8 ms·

Can’t raise a Series A? Just sell yourself to Yahoo

66 points by dmor 13y ago

coolsunglasses 13y ago
I'm not bullish on Yahoo's movements of late, but people are getting catty. Who is this article meant to help? Yahoo investors that aren't aware of how SV works? The whole article reeks of jealousy and hatefulness. Good to see that our industry merits TMZ-esque content, albeit not to the same circus-esque depths.
ryanglasgow 13y ago
Another PandoDaily article criticizing the startup ecosystem. The author needs to realize not every startup will become the next Facebook, and social products that only achieve moderate success cannot turn a profit through third-party advertising networks. The only possible exit for such startups is a small exit and join a larger tech firm that can take both the ideas learned and the talent and incorporate them into their larger goal. These startups likely had high ambitions, but when growth peaked, they exited while they still had a chance.
rafaelc 13y ago
Sadly, this is the kind of stuff that people will talk about. But it's factually incorrect in many places. As for "VC's playing defense" and being afraid to back consumer startups, that's a broad mischaracterization. George and I backed two Series A companies this month and we're looking for more - heck, our whole team has plenty of capital. For backing great companies, no great firms are sitting back - it's competitive in consumer and in enterprise. If anything, VC's are playing offense.
- bradhe 13y ago
  This describes what I'm seeing as well. If you've got a good team with a good product and a good chance of becoming a business, it doesn't seem to be any more difficult than normal to find the appropriate level of financing.
  - rafaelc 13y ago
    I'll write a post about this next week. Basically - we dream with founders. From our perspective, there are always 30 reasons to say no. But if there is a truly compelling reason to say yes, on a path to a large company, we're in.
- snaky 13y ago
  Maybe that's too broad, but doesn't the trend exist? Why did it happen?
ryanlchan 13y ago
This is a masterpiece of a backhanded compliment. Never have I seen such elegant transitions between briefly masked contempt and half-hearted admiration. It's really stunning. I think analyzing these acquisitions from a raw dollars-to-dollars perspective is a mistake. When doing a turnaround with a company so fundamentally troubled as Yahoo, you need more than just a few patch-in acquisitions, so that's clearly not what they are about. These moves are part of a long term investment in motivating employees, building relationships with the valley, and regaining footing in the markets that they can win.
adastra 13y ago
If only someone had predicted this exact possibility 3 years ago... "[2] In theory you could beat the death spiral by buying good programmers instead of hiring them. You can get programmers who would never have come to you as employees by buying their startups. But so far the only companies smart enough to do this are companies smart enough not to need to." -Paul Graham, What Happened to Yahoo http://paulgraham.com/yahoo.html http://paulgraham.com/yahoo.html Edit: giving this another 30 seconds thought, it wouldn't surprise me at all if a friend of Mayer's sent her PG's essay when she first agreed to take the job. If she hadn't realized it already, she almost certainly would have seen this strategy as the correct one (use Yahoo's war chest to get more A-players into the company through acquisitions), and she's been executing on it ever since.
- bharathwaaj 13y ago
  True!
- georgemcbay 13y ago
  "Buying" "A-Players" is only part of the battle though, you also have to motivate them to do more than coast until the golden handcuffs are off. Hopefully Yahoo is already working towards some big things that these people being acquired are excited to be part of, otherwise this will just be a very costly temporary solution.
  - notaddicted 13y ago
    What surprised me the most from Paul Graham's Yahoo article was he was "sitting in my cubicle". I don't see how you could make someone a millionaire, and then put them in a cubicle, and expect them to stick around.
    - nugget 13y ago
      As someone who has been in this situation more than once, a cubicle versus a desk versus an office is not the issue - the issue is, can you motivate people with work they are passionate about and an incentive/compensation plan they feel is fair. Once you have those pieces in place, the work environment usually doesn't matter as much (and to the extent it does, the newly motivated employees will take steps to fix it on their own).
orangethirty 13y ago
I'd rather be acquired by Yahoo than by Google or MS. They are the underdogs.
mindcrime 13y ago
Dear Marissa: The next logical step for Yahoo! is to move into the enterprise. I know a great startup you could acquire that would accelerate your move into that space. I expect it could be had for a very reasonable price. Call me. Mindcrime
- orangethirty 13y ago
  I also know of a nice search engine that will allow you to take over search and advertising. Buy it now and also get an online programming school. But wait, there's more! Mention code HN and I will double the offer. That is two search engines, two online programming schools. All for the price of a cool 5 million buckaroos.
hoi 13y ago
Seems like a logical move. Since there is supposedly a dearth of A* developers at Yahoo, since it appears many left in the previous years. This has made it a less desirable place for great developers to work for. To change this image and negative spiral, acquire good development teams. The products are secondary. Yahoo becomes a more attractive place to work again. Looks like its the early stage of rebuilding the team, before kicking it on to develop products into growth mode.
ianstallings 13y ago
This article reads like a crazy person wrote it. I'm not crazy. YES I AM. Seriously. Are they in favor or against? I'm confused.
- dmor 13y ago
  I don't think journalists are supposed to have an opinion. Plus their investors require they write everything in code on PandoDaily
- eringriffith 13y ago
  Is there something wrong with laying out the pros and cons and letting you draw your own conclusion?
rdl 13y ago
The key for Yahoo would be using those acquihires well. 1) Assume these people still want to do startups. Make sure there are concrete things they can achieve in 1-2 years; you probably have no chance of retaining most of them for 4 years, or longer. 2) Revolving door (like Cisco has) is probably worthwhile to establish. As long as you're buying at decent prices, there's nothing wrong with this. Buying someone 2-3 times in a decade is still a win. 3) Optimize for reducing the negatives of joining Yahoo. Yahoo used to split up productive teams; maybe let people remain as startup teams but then put them on existing products/lines of business, rather than splitting up great teams. I think this would make Yahoo more attractive (and maybe reduce the premium Yahoo has to offer over Facebook/Google for the more competitive acquihire deals)
johnrob 13y ago
I smell a turnover strategy here: 1) Buy talent in the form of companies while they are still cheap because of both the startup glut and the booming stock market (and thus yahoo stock price). 2) When the inevitable downturn/crash happens, seize the moment to clean house. Many other companies will doing the same so it won't be particularly newsworthy. 3) The alternatives for the remaining employees will be much more grim at this point, so they'll get to keep most of them for a good number of years in order to build something revolutionary.
drorweiss 13y ago
Interesting strategy to reinvent Yahoo! Perhaps MM does not believe in the ability of Yahoo's existing human capital to make the change. But is it enough, to "buy" (supposedly) good people and bring them on-board? What about the big vision? More generally, I'm not even sure if there's still room for a content company in the magnitude of Yahoo.

66 points by dmor 13y ago

I'm not bullish on Yahoo's movements of late, but people are getting catty. Who is this article meant to help? Yahoo investors that aren't aware of how SV works? The whole article reeks of jealousy and hatefulness. Good to see that our industry merits TMZ-esque content, albeit not to the same circus-esque depths.

ryanglasgow 13y ago

Another PandoDaily article criticizing the startup ecosystem. The author needs to realize not every startup will become the next Facebook, and social products that only achieve moderate success cannot turn a profit through third-party advertising networks. The only possible exit for such startups is a small exit and join a larger tech firm that can take both the ideas learned and the talent and incorporate them into their larger goal. These startups likely had high ambitions, but when growth peaked, they exited while they still had a chance.

rafaelc 13y ago

Sadly, this is the kind of stuff that people will talk about. But it's factually incorrect in many places. As for "VC's playing defense" and being afraid to back consumer startups, that's a broad mischaracterization. George and I backed two Series A companies this month and we're looking for more - heck, our whole team has plenty of capital. For backing great companies, no great firms are sitting back - it's competitive in consumer and in enterprise. If anything, VC's are playing offense.

bradhe 13y ago
This describes what I'm seeing as well. If you've got a good team with a good product and a good chance of becoming a business, it doesn't seem to be any more difficult than normal to find the appropriate level of financing.
- rafaelc 13y ago
  I'll write a post about this next week. Basically - we dream with founders. From our perspective, there are always 30 reasons to say no. But if there is a truly compelling reason to say yes, on a path to a large company, we're in.
snaky 13y ago
Maybe that's too broad, but doesn't the trend exist? Why did it happen?

ryanlchan 13y ago

This is a masterpiece of a backhanded compliment. Never have I seen such elegant transitions between briefly masked contempt and half-hearted admiration. It's really stunning. I think analyzing these acquisitions from a raw dollars-to-dollars perspective is a mistake. When doing a turnaround with a company so fundamentally troubled as Yahoo, you need more than just a few patch-in acquisitions, so that's clearly not what they are about. These moves are part of a long term investment in motivating employees, building relationships with the valley, and regaining footing in the markets that they can win.

adastra 13y ago

If only someone had predicted this exact possibility 3 years ago... "[2] In theory you could beat the death spiral by buying good programmers instead of hiring them. You can get programmers who would never have come to you as employees by buying their startups. But so far the only companies smart enough to do this are companies smart enough not to need to." -Paul Graham, What Happened to Yahoo http://paulgraham.com/yahoo.html http://paulgraham.com/yahoo.html Edit: giving this another 30 seconds thought, it wouldn't surprise me at all if a friend of Mayer's sent her PG's essay when she first agreed to take the job. If she hadn't realized it already, she almost certainly would have seen this strategy as the correct one (use Yahoo's war chest to get more A-players into the company through acquisitions), and she's been executing on it ever since.

bharathwaaj 13y ago
True!
georgemcbay 13y ago
"Buying" "A-Players" is only part of the battle though, you also have to motivate them to do more than coast until the golden handcuffs are off. Hopefully Yahoo is already working towards some big things that these people being acquired are excited to be part of, otherwise this will just be a very costly temporary solution.
- notaddicted 13y ago
  What surprised me the most from Paul Graham's Yahoo article was he was "sitting in my cubicle". I don't see how you could make someone a millionaire, and then put them in a cubicle, and expect them to stick around.
  - nugget 13y ago
    As someone who has been in this situation more than once, a cubicle versus a desk versus an office is not the issue - the issue is, can you motivate people with work they are passionate about and an incentive/compensation plan they feel is fair. Once you have those pieces in place, the work environment usually doesn't matter as much (and to the extent it does, the newly motivated employees will take steps to fix it on their own).

orangethirty 13y ago

I'd rather be acquired by Yahoo than by Google or MS. They are the underdogs.

mindcrime 13y ago

Dear Marissa: The next logical step for Yahoo! is to move into the enterprise. I know a great startup you could acquire that would accelerate your move into that space. I expect it could be had for a very reasonable price. Call me. Mindcrime

orangethirty 13y ago
I also know of a nice search engine that will allow you to take over search and advertising. Buy it now and also get an online programming school. But wait, there's more! Mention code HN and I will double the offer. That is two search engines, two online programming schools. All for the price of a cool 5 million buckaroos.

hoi 13y ago

Seems like a logical move. Since there is supposedly a dearth of A* developers at Yahoo, since it appears many left in the previous years. This has made it a less desirable place for great developers to work for. To change this image and negative spiral, acquire good development teams. The products are secondary. Yahoo becomes a more attractive place to work again. Looks like its the early stage of rebuilding the team, before kicking it on to develop products into growth mode.

ianstallings 13y ago

This article reads like a crazy person wrote it. I'm not crazy. YES I AM. Seriously. Are they in favor or against? I'm confused.

dmor 13y ago
I don't think journalists are supposed to have an opinion. Plus their investors require they write everything in code on PandoDaily
eringriffith 13y ago
Is there something wrong with laying out the pros and cons and letting you draw your own conclusion?

rdl 13y ago

The key for Yahoo would be using those acquihires well. 1) Assume these people still want to do startups. Make sure there are concrete things they can achieve in 1-2 years; you probably have no chance of retaining most of them for 4 years, or longer. 2) Revolving door (like Cisco has) is probably worthwhile to establish. As long as you're buying at decent prices, there's nothing wrong with this. Buying someone 2-3 times in a decade is still a win. 3) Optimize for reducing the negatives of joining Yahoo. Yahoo used to split up productive teams; maybe let people remain as startup teams but then put them on existing products/lines of business, rather than splitting up great teams. I think this would make Yahoo more attractive (and maybe reduce the premium Yahoo has to offer over Facebook/Google for the more competitive acquihire deals)

johnrob 13y ago

I smell a turnover strategy here: 1) Buy talent in the form of companies while they are still cheap because of both the startup glut and the booming stock market (and thus yahoo stock price). 2) When the inevitable downturn/crash happens, seize the moment to clean house. Many other companies will doing the same so it won't be particularly newsworthy. 3) The alternatives for the remaining employees will be much more grim at this point, so they'll get to keep most of them for a good number of years in order to build something revolutionary.

drorweiss 13y ago

Interesting strategy to reinvent Yahoo! Perhaps MM does not believe in the ability of Yahoo's existing human capital to make the change. But is it enough, to "buy" (supposedly) good people and bring them on-board? What about the big vision? More generally, I'm not even sure if there's still room for a content company in the magnitude of Yahoo.