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Foremski totally missed the real "dirty little secret" regarding acquisitions. Acquisitions are really about control and ownership: Control of IP, control of c

Foremski totally missed the real "dirty little secret" regarding acquisitions. Acquisitions are really about control and ownership: Control of IP, control of customer relationships, control of planning, ownership of growth potential. It's placing a bet that ownership is strategically beneficial. Sometimes there's a defensive component. "We bought them for their talent" is the cover story. It maintains the secrecy of the real value the acquirer believes it sees. It sounds better too. And we tech folk eat it up. It plays into our egos. But think about it. Technical talent is actually fairly fungible above a certain competency level. You know you or a handful of your friends could build most products you see. It's the decisions about what to build, how to build it, when it got built, and how the market responded that are all bundled up in a company's existence at a point in time. It's this bundle that's being bought. Not talent.

mgkimsal 15y ago
I don't disagree on that IP, but some of that intellectual stuff is still in people's brains. I do think 'talent acquisition' does play to the egos in some cases, but there's also the 'keep the talent' away from competition. Just because people know how it's done doesn't mean you should make it easy for them. Over time almost all this tech stuff gets commoditized (virtualization, search, big data, etc) but in the early stages, having some talent on staff that developed 'big search tech X', and keeping them away from competition, gives you a short term advantage.
ahoyhere 15y ago
Yes. And on top of that, another dirty little secret -- when a startup is the fly buzzing around the ear of the big, established company, and it keeps buzzing and buzzing, the big, established company finds it easier to swat than compete with its own buzzing little irritants. And it's a lot easier to swat a fly after you bought it and locked it down with a vesting agreement. A fly that's running around free might require a chase. Lots of acquisitions are to destroy or at least undermine a competitor, potential competitor, or other disruption. Which is why the chest-thumping "change the world!!" "disrupt!!" "free yourself, you caged lion you!!" rhetoric around startups is so sad. The "logical" result is usually the destruction of the startup itself, and the yoking of the founders to an agreement which forces them to stay at a big company -- the company that destroyed or undermined their baby -- in a JOB (cage) for years to get their payoff. Miserable. Having met quite a lot of startup founders post-sale (on the conf circuit, in speakers' dinners and green rooms), I can say… I have never met one who was thrilled about the money, and mostly they have struck me as tired, sad, and defeated.

mgkimsal 15y ago

I don't disagree on that IP, but some of that intellectual stuff is still in people's brains. I do think 'talent acquisition' does play to the egos in some cases, but there's also the 'keep the talent' away from competition. Just because people know how it's done doesn't mean you should make it easy for them. Over time almost all this tech stuff gets commoditized (virtualization, search, big data, etc) but in the early stages, having some talent on staff that developed 'big search tech X', and keeping them away from competition, gives you a short term advantage.

ahoyhere 15y ago

Yes. And on top of that, another dirty little secret -- when a startup is the fly buzzing around the ear of the big, established company, and it keeps buzzing and buzzing, the big, established company finds it easier to swat than compete with its own buzzing little irritants. And it's a lot easier to swat a fly after you bought it and locked it down with a vesting agreement. A fly that's running around free might require a chase. Lots of acquisitions are to destroy or at least undermine a competitor, potential competitor, or other disruption. Which is why the chest-thumping "change the world!!" "disrupt!!" "free yourself, you caged lion you!!" rhetoric around startups is so sad. The "logical" result is usually the destruction of the startup itself, and the yoking of the founders to an agreement which forces them to stay at a big company -- the company that destroyed or undermined their baby -- in a JOB (cage) for years to get their payoff. Miserable. Having met quite a lot of startup founders post-sale (on the conf circuit, in speakers' dinners and green rooms), I can say… I have never met one who was thrilled about the money, and mostly they have struck me as tired, sad, and defeated.