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Talent acquisitions make me sad. I think about all the job creation machines that might have been. There's a standard model in the valley on both the supply an
by mmaunder 15y ago
Talent acquisitions make me sad. I think about all the job creation machines that might have been.
There's a standard model in the valley on both the supply and demand side. It goes like this:
On the demand side:
Recruiting costs money. Hiring talent is risky when you don't know the caliber. Picking up one engineer at a time is costly and inefficient because you're competing with many other great companies. Acquiring a group of proven engineers not only solves all these problems but it gives you a way to lock them into working for you for years with an earn-out. And every engineer knows that dev's who "sold a startup" get laid more.
On the supply side:
A great business model is to come up with a startup that is super-interesting to talented engineers. Raise money and recruit them in droves with the prospect of massive wealth and being the next Facebook. Hand out stock options like candy and never mention the difference between short and long-term capital gains. Then when you hit 10+ great employees, start shaking your booty around the valley and see if you can flip for $2M per engineer plus a nice cash-out for founders and investors. [Usually around $20M total].
- frossie 15y agoTalent acquisitions make me sad because they reduce diversity in the product place. I find it hard to believe that a company with 2,000 talented engineers will put out as much interesting stuff as 100 shops of 20 talented engineers. Also, while I am not in startups, I thought the whole attraction for those who do them is the independence in doing your own thing. I find it hard to believe that this can be achieved after being subsumed in Google, Facebook, or other giant.
- jmathai 15y agoIn an odd way "acquisition" defies that for a short period of time. It's almost like the startup is a means to acquisition. But ultimately the attraction is independence and faster iteration. That's why you see people who wind up going back to startups.
- lurker19 15y agoIt cuts both ways. Google smothered Urchin and pissed off customers, but they brought GA to a much wider audience and integrated with the rest of Google system. Similar for Writely and Grand Central and many more I would bet. It would be really wonderful if companies could use open standards and honest dealing, so that firms could interoperate effectively with out merging&acquiring. Our tax system punishes that, though, so it is much more cost-effective to buy a small company than to buy their product and pay sales tax.
- ojbyrne 15y agoMost decent engineers in the valley have at least a passing understanding of the tax system. But they also understand that being part of a successful startup looks pretty good on a resume, over and above the capital gains. And they understand that careers last longer than earnouts.