the long run for start-ups That would probably exclude every single YC backed company. Only two have gone public - DropBox and PagerDuty - and DropBox has never been profitable. I doubt any of them have ever been profitable.
    - Ozzie_osman 7y ago
      I meant "profitable" in the viable sense. Like either profitable now or could reasonably be so in the future, without requiring monopolistic pricing.
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sjc33 7y ago
I was surprised that the FTC actually blocked the Harry's shaving acquisition because it would be anti-competitive, and the Fitbit acquisition is still on the block as well. Not clear yet that this will be approved, though I wouldn't say TurboTax + Credit Karma have a monopoly on tax filing...

scarface74 7y ago

What do you think would happen to the startup culture if the government made it harder for a company to be acquired?

deleted 7y ago
[deleted]
deleted 7y ago
[deleted]
sitkack 7y ago
Did you pitch for a t-ball team, because thanks for that sweet setup! We would have more sound business plans and ideas. Startup culture would be more about creating entities that can exist on their own (adults) vs a danger to be let loose into an existing market. The later is a shakedown, but lets not conflate the shakedown with our own goals of seeing outmoded businesses getting replaced. If we had free standing startups that can function on their own, they have the ability to replace existing players by being able to function long term and respond to changes. If we create startups that are then sold to the incumbents, we perpetuate their hegemony. These large corporations are effectively buying organs to stay alive.
- aerovistae 7y ago
  Well put!!
- scarface74 7y ago
  Off topic: I love this intro: Did you pitch for a t-ball team, because thanks for that sweet setup! On topic: Some businesses require so much funding up front that it’s not feasible. As always, there is a great blog post by Joel. https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-ben-and-jerrys-vs-amazon/ https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-... And I wish I could take credit for thinking about the consequences of making it harder for companies to be acquired, but I got the idea from Ben Thompson’s (Of Stratechery fame) Exponent podcast. (This link will take you to a website at the time stamp of the podcast if you don’t have Overcast installed) https://overcast.fm/+BihkIZ9fA/31:05 https://overcast.fm/+BihkIZ9fA/31:05
  - BlueTemplar 7y ago
    Well, this part didn't age well : > Another extremely strong network effect is proprietary chat systems like ICQ or AOL Instant Messenger. If you want to chat with people, you have to go where they are, and ICQ and AOL have the most people by far. Chances are, your friends are using one of those services, not one of the smaller ones like MSN Instant Messenger. With all of Microsoft’s muscle, money, and marketing skill, they are just not going to be able to break into auctions or instant messaging, because the network effects there are so strong.
    - scarface74 7y ago
      Doesn’t that kind of argue the point though that you don’t need government to interfere with tech to avoid monopolies and anticompetitive behavior? The market took care of that.
      - BlueTemplar 7y ago
        ICQ and AOL basically died. While Microsoft bought Skype and basically morphed it into new-MSN. So Microsoft's slow growth, long-term strategy succeeded, while it shouldn't have (?).
        scarface74 7y ago
- deleted 7y ago
  [deleted]
Psyladine 7y ago
Sustainable business models that don't hold their breath for acquisition.
- scarface74 7y ago
  Do you really want the government stepping in and telling you who you can and can’t sell your business to?
  - lexs 7y ago
    Yes
Ozzie_osman 7y ago
I think there were a bunch of other great replies to this, but just to chime in: I think there are positive and negative impacts on "startup culture". The negative: - added friction to building a startup, since one exit path is harder. The positive: - more focus on profitable companies, as opposed to ones that will only be viable if acquired. - a more competitive market, which might be better in the long run for start-ups I don't think the question we should be asking, though, if the effect on startup culture. I think what we should be asking is: what is the effect on users/consumers? To that end, imagine if the online ecosystem today included Instagram, WhatsApp, DoubleClick, Zappos, YouTube, Waze, just to name a few. Yes maybe some of them wouldn't have survived, but maybe that would have been the right thing to do. And I think that's the question regulators should be asking too. Whenever a large company is acquiring a smaller one: is this clearly good for consumers or not? I mean, if Intuit can make a good, believable case that this is good for users (ie "Once we buy Credit Karma we can give all our users free tax filing) or something like that, by all means, that's great... but I doubt that's what's happening here.
- scarface74 7y ago
  How many of the companies below would have ever brought a product to market if Apple hadn’t acquired them? Are consumers worse off for Apple acquiring them? https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio... How would regulators know whether Apple acquiring the 100+ companies it acquired would be bad for consumers in advance? Do you really trust regulators to be both competent and apolitical? The positive: - more focus on profitable companies, as opposed to ones that will only be viable if acquired. - a more competitive market, which might be better in the long run for start-ups That would probably exclude every single YC backed company. Only two have gone public - DropBox and PagerDuty - and DropBox has never been profitable. I doubt any of them have ever been profitable.
  - Ozzie_osman 7y ago
    I meant "profitable" in the viable sense. Like either profitable now or could reasonably be so in the future, without requiring monopolistic pricing.
deleted 7y ago
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sjc33 7y ago

I was surprised that the FTC actually blocked the Harry's shaving acquisition because it would be anti-competitive, and the Fitbit acquisition is still on the block as well. Not clear yet that this will be approved, though I wouldn't say TurboTax + Credit Karma have a monopoly on tax filing...