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Why? Don't you think the transition period would dramatically hurt productivity? What about clashing cultures? M&A usually fails.
by fallentimes 18y ago
Why?
Don't you think the transition period would dramatically hurt productivity? What about clashing cultures? M&A usually fails.
- jwilliams 18y agoM&A usually fails. Yet a lot of YC companies will end up getting acquired.
- staunch 18y agoA big company can accept that some of its acquisitions won't work out well. Small companies aren't as strong.
- jwilliams 18y agoSo what you're saying is that when it works, the reward is enough to offset the failures. Given this, there is no reason startups should avoid merging simply because it "usually fails" (as the post above was suggesting)... In fact, it's a risk in the same league as doing a startup in the first place.
- staunch 18y agoIt's enough to offset the failures for a big company if they're any good at acquisition. For a startup the payoff has to be a heck of a lot more. The odds of the merger going bad are higher (too many chefs) and going bad means a total failure of both companies.
- jwilliams 18y agoI think we're debating at cross-purposes. The original statement was along the lines of - M&A usually fail, so there is no point in doing this for startups. Now, maybe being a startup modifies the M&A rules in some or many ways - but I don't think it precludes M&A as a worthwhile option. A merger in a high risk field might be a tipping factor - might improve your chances or getting a critical mass of users, funding, or some other key factor - so whilst the merger is risky, it modifies the chance of success in some critical way. In the highly competitive field such as online storage, this kind of advantage may well be something worth pursuing -- I'm not 100% convinced in this case, but it does have some interesting implications. So - totally agree - might be risky. Might be risky most of the time... But certainly not worth dismissing.
- fallentimes 18y agoMore like: they usually fail so proceed with caution
- fallentimes 18y agoNot really. The risk & reward don't usually work out right (regardless of size). But business development people love them. You shouldn't always avoid them, you just need to understand the majority fail without the reward to make up for it.
- fallentimes 18y agoTalent acquisitions.
- rokhayakebe 18y agoI am assuming the majority of YC startups are teams of 3-4 and merging would mean teams of 6-8 working together, fixing the same problem-set.