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Aquihire is a failure mode. Company builds a good team, but the product can't get enough traction to be sold on its own merits. ${BIGCORP) swoops in and buys ou

by beat 14y ago

Aquihire is a failure mode. Company builds a good team, but the product can't get enough traction to be sold on its own merits. ${BIGCORP) swoops in and buys out the company for a LOT less than it would be worth with a successful product, ditches the product and handcuffs the team. It's a less awful ending for a startup than going bankrupt and folding the company, but it's not an actual business plan! Sheesh, if I'm pouring a few years of my life into creating a product, I hope it's more than an elaborate flirtation to get hired at Google with a signing bonus!

seiji 14y ago
It's both a failure mode and a safety switch. The safety switch is like the old game of "Would you rather have $100 now or a 5% chance of $1000 in four years?" The failure mode is the truth of public markets are absolutely closed to new entrants unless you are selling a mass market physical product or if you have over 500 million monthly users on some web service. Given the diminishing marginal utility of cash, a few million dollars RFN is tastier than a few billion dollars when you are $age+7 years old. We can always try again later, right? I'm pouring a few years of my life into creating a product That's a great point too. A lot of people get very endeared to their products and companies. Their companies are them. Other people make companies only as vehicles to flip and cash out. It's up to you. They aren't compatible viewpoints though. The company-is-part-of-me people see the make-it-then-flip-it contingency equivalent to people who only have babies to extract government benefit checks.
michaelochurch 14y ago
Acqui-hire means: (1) $3-6 million per engineer, with investors, founders, and executives getting most of that money. Most of these don't get rich in the VC-istan sense, but they get enough money to buy a house. Founders join Those Who Have Completed An Exit and are now seen as real human beings by VCs. (2) engineers get hired as contractors, which is a 12-month interview process with better results than the front-door process (75%, as opposed to 45% with a real introduction and sub-1% on a job site) and might make back the ~$50k they lost by working below market salary. Acqui-hire is bad but it's not quite a failure. It means the founders get paid, and the engineers get about the same payoff as they would have had in a corporate job. (Whether it's good or bad for them comes down to the assimilation process; it's usually somewhat negative.) It does, however, mean that the engineers get screwed relative to the startup promise (of being an executive, or rich, or able to do the most interesting engineering work, some day).
- beat 14y ago
  Don't disagree with any of this. Acqui-hire isn't ideal, but it's better than the alternative, which is starting over.

by beat 14y ago

seiji 14y ago

It's both a failure mode and a safety switch. The safety switch is like the old game of "Would you rather have $100 now or a 5% chance of $1000 in four years?" The failure mode is the truth of public markets are absolutely closed to new entrants unless you are selling a mass market physical product or if you have over 500 million monthly users on some web service. Given the diminishing marginal utility of cash, a few million dollars RFN is tastier than a few billion dollars when you are $age+7 years old. We can always try again later, right? I'm pouring a few years of my life into creating a product That's a great point too. A lot of people get very endeared to their products and companies. Their companies are them. Other people make companies only as vehicles to flip and cash out. It's up to you. They aren't compatible viewpoints though. The company-is-part-of-me people see the make-it-then-flip-it contingency equivalent to people who only have babies to extract government benefit checks.

michaelochurch 14y ago

Acqui-hire means: (1) $3-6 million per engineer, with investors, founders, and executives getting most of that money. Most of these don't get rich in the VC-istan sense, but they get enough money to buy a house. Founders join Those Who Have Completed An Exit and are now seen as real human beings by VCs. (2) engineers get hired as contractors, which is a 12-month interview process with better results than the front-door process (75%, as opposed to 45% with a real introduction and sub-1% on a job site) and might make back the ~$50k they lost by working below market salary. Acqui-hire is bad but it's not quite a failure. It means the founders get paid, and the engineers get about the same payoff as they would have had in a corporate job. (Whether it's good or bad for them comes down to the assimilation process; it's usually somewhat negative.) It does, however, mean that the engineers get screwed relative to the startup promise (of being an executive, or rich, or able to do the most interesting engineering work, some day).

beat 14y ago
Don't disagree with any of this. Acqui-hire isn't ideal, but it's better than the alternative, which is starting over.