On a recent episode of Dithering, Ben Thompson's claim is this is downstream of an effort to make acquisitions of small companies more difficult, and that this

On a recent episode of Dithering, Ben Thompson's claim is this is downstream of an effort to make acquisitions of small companies more difficult, and that this is worse than the previous regulatory status quo: https://dithering.passport.online/member/episode/techs-chestertons-fence https://dithering.passport.online/member/episode/techs-chest... > Unfortunately, regulators didn’t listen. The effort to indiscriminately throw sand in the gears of the Silicon Valley machine — which, it should be noted, started under the first Trump administration, but was dramatically accelerated under the Biden administration — is undoubtedly the biggest driver of these stinky deals. Big Tech, starting with Microsoft, realized that the easiest way to avoid regulatory annoyance around acquihires was to separate the acquisition from the hiring; what has happened as these deals have evolved is that tech companies increasingly realize that if they are simply hiring and not acquiring then they don’t have to hire everyone. That, however, breaks the implicit social contract that made startup employment significantly less risky for rank-and-file employees. > What is frustrating about this development is that there is a good chance we will never go back. The fact of the matter is that picking-and-choosing who to hire from a failed startup is great for Big Tech: they get the IP they want and the employees that matter, and get to jettison everyone else without having to do a future layoff. That they never thought to do so previously was, in retrospect, downstream of “the way things are done”, not some sort of legal requirement; once the law, in the form of over-eager regulators who didn’t understand what they were regulating, gave them no choice, it’s not at all clear why they would go back to the old model. > This, in the long run, is very bad for startups. The incentives for founding a company do still remain; the founders of all four of the companies in the stinky list are doing very well for themselves. The people who are getting screwed, however, are the folks who were never necessarily going to get rich — that’s reserved for founders, and appropriately so — but who could justify rolling the dice on a positive outcome as long as they had downside protection in the form of guaranteed employment with a Big Tech company if things didn’t work out. Now, however, the best route for any non-founder is simply to pursue employment with a Big Tech company directly; the alternative, if the downside is unemployment or a contract with a hollowed-out doomed company, isn’t worth the risk (which, ultimately, again favors Big Tech, as it lowers competition for rank-and-file employees). > It is, in the end, one of the clearest examples of a Chesterton Fence you can come up with: regulators didn’t understand the role that seamless small acquisitions played in making Silicon Valley work, so they made them undesirable and untenable; the end result is a diminished ecosystem that further entrenches the biggest players, reduces long-term innovation and risk-taking, and destroys individual employees’ opportunity and bargaining power with big companies and their chances of earning a nice payday if things worked out.