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Ironically, that statement is the strongest argument in favour of blocking the acquisition I've heard. Any company so arrogant about its market dominance it as

Ironically, that statement is the strongest argument in favour of blocking the acquisition I've heard. Any company so arrogant about its market dominance it assumes that the only way for an entrepreneur to succeed in building a company in its market is to sell to them deserves to be broken up.

paulcole 5y ago
I think that's the only way for a gif hosting/copyright infringing platform to succeed. https://medium.com/@pasql/giphy-is-stealing-from-artists-689177b20c08 https://medium.com/@pasql/giphy-is-stealing-from-artists-689... Other companies that exchange money for goods and services might have better luck.
Spivak 5y ago
Or ya know, that startups talk about having an exit that's either getting bought by someone or an IPO. Nobody in the startup world seems terribly interested in building a lifestyle business.
- dd36 5y ago
  The media only talk about companies with investors. Investors want exits. Investors influence the media to talk about companies they’re invested in.
  - jimnotgym 5y ago
    Or the intermediary making money out of the investors want exits, and only get paid when a deal moves through. For many investors they need neither exits, dividends or anything other than capital growth.
    - dd36 5y ago
      The intermediary is effectively invested, right? If you mean like a banker. IME, investors want a way to get their cash out. A private but successful lifestyle business isn’t going to get publicity.
- willcipriano 5y ago
  Back in my day, businesses that made income by selling goods or services to customers were just called businesses, not lifestyle businesses.
  - BrianOnHN 5y ago
    Another crazy old idea: Businesses that prioritize people over capital.
    - lotsofpulp 5y ago
      Or governments take care of people, businesses focus on selling products and services.
      - actually_a_dog 5y ago
        Or, maybe.... just maybe... both businesses and governments consider and prioritize the humans in the equation.
        deleted 5y ago
        [deleted]
        Pxtl 5y ago
        Businesses that don't prioritize winning in the market will be outperformed by businesses that do. Let the government do the job of setting the boundaries on the market so they can do what's best for humans, and let businesses do the job of optimizing for victory within the market. That's where their respective incentives lie, so that's what they do best at. tl:dr; don't hate the player, hate the game.
        deleted 5y ago
        [deleted]
        actually_a_dog 5y ago
        Ok. That's what your economics textbook thinks. What do you think? Competition is not the only way to get things done. Humans are definitely capable of collective action. You may recall a few weeks ago where hundreds of millions of Americans just said "fuck 2 AM, it's now 1 AM" early one Sunday. How would you harness that?
- deleted 5y ago
  [deleted]
- CivBase 5y ago
  Yeah, that's one thing that's always bugged me about startups and VC. There seems to be general agreement that two big problems we're facing in the economy are 1) a slow consolidation of businesses into a handful of mega-corps which span across many markets and 2) an obsession with short-term gains to appease investors and shareholders. Yet the startup world seems to be fixated on "exit strategies" which perpetuate those two problems.
  - Spivak 5y ago
    Because founders and early stock-holding employees want to get paid out, move on to something else, and let someone else handle the long-tail maintenance of the business. This is valuable work in the economy because you want people who are good at starting businesses, proving markets, getting investors, yada yada to be doing that and people who are good at running businesses to do that once it has roots. The intractable problem is that corporations with loads of capital are the ones equipped to run businesses long-term. I would love a world where an exit is turning the business over to the employees and a newly hired CEO in exchange for a payout from the business itself but massive corporations will pay more, have cash on hand, and won't default.
    - XMPPwocky 5y ago
      "This is valuable work in the economy because you want [...trimmed...] people who are good at running businesses to do that once it has roots." In my experience, things tend to get dramatically worse for users when a business is acquired or sold, not better. Long-term sustainability also seems to be significantly decreased by acquisitions, not increased- even when the business isn't closed outright (e.g. Pebble). And, from your second paragraph, it seems like you recognize this too. So, yeah, you might want people who are good at running businesses to do that - but selling a business does not seem to put people who are good at running businesses in charge of it. If anything, it's the opposite.
- notahacker 5y ago
  There are markets where one potential acquirer being unable to do so doesn't completely scupper your chances of any exit though. If the antitrust regulators came down on Microsoft again, I don't think we'd see their lawyers argue that there's no other route for B2B software vendors to cash out except to sell to them.
- mikepurvis 5y ago
  Isn't there a selection bias going on here? The only entrepreneurs allowed in the club who don't fit the go-for-broke mold are those who make it there by being celebrities in other ways (thinking Fried/DHH or someone like Maciej Cegłowski).
frankfrankfrank 5y ago
Not to sound too obvious, but that is precisely the current state that is also ever increasing. As with seemingly most things, we are witnessing a reemergence of a system similar to what existed before the American Revolution, the feudalistic, aristocratic, monarchical system where you must show fealty to your vassal lord corporation. Even the subject supposed effort to prevent monopolization is not understanding the underlying issue, that competition (a form of freedom) has for all intents and purposes been totally subverted because rather than monopolizing an industry or sector, today's monopolists/cartels realized they should just totally supplant the whole market so people have no choice but to kiss their royal ring. That is something that has effectively been accomplished and society may just have not understood yet what's going on, or likely those who would be expected to ward this off were also totally compromised and corrupted ($$$). What we need is reinstatement of conditions that lead to are allow competition. That may take on several different forms, e.g., (not to pick on Apple, but to use a recent example) that Apple must provide the same access to core integration (based on reasonable technical specifications anyone can meet) that AirTags utilize to competitors like Tile, including the whole apple device network (AirTags are real reason that SARS-CoV-2 "contact tracing" was snuck in to save us all, btw). Another example; Apple and Google, may not block or ban any user or any app that meets its general and public technical specifications and are not a violation of law and human rights like free expression, whether out vassal lord corporations like what users have to say or if an app is a competitor or does something they don't like or not. The alternative should simply be that Apple and Google can just build their own internet if they wish to violate people's rights on the public internet and communications … at the very least.
- random314 5y ago
  > As with seemingly most things, we are witnessing a reemergence of a system similar to what existed before the American Revolution, the feudalistic, aristocratic, monarchical system where you must show fealty to your vassal lord corporation. This is not something new, but has always been the case. Capitalism is the 2nd iteration of feudalism. When the French revolution threw feudalism into jeopardy, the feudal lords - conservatives who sat in the right wing of the French parliament- hoped capitalism would rescue feudalism and help maintain social hierarchies. Democracy is seen as anti feudal and anti capitalist in its genesis, by giving everyone one vote independent of wealth. Earliest proposals for elections were only for Male land owners. The founding fathers were capitalists for the most part.
asdfman123 5y ago
Yeah, now that you say it it does seem to be very close to "plata o plomo." (Translating as literally "silver or lead": take this money or take a bullet)
viro 5y ago
This is how the entire VC market works either get bought or IPO.
- londons_explore 5y ago
  Option 3 is to become very profitable and give big dividends back to those VC's... Few take that route though...
  - swiftcoder 5y ago
    I think you'll find that VCs aren't in it for dividends. If they were content with 10% per annum they'd play the S&P 500... You can certainly build a long-term profitable business, but you wont find VC funding for that.
    - londons_explore 5y ago
      But some businesses that take VC funding could pay out 1000% dividends every year, especially businesses that don't take much initial funding and manage to become a monopoly in some small niche market and decide not to expand further.
      - swiftcoder 5y ago
        It's certainly possible in niche cases, but if you tell a VC that is your plan, I thin you are likely to find a luke-warm response. Aiming at an acquisition is in many ways a surer bet that aiming for niche market dominance with outlandish returns
  - jensensbutton 5y ago
    Because that's not what VCs want.
  - danudey 5y ago
    Option 3 is to become very profitable and then have Facebook create its own competitor and integrate it into their own apps, killing your business overnight.
Aunche 5y ago
There isn't any other way to make money from something like a gif hosting platform. Plenty of new companies get started all the same without being acquired.
parasense 5y ago
It's not ironic at all, nor is it very persuasive. It's pretty well established truism by now that start-ups are a business model where the founders and angel investors become wealthy once the business sells. It would be interesting to see the breakdown of how many start-ups sellout, continue as an independent entity, or completely fail. Regardless, just because Facebook recognizes the business culture in the SF Bay area is not a persuasive argument for why they should be broken up.
- notahacker 5y ago
  > It's pretty well established truism by now that start-ups are a business model where the founders and angel investors become wealthy once the business sells. It's a pretty well established truism that startups in most markets would have absolutely no difficulty at all in selling their business via many different exit routes if one particular player wasn't able to go through with an acquisition for any reason. If it was too early to go public the could sell to Instagram Inc or WhatsApp PLC, or a private equity firm that wants to get into a sector where many, many firms have become stable and profitable. Facebook's statement that if they're not allowed to buy, entrepreneurs [in their market] won't be able to sell [to anyone else] is a truism specific to the social media market Facebook dominates, and a direct consequence of it having the sort of monopoly power that gets them scrutinised by the Competition Commission.
danudey 5y ago
Too many people are trying to create a startup with short-term success in order to get acquired. Get that $500m acquisition in the bag and then retire. Boom, done.

paulcole 5y ago

I think that's the only way for a gif hosting/copyright infringing platform to succeed. https://medium.com/@pasql/giphy-is-stealing-from-artists-689177b20c08 https://medium.com/@pasql/giphy-is-stealing-from-artists-689... Other companies that exchange money for goods and services might have better luck.

Spivak 5y ago

Or ya know, that startups talk about having an exit that's either getting bought by someone or an IPO. Nobody in the startup world seems terribly interested in building a lifestyle business.

dd36 5y ago
The media only talk about companies with investors. Investors want exits. Investors influence the media to talk about companies they’re invested in.
- jimnotgym 5y ago
  Or the intermediary making money out of the investors want exits, and only get paid when a deal moves through. For many investors they need neither exits, dividends or anything other than capital growth.
  - dd36 5y ago
    The intermediary is effectively invested, right? If you mean like a banker. IME, investors want a way to get their cash out. A private but successful lifestyle business isn’t going to get publicity.
willcipriano 5y ago
Back in my day, businesses that made income by selling goods or services to customers were just called businesses, not lifestyle businesses.
- BrianOnHN 5y ago
  Another crazy old idea: Businesses that prioritize people over capital.
  - lotsofpulp 5y ago
    Or governments take care of people, businesses focus on selling products and services.
    - actually_a_dog 5y ago
      Or, maybe.... just maybe... both businesses and governments consider and prioritize the humans in the equation.
      - deleted 5y ago
        [deleted]
      - Pxtl 5y ago
        Businesses that don't prioritize winning in the market will be outperformed by businesses that do. Let the government do the job of setting the boundaries on the market so they can do what's best for humans, and let businesses do the job of optimizing for victory within the market. That's where their respective incentives lie, so that's what they do best at. tl:dr; don't hate the player, hate the game.
        deleted 5y ago
        [deleted]
        actually_a_dog 5y ago
        Ok. That's what your economics textbook thinks. What do you think? Competition is not the only way to get things done. Humans are definitely capable of collective action. You may recall a few weeks ago where hundreds of millions of Americans just said "fuck 2 AM, it's now 1 AM" early one Sunday. How would you harness that?
deleted 5y ago
[deleted]
CivBase 5y ago
Yeah, that's one thing that's always bugged me about startups and VC. There seems to be general agreement that two big problems we're facing in the economy are 1) a slow consolidation of businesses into a handful of mega-corps which span across many markets and 2) an obsession with short-term gains to appease investors and shareholders. Yet the startup world seems to be fixated on "exit strategies" which perpetuate those two problems.
- Spivak 5y ago
  Because founders and early stock-holding employees want to get paid out, move on to something else, and let someone else handle the long-tail maintenance of the business. This is valuable work in the economy because you want people who are good at starting businesses, proving markets, getting investors, yada yada to be doing that and people who are good at running businesses to do that once it has roots. The intractable problem is that corporations with loads of capital are the ones equipped to run businesses long-term. I would love a world where an exit is turning the business over to the employees and a newly hired CEO in exchange for a payout from the business itself but massive corporations will pay more, have cash on hand, and won't default.
  - XMPPwocky 5y ago
    "This is valuable work in the economy because you want [...trimmed...] people who are good at running businesses to do that once it has roots." In my experience, things tend to get dramatically worse for users when a business is acquired or sold, not better. Long-term sustainability also seems to be significantly decreased by acquisitions, not increased- even when the business isn't closed outright (e.g. Pebble). And, from your second paragraph, it seems like you recognize this too. So, yeah, you might want people who are good at running businesses to do that - but selling a business does not seem to put people who are good at running businesses in charge of it. If anything, it's the opposite.
notahacker 5y ago
There are markets where one potential acquirer being unable to do so doesn't completely scupper your chances of any exit though. If the antitrust regulators came down on Microsoft again, I don't think we'd see their lawyers argue that there's no other route for B2B software vendors to cash out except to sell to them.
mikepurvis 5y ago
Isn't there a selection bias going on here? The only entrepreneurs allowed in the club who don't fit the go-for-broke mold are those who make it there by being celebrities in other ways (thinking Fried/DHH or someone like Maciej Cegłowski).

frankfrankfrank 5y ago

Not to sound too obvious, but that is precisely the current state that is also ever increasing. As with seemingly most things, we are witnessing a reemergence of a system similar to what existed before the American Revolution, the feudalistic, aristocratic, monarchical system where you must show fealty to your vassal lord corporation. Even the subject supposed effort to prevent monopolization is not understanding the underlying issue, that competition (a form of freedom) has for all intents and purposes been totally subverted because rather than monopolizing an industry or sector, today's monopolists/cartels realized they should just totally supplant the whole market so people have no choice but to kiss their royal ring. That is something that has effectively been accomplished and society may just have not understood yet what's going on, or likely those who would be expected to ward this off were also totally compromised and corrupted ($$$). What we need is reinstatement of conditions that lead to are allow competition. That may take on several different forms, e.g., (not to pick on Apple, but to use a recent example) that Apple must provide the same access to core integration (based on reasonable technical specifications anyone can meet) that AirTags utilize to competitors like Tile, including the whole apple device network (AirTags are real reason that SARS-CoV-2 "contact tracing" was snuck in to save us all, btw). Another example; Apple and Google, may not block or ban any user or any app that meets its general and public technical specifications and are not a violation of law and human rights like free expression, whether out vassal lord corporations like what users have to say or if an app is a competitor or does something they don't like or not. The alternative should simply be that Apple and Google can just build their own internet if they wish to violate people's rights on the public internet and communications … at the very least.

random314 5y ago
> As with seemingly most things, we are witnessing a reemergence of a system similar to what existed before the American Revolution, the feudalistic, aristocratic, monarchical system where you must show fealty to your vassal lord corporation. This is not something new, but has always been the case. Capitalism is the 2nd iteration of feudalism. When the French revolution threw feudalism into jeopardy, the feudal lords - conservatives who sat in the right wing of the French parliament- hoped capitalism would rescue feudalism and help maintain social hierarchies. Democracy is seen as anti feudal and anti capitalist in its genesis, by giving everyone one vote independent of wealth. Earliest proposals for elections were only for Male land owners. The founding fathers were capitalists for the most part.

asdfman123 5y ago

Yeah, now that you say it it does seem to be very close to "plata o plomo." (Translating as literally "silver or lead": take this money or take a bullet)

viro 5y ago

This is how the entire VC market works either get bought or IPO.

londons_explore 5y ago
Option 3 is to become very profitable and give big dividends back to those VC's... Few take that route though...
- swiftcoder 5y ago
  I think you'll find that VCs aren't in it for dividends. If they were content with 10% per annum they'd play the S&P 500... You can certainly build a long-term profitable business, but you wont find VC funding for that.
  - londons_explore 5y ago
    But some businesses that take VC funding could pay out 1000% dividends every year, especially businesses that don't take much initial funding and manage to become a monopoly in some small niche market and decide not to expand further.
    - swiftcoder 5y ago
      It's certainly possible in niche cases, but if you tell a VC that is your plan, I thin you are likely to find a luke-warm response. Aiming at an acquisition is in many ways a surer bet that aiming for niche market dominance with outlandish returns
- jensensbutton 5y ago
  Because that's not what VCs want.
- danudey 5y ago
  Option 3 is to become very profitable and then have Facebook create its own competitor and integrate it into their own apps, killing your business overnight.

Aunche 5y ago

There isn't any other way to make money from something like a gif hosting platform. Plenty of new companies get started all the same without being acquired.

parasense 5y ago

It's not ironic at all, nor is it very persuasive. It's pretty well established truism by now that start-ups are a business model where the founders and angel investors become wealthy once the business sells. It would be interesting to see the breakdown of how many start-ups sellout, continue as an independent entity, or completely fail. Regardless, just because Facebook recognizes the business culture in the SF Bay area is not a persuasive argument for why they should be broken up.

notahacker 5y ago
> It's pretty well established truism by now that start-ups are a business model where the founders and angel investors become wealthy once the business sells. It's a pretty well established truism that startups in most markets would have absolutely no difficulty at all in selling their business via many different exit routes if one particular player wasn't able to go through with an acquisition for any reason. If it was too early to go public the could sell to Instagram Inc or WhatsApp PLC, or a private equity firm that wants to get into a sector where many, many firms have become stable and profitable. Facebook's statement that if they're not allowed to buy, entrepreneurs [in their market] won't be able to sell [to anyone else] is a truism specific to the social media market Facebook dominates, and a direct consequence of it having the sort of monopoly power that gets them scrutinised by the Competition Commission.

danudey 5y ago

Too many people are trying to create a startup with short-term success in order to get acquired. Get that $500m acquisition in the bag and then retire. Boom, done.