4 ms·

I just don't understand the logic behind aqui-hires. If a founder starts up his own company, and if he is very serious about it, he will put in everything he's

by neya 13y ago

I just don't understand the logic behind aqui-hires. If a founder starts up his own company, and if he is very serious about it, he will put in everything he's got - his passion, his vision and his hardwork. It becomes an integral part of his life somehow. Now, suddenly a corporation pays the founder a large sum of money, makes him shut down his company, literally erasing every single connection he had with his creation. Now, no passionate founder would like to let someone destroy his own company, his hardwork and passion. But even if he wanted the money, and he thought if it's a good compromise, no passionate founder will think nor share the same vision and passion for the corporate owning him as much as he had for his own company. Obviously most of us startup because we don't want the corporate life and we want something different. So, to aim to get into a corporate by means of a startup is quite contradictory, no? So, in essence, how does the corporation justify the investment for a semi-passionate founder whose product has just been destroyed? They pay billions in some cases, only to realize that the founder doesn't share his old vision and enthusiasm anymore? How does this work? I will gladly love to be corrected on this one. Someone with experience, please explain this cost justification to me! Cheers.

patrickyeon 13y ago
The acquiring company gets the entire staff (or at least everyone who comes along). Assuming the company being acquired has built up a decent product, you can see the acqui-hire as a recruiting move, where you're hiring on a group that has shown they can work together, ship product, and all the members have already been vetted by somebody else. The purchase price is really just a recruiter's fee and hiring bonus bundled together.
- smsm42 13y ago
  And that hate their bosses' guts for ruining the thing they just spent a chunk of their lives to do and were proud of, and now it's all turned to nothing. But since they need money and they're offered too good a deal to refuse, they swallow it and get in line. I'm not sure it' the best way to acquire talent. Of course, that implies people cared about the thing they did, but isn't that the kind of people you want to get?
  - cs02rm0 13y ago
    I've certainly seen in the past the founder give it a year or two, leave, take anyone worth taking with them and then start over doing the same thing again. Successfully too.
    - smsm42 13y ago
      Well, there's one thing when the gig runs over and people look for another thing to work on. But the parent post talked about recruiting the whole team, and as it often happens, just in the middle of successful and growing project - that's the principle of acqui-hire, find somebody who is currently successful and hire them out. If it's just a team looking for a next thing after previous one run out of steam, there's no "acqui" part here since there's nothing to acquire of value, it's just a regular hire.
- namenotrequired 13y ago
  That's why it makes sense for the acquirer to buy. Neya was questioning why it made sense for the founder to sell.
  - peloton 13y ago
    Founders in this position usually sell because they can't raise any more money and the next best option is to shut down the company because they're out of money. With an acqui-hire, at least you find a soft landing spot for some of your employees and your investors can tell a nicer story about one of their investments getting acquired (instead of getting shut down).
- neya 13y ago
  Thank you! That was insightful. Cheers.
deleted 13y ago
[deleted]
Sagat 13y ago
I doubt all (or even most) founders are passionate visionaries. If the product in question was a life changing invention, then yes, I am sure the founders would be more than happy to have their whole existence and sense of identity revolve around it. Here we are talking about a URL shortener that made revenue from ads: hardly an original or inspiring project. The guy's stated goal is "to help social media influencers and publishers better monetize their online content." Not exactly dream material here. Let's be honest here, being bought for a substantial sum and maybe getting a job was exactly what the founder was looking for.
- notahacker 13y ago
  In a way, though, aren't people whose idea is to get acquired for a substantial sum of money even worse targets for an acqui-hire? At least with passionate visionaries whose current idea is unprofitable, you're presumably buying them with the idea that their rare interest in X can be redirected to offering unique insights into a somewhat-related project your internal team is working on, and the hope they'll be so enthused with that they stay beyond their earnout period. Otherwise, you're just overpaying for commodity engineering talent, and it's engineering talent that prefers startup environments that you're overpaying for.
- bosky101 13y ago
  (momentumOfStartup > momentumOfAcquirer) ? "acquire" : (passionOfAcquirer > passionOfStartup) ? "acqhire" : (moneyInTheBank || scalableRevenue) ? "ship" : "pivot";
wtracy 13y ago
In this case, it sounds like the product may have been circling the drain anyway. If so, the founder just saved everyone from unemployment and got them a fat hiring bonus to boot.
camus 13y ago
There is no real strategic buying here, i mean , why buy an url shortener in 2013? or Summly? or even Tumblr (which was not in a good shape).One cant buy relevancy. What i see are massive layoffs at yahoo in 1 year. and the CIO out in 2 years... Mayer did not answer yahoo's identity crisis. Yahoo mail cant still provide basic features (like using a 3rd party client for free) yet they think they are still relevant? As for "passionate founders" , some are just serial entrepreneurs hoping their project du jour will be VCed, no passion here.
girvo 13y ago
> Obviously most of us startup because we don't want the corporate life and we want something different. I'm really not sure how solid that assumption is, to be honest! Sure, a lot of founders are super passionate... But others seem to enjoy the thrill, or like autonomy, and some even are just in it for the (admittedly somewhat irrational) expectation of a serious pay day. So, not necessarily a contradiction depending on the founder!
- namenotrequired 13y ago
  > others seem to enjoy the thrill, or like autonomy Which is exactly what you don't get in corporate life.
  - girvo 13y ago
    I have. *shrugs
    - namenotrequired 13y ago
      That's lucky! I think most people who need this thrill and autonomy have mainly bad experiences from working in corporations.
lotsofcows 13y ago
Your passion can turn into your job remarkably quickly. After a couple of years we ended up with a year long contract all neatly laid out which meant, a) there was no longer the fear of money running out and b) after a month all the exciting stuff was a distant dream. You find yourself thinking about the next thing. If someone came along and offered you a decent amount of money to finish what you were doing and then leave, would you take it?
TomGullen 13y ago
Capitalism! Hooray!

by neya 13y ago

patrickyeon 13y ago

The acquiring company gets the entire staff (or at least everyone who comes along). Assuming the company being acquired has built up a decent product, you can see the acqui-hire as a recruiting move, where you're hiring on a group that has shown they can work together, ship product, and all the members have already been vetted by somebody else. The purchase price is really just a recruiter's fee and hiring bonus bundled together.

smsm42 13y ago
And that hate their bosses' guts for ruining the thing they just spent a chunk of their lives to do and were proud of, and now it's all turned to nothing. But since they need money and they're offered too good a deal to refuse, they swallow it and get in line. I'm not sure it' the best way to acquire talent. Of course, that implies people cared about the thing they did, but isn't that the kind of people you want to get?
- cs02rm0 13y ago
  I've certainly seen in the past the founder give it a year or two, leave, take anyone worth taking with them and then start over doing the same thing again. Successfully too.
  - smsm42 13y ago
    Well, there's one thing when the gig runs over and people look for another thing to work on. But the parent post talked about recruiting the whole team, and as it often happens, just in the middle of successful and growing project - that's the principle of acqui-hire, find somebody who is currently successful and hire them out. If it's just a team looking for a next thing after previous one run out of steam, there's no "acqui" part here since there's nothing to acquire of value, it's just a regular hire.
namenotrequired 13y ago
That's why it makes sense for the acquirer to buy. Neya was questioning why it made sense for the founder to sell.
- peloton 13y ago
  Founders in this position usually sell because they can't raise any more money and the next best option is to shut down the company because they're out of money. With an acqui-hire, at least you find a soft landing spot for some of your employees and your investors can tell a nicer story about one of their investments getting acquired (instead of getting shut down).
neya 13y ago
Thank you! That was insightful. Cheers.

deleted 13y ago

[deleted]

Sagat 13y ago

I doubt all (or even most) founders are passionate visionaries. If the product in question was a life changing invention, then yes, I am sure the founders would be more than happy to have their whole existence and sense of identity revolve around it. Here we are talking about a URL shortener that made revenue from ads: hardly an original or inspiring project. The guy's stated goal is "to help social media influencers and publishers better monetize their online content." Not exactly dream material here. Let's be honest here, being bought for a substantial sum and maybe getting a job was exactly what the founder was looking for.

notahacker 13y ago
In a way, though, aren't people whose idea is to get acquired for a substantial sum of money even worse targets for an acqui-hire? At least with passionate visionaries whose current idea is unprofitable, you're presumably buying them with the idea that their rare interest in X can be redirected to offering unique insights into a somewhat-related project your internal team is working on, and the hope they'll be so enthused with that they stay beyond their earnout period. Otherwise, you're just overpaying for commodity engineering talent, and it's engineering talent that prefers startup environments that you're overpaying for.
bosky101 13y ago
(momentumOfStartup > momentumOfAcquirer) ? "acquire" : (passionOfAcquirer > passionOfStartup) ? "acqhire" : (moneyInTheBank || scalableRevenue) ? "ship" : "pivot";

wtracy 13y ago

In this case, it sounds like the product may have been circling the drain anyway. If so, the founder just saved everyone from unemployment and got them a fat hiring bonus to boot.

camus 13y ago

There is no real strategic buying here, i mean , why buy an url shortener in 2013? or Summly? or even Tumblr (which was not in a good shape).One cant buy relevancy. What i see are massive layoffs at yahoo in 1 year. and the CIO out in 2 years... Mayer did not answer yahoo's identity crisis. Yahoo mail cant still provide basic features (like using a 3rd party client for free) yet they think they are still relevant? As for "passionate founders" , some are just serial entrepreneurs hoping their project du jour will be VCed, no passion here.

girvo 13y ago

> Obviously most of us startup because we don't want the corporate life and we want something different. I'm really not sure how solid that assumption is, to be honest! Sure, a lot of founders are super passionate... But others seem to enjoy the thrill, or like autonomy, and some even are just in it for the (admittedly somewhat irrational) expectation of a serious pay day. So, not necessarily a contradiction depending on the founder!

namenotrequired 13y ago
> others seem to enjoy the thrill, or like autonomy Which is exactly what you don't get in corporate life.
- girvo 13y ago
  I have. *shrugs
  - namenotrequired 13y ago
    That's lucky! I think most people who need this thrill and autonomy have mainly bad experiences from working in corporations.

lotsofcows 13y ago

Your passion can turn into your job remarkably quickly. After a couple of years we ended up with a year long contract all neatly laid out which meant, a) there was no longer the fear of money running out and b) after a month all the exciting stuff was a distant dream. You find yourself thinking about the next thing. If someone came along and offered you a decent amount of money to finish what you were doing and then leave, would you take it?

TomGullen 13y ago

Capitalism! Hooray!