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Hi Chuck, I agree that inside any company, purchases are rationalized and the process you describe is probably spot on. The reason I posted was that I've seen

Hi Chuck, I agree that inside any company, purchases are rationalized and the process you describe is probably spot on. The reason I posted was that I've seen several cases where acquisition behavior in multiple industries was profoundly illogical in terms of what the same money would buy: either companies didn't pull the trigger on offers when they should have and a product would have been ridiculously cheap, or (more often with unprofitable companies) a sale was engineered by investors, and/or the purchasers did not explore the market and only considered narrow options before them. Not intended as a complaint. I just really wouldn't advise anyone to do a startup that required any BigCorp to purchase them in order to have a successful exit, that's all. You could have a way to print people money and still have a hard time forcing it down their throat.

ChuckMcM 14y ago
I think we're in agreement, I think anyone who creates a start-up with the intent to sell it to a larger corporation is making a sucker bet. Worse their company generally suffers as they pivot from fad to fad once they get somewhat long in the tooth and the chance of acquisition becomes more and more remote. But just because you and I see that, doesn't mean some starry eyed CEO wannabe won't. They use the fact that Apple, Facebook, Google and even Microsoft have billions in their bank accounts and have stated a desire to acquire "key technologies" as validation of their own efforts to be a "key technology." Most people learn in High School (or at worst College) that trying to be something you aren't in order to win friends is a losing bet. The only thing I disagree with is characterizing BigCorp as strictly irrational. It makes sense to someone, and generally if you find them they can reason to their choice which is the very definition of rational behavior.

ChuckMcM 14y ago

I think we're in agreement, I think anyone who creates a start-up with the intent to sell it to a larger corporation is making a sucker bet. Worse their company generally suffers as they pivot from fad to fad once they get somewhat long in the tooth and the chance of acquisition becomes more and more remote. But just because you and I see that, doesn't mean some starry eyed CEO wannabe won't. They use the fact that Apple, Facebook, Google and even Microsoft have billions in their bank accounts and have stated a desire to acquire "key technologies" as validation of their own efforts to be a "key technology." Most people learn in High School (or at worst College) that trying to be something you aren't in order to win friends is a losing bet. The only thing I disagree with is characterizing BigCorp as strictly irrational. It makes sense to someone, and generally if you find them they can reason to their choice which is the very definition of rational behavior.