7 ms·

i like how nobody here talks about the real losers - the picnik user/customers. these exits practically always kill your original product, which is the ultimat

i like how nobody here talks about the real losers - the picnik user/customers. these exits practically always kill your original product, which is the ultimate fuck you to the user base that got you there to begin with. that's why it's amazing to see companies like dropbox, box, etc to stick to their guns (so far) and not throw away everything they worked for. the whole web startup concept seems broken. it's not about real solutions and sustainable businesses, but rather a giant get rich quick scheme. just need some suckers to fall for it.

mikehar 13y ago
This doesn't really apply to Picnik. It was a real and sustainable business. We felt like we could make the product better by joining with Google. Our users were constantly on our mind. Picnik continued to grow dramatically while we were at google. It was closed down at its peak. FWIW we tried to buy Picnik back from Google once we heard that it was going to be shuttered. They wouldn't sell. It was gut wrenching to see Picnik go dark.
- dalanmiller 13y ago
  The hard part is didn't they realize they were taking away one thing and not replacing it with another? That part is the most frustrating of all.
  - tempestn 13y ago
    I'm experiencing exactly this frustration with their acquisition of SageTV now. (Well, the acquisition was a while ago, but the pain is starting now.) MythTV is theoretically an alternative, but requires quite a bit more time investment it seems.
- 27182818284 13y ago
  > It was closed down at its peak. What the heck was the reason behind that? I'm so curious. I know Google likes to headshot different products, but typically aren't they the unsuccessful ones like Google Wave?
  - Oculus 13y ago
    The likely logic behind shutting down Picnik would have been to lessen the competition to Google+.
- Jormundir 13y ago
  I don't really see this as valid justification. This is the same explanation given every time, and every time the users are the ones completely screwed over. I think this is a justification to yourself rather than the underlying truth. > Our users were constantly on our mind. If that were true, you wouldn't have sold the company to Google, as the outcome is not out of the ordinary by any means. So though they may have been on your mind, your users were ultimately not your priority. > It was a real and sustainable business. Then why sell it? Which leads to: > We felt like we could make the product better by joining with Google. and > Picnik continued to grow dramatically while we were at google. Which means you prioritized growth over ensuring service and supporting your customers for the long term. This isn't bad, it's how you expand the business, but it does show your priority was not the customers you already had. Which brings us back to the original point: > This doesn't really apply to Picnik. I think you're deluding yourself, not in a way that implies any sort of insanity, but more of a coping mechanism so you don't have to confront the fact that your biggest priority was money and not your users. In the end, you (really your board, which I think includes you) sold to Google, relinquishing control over the long term care of your users. That is the action, and that is what is ultimately true. I don't think you're a bad person by any means. I would have made the same decision. Lets just be honest about outcomes. I think it's easy to be tricked in these acquisition offers, mainly because your personal outcome is ensured. You are getting lots of money, and you get the opportunity to see if you're business can get really big. The problem is, this actually puts a make or break ultimatum on your business. If you don't get the rapid growth you were hoping for, or your business doesn't align with the parent company down the road, then your business is broken (shut down by the parent) and your customers lose. So this is the gamble you face, and either way your future is positive, but you're betting with your customers, and when it doesn't work out they lose, but you don't.
  - faceyspacey 13y ago
    Fuck the users! If we are to be honest 90% of these products we build on hacker news are bullshit that are great for existing to drive innovation forward, but in itself easily replaceable because there are so many of us willing to make a better competing product. Come on now, mobile and web products if killed off doesn't hurt any users, Facebook and google included. They are close to debatable, but whatever. The supply of apps and sites is too high. The creators of them even higher. Not that it's a bad thing at all...u get the idea. Cry me a river about point and click/touch users.
- blueskin_ 13y ago
  A company with users on its mind should stay as far away from google as it can.
moreentropy 13y ago
This is basically a question I'd like to have answered as well, especially in a b2b setting. Is it justifiable to use the service of a possibly great startup, knowing that there's a real possibility that it might be sold soon and just be a gear in some other company's product?
- magicalist 13y ago
  As is usually pointed out in these conversations, that's true of all companies you could depend on, and all companies depend on others. That's why people sign contracts (which usually contain clauses about being honored even if the supplier gets bought out). That also saves you from things like a company you depend on deciding that it's going to compete in your market now: they still have to honor your contract.
- e12e 13y ago
  I've thought a bit about this, churning around various product ideas. In general I'd say that if it's a typical SaaS, I would probably only trust it with my data, my time (learning curve, adapting workflow etc) if it was a available under a licence that would allow me to self-host it if it was discontinued (or pay someone else to host it for me). This is for stuff like mail, images and other DAM (Digital Asset Management) systems, chat/im, bug trackers/knowledgestores and databases etc. Note, that I don't see any reason to trust Google either. Remember wave? Remember XMPP compatible gtalk? My conclusion has been that if/when I finally get started on my first product, I'll probably license it under AGPL, and make sure there's a realistic self-host story for users -- and then charge for the SaaS/PaaS-bit, but probably not for the client (or server side software under AGPL). Clearly it's a little more challenging -- you might end up with people competing with you for hosting -- but I can't see any other way to build customer trust. Nothing any company would say to me as a customer would make me trust them -- how could I ask anything else from my potential users? Since people still pay for hosted email (even if many, many do run off to freemium services) -- I'd say the business model is viable -- those that can afford to pay, and know that value can be added by proper hosting -- and not having to do everything themselves -- will consider becoming a customer. And I strongly suspect those kind of customers are the best kind of customers. Especially for a start-up. Even though I wasn't a user, the most dreadful death-by-buyout I remember is DabbleDB[1] -- compounded by the fact that the founders went to twitter -- presumably helping with the biggest non-product of our decade -- rather than allowing dabbledb to live on in any form. Also note that having a published API/open protocol/standard isn't enough. For example, the IMAP standard clearly states that message ids aren't necessarily in chronological order. Some IMAP servers make sure that they are and/or that messages are returned in a list ordered by (message) time -- and some will return the message that was latest modified first (eg: a messaged moved into a folder). Some IMAP clients get this right (sort as the user wanted, regardless of server implementation) -- some get it wrong. A small difference (arguably client bug) that can make or break certain use cases and processes for dealing with email. For a b2b setting -- one could reasonably offer source under a different license -- if AGPL seems too open for enforcing whatever business model one has decided on. But I suspect that AGPL would work fine in b2b settings as well. The key aspect is to offer source code and documentation in a form that offers a viable self-help scenario in the case of a bankruptcy or "death-by-acquisition". [1] http://www.youtube.com/watch?v=MCVj5RZOqwY http://www.youtube.com/watch?v=MCVj5RZOqwY
hga 13y ago
"the whole web startup concept seems broken. it's not about real solutions and sustainable businesses, but rather a giant get rich quick scheme." Well, something like that is always going to be a motivation of your investors. The real problem is that except for rare exceptions like Facebook, our government has destroyed the IPO exit, with SarBox in 2002 being the last nail in the coffin. I think a lot of people haven't internalized this yet, that that investment model which had a fantastic 4 decade run starting with late-50's legal and/or regulatory changes, is OVER. Silicon Valley/the Bay area really became magic during it, but the game has changed, and in such a way that it threatens the whole ecosystem. In that every acqui-kill (thanks for the term, _random_) means N more screwed users, meaning that many fewer people willing to take a chance on a startup of this nature. In my case, there are more than a few companies like this that I've thought I'd really like to use, but the risk/reward ratio is just too marginal. Those that have gotten successful, have a business model that looks viable, and have clearly decided not to get acqui-killed, like GitHub and FastMail, sure. A company like Picnik, forget it.
- binxbolling 13y ago
  I don't know much about this subject, so can you explain what "our government has destroyed the IPO exit" actually means? What was the investment model with a four-decade run that is now over, and how does it differ from the current model?
  - hga 13y ago
    This is rather a lot you're asking for, and this is widely and well documented. Although only of historic value now, which is sort of my point. Let's start with the most basic of basics, the "greater fool" principle. In that when someone makes an investment, they intend to get a return on it, perhaps interest and return of the principle for a CD or other loan, or being able to sell their stock to a "greater fool" then they. But investments in privately held companies are famously illiquid. If you own 10% of Brand New Web Startup (BNWS), ignoring whatever contractual conditions there may be on selling your share, you can only sell it to a "qualified investor", i.e. not a widow or orphan but a person of documented wealth (and that's been tightened recently). And for these sorts of small companies finding a buyer can be extremely difficult. This is generally true even if the company is well established, nicely profitable, and looks to have a good future. It's called the "cashing out" problem, and my father made more than a small amount of money helping founders and investors in small companies do that. So that's the general background. One route opened up in the late '50s (this is from memory, and I don't remember exactly what the detail was, venture capital preceded this), is an Initial Public Offering, where you use an investment bank to offer a fraction of your company to the general public, as shares of stock. If this transaction is successfully completed, you and the investment bank have big bags of money, and many generic, not necessarily "qualified", investors have shares of stock in your company. And your company is now "public", it has shares traded on an exchange, those shares are liquid, and you're subject to a whole lot of law and regulations, again, to protect those widows and orphans who are now allowed to buy a part of your company. Sarbanes-Oxley was the final nail in the coffin of going public with an IPO because it made being a public company unreasonably expensive, onerous, and legally dangerous. Almost all companies that would have previously paid back their venture capitalists through an IPO have to use another route, and being bought by a big company is the easiest and perhaps most common method (but one that most of the time is ruinous, the history of high tech mergers and acquisitions is horrible). Our host made his money this way, selling Viaweb to Yahoo, and you can look up some of the aftermath in his essays. This, BTW, no doubt has something to do with VCs' having flat returns for the last decade.

mikehar 13y ago

This doesn't really apply to Picnik. It was a real and sustainable business. We felt like we could make the product better by joining with Google. Our users were constantly on our mind. Picnik continued to grow dramatically while we were at google. It was closed down at its peak. FWIW we tried to buy Picnik back from Google once we heard that it was going to be shuttered. They wouldn't sell. It was gut wrenching to see Picnik go dark.

dalanmiller 13y ago
The hard part is didn't they realize they were taking away one thing and not replacing it with another? That part is the most frustrating of all.
- tempestn 13y ago
  I'm experiencing exactly this frustration with their acquisition of SageTV now. (Well, the acquisition was a while ago, but the pain is starting now.) MythTV is theoretically an alternative, but requires quite a bit more time investment it seems.
27182818284 13y ago
> It was closed down at its peak. What the heck was the reason behind that? I'm so curious. I know Google likes to headshot different products, but typically aren't they the unsuccessful ones like Google Wave?
- Oculus 13y ago
  The likely logic behind shutting down Picnik would have been to lessen the competition to Google+.
Jormundir 13y ago
I don't really see this as valid justification. This is the same explanation given every time, and every time the users are the ones completely screwed over. I think this is a justification to yourself rather than the underlying truth. > Our users were constantly on our mind. If that were true, you wouldn't have sold the company to Google, as the outcome is not out of the ordinary by any means. So though they may have been on your mind, your users were ultimately not your priority. > It was a real and sustainable business. Then why sell it? Which leads to: > We felt like we could make the product better by joining with Google. and > Picnik continued to grow dramatically while we were at google. Which means you prioritized growth over ensuring service and supporting your customers for the long term. This isn't bad, it's how you expand the business, but it does show your priority was not the customers you already had. Which brings us back to the original point: > This doesn't really apply to Picnik. I think you're deluding yourself, not in a way that implies any sort of insanity, but more of a coping mechanism so you don't have to confront the fact that your biggest priority was money and not your users. In the end, you (really your board, which I think includes you) sold to Google, relinquishing control over the long term care of your users. That is the action, and that is what is ultimately true. I don't think you're a bad person by any means. I would have made the same decision. Lets just be honest about outcomes. I think it's easy to be tricked in these acquisition offers, mainly because your personal outcome is ensured. You are getting lots of money, and you get the opportunity to see if you're business can get really big. The problem is, this actually puts a make or break ultimatum on your business. If you don't get the rapid growth you were hoping for, or your business doesn't align with the parent company down the road, then your business is broken (shut down by the parent) and your customers lose. So this is the gamble you face, and either way your future is positive, but you're betting with your customers, and when it doesn't work out they lose, but you don't.
- faceyspacey 13y ago
  Fuck the users! If we are to be honest 90% of these products we build on hacker news are bullshit that are great for existing to drive innovation forward, but in itself easily replaceable because there are so many of us willing to make a better competing product. Come on now, mobile and web products if killed off doesn't hurt any users, Facebook and google included. They are close to debatable, but whatever. The supply of apps and sites is too high. The creators of them even higher. Not that it's a bad thing at all...u get the idea. Cry me a river about point and click/touch users.
blueskin_ 13y ago
A company with users on its mind should stay as far away from google as it can.

moreentropy 13y ago

This is basically a question I'd like to have answered as well, especially in a b2b setting. Is it justifiable to use the service of a possibly great startup, knowing that there's a real possibility that it might be sold soon and just be a gear in some other company's product?

magicalist 13y ago
As is usually pointed out in these conversations, that's true of all companies you could depend on, and all companies depend on others. That's why people sign contracts (which usually contain clauses about being honored even if the supplier gets bought out). That also saves you from things like a company you depend on deciding that it's going to compete in your market now: they still have to honor your contract.
e12e 13y ago
I've thought a bit about this, churning around various product ideas. In general I'd say that if it's a typical SaaS, I would probably only trust it with my data, my time (learning curve, adapting workflow etc) if it was a available under a licence that would allow me to self-host it if it was discontinued (or pay someone else to host it for me). This is for stuff like mail, images and other DAM (Digital Asset Management) systems, chat/im, bug trackers/knowledgestores and databases etc. Note, that I don't see any reason to trust Google either. Remember wave? Remember XMPP compatible gtalk? My conclusion has been that if/when I finally get started on my first product, I'll probably license it under AGPL, and make sure there's a realistic self-host story for users -- and then charge for the SaaS/PaaS-bit, but probably not for the client (or server side software under AGPL). Clearly it's a little more challenging -- you might end up with people competing with you for hosting -- but I can't see any other way to build customer trust. Nothing any company would say to me as a customer would make me trust them -- how could I ask anything else from my potential users? Since people still pay for hosted email (even if many, many do run off to freemium services) -- I'd say the business model is viable -- those that can afford to pay, and know that value can be added by proper hosting -- and not having to do everything themselves -- will consider becoming a customer. And I strongly suspect those kind of customers are the best kind of customers. Especially for a start-up. Even though I wasn't a user, the most dreadful death-by-buyout I remember is DabbleDB[1] -- compounded by the fact that the founders went to twitter -- presumably helping with the biggest non-product of our decade -- rather than allowing dabbledb to live on in any form. Also note that having a published API/open protocol/standard isn't enough. For example, the IMAP standard clearly states that message ids aren't necessarily in chronological order. Some IMAP servers make sure that they are and/or that messages are returned in a list ordered by (message) time -- and some will return the message that was latest modified first (eg: a messaged moved into a folder). Some IMAP clients get this right (sort as the user wanted, regardless of server implementation) -- some get it wrong. A small difference (arguably client bug) that can make or break certain use cases and processes for dealing with email. For a b2b setting -- one could reasonably offer source under a different license -- if AGPL seems too open for enforcing whatever business model one has decided on. But I suspect that AGPL would work fine in b2b settings as well. The key aspect is to offer source code and documentation in a form that offers a viable self-help scenario in the case of a bankruptcy or "death-by-acquisition". [1] http://www.youtube.com/watch?v=MCVj5RZOqwY http://www.youtube.com/watch?v=MCVj5RZOqwY

hga 13y ago

"the whole web startup concept seems broken. it's not about real solutions and sustainable businesses, but rather a giant get rich quick scheme." Well, something like that is always going to be a motivation of your investors. The real problem is that except for rare exceptions like Facebook, our government has destroyed the IPO exit, with SarBox in 2002 being the last nail in the coffin. I think a lot of people haven't internalized this yet, that that investment model which had a fantastic 4 decade run starting with late-50's legal and/or regulatory changes, is OVER. Silicon Valley/the Bay area really became magic during it, but the game has changed, and in such a way that it threatens the whole ecosystem. In that every acqui-kill (thanks for the term, _random_) means N more screwed users, meaning that many fewer people willing to take a chance on a startup of this nature. In my case, there are more than a few companies like this that I've thought I'd really like to use, but the risk/reward ratio is just too marginal. Those that have gotten successful, have a business model that looks viable, and have clearly decided not to get acqui-killed, like GitHub and FastMail, sure. A company like Picnik, forget it.

binxbolling 13y ago
I don't know much about this subject, so can you explain what "our government has destroyed the IPO exit" actually means? What was the investment model with a four-decade run that is now over, and how does it differ from the current model?
- hga 13y ago
  This is rather a lot you're asking for, and this is widely and well documented. Although only of historic value now, which is sort of my point. Let's start with the most basic of basics, the "greater fool" principle. In that when someone makes an investment, they intend to get a return on it, perhaps interest and return of the principle for a CD or other loan, or being able to sell their stock to a "greater fool" then they. But investments in privately held companies are famously illiquid. If you own 10% of Brand New Web Startup (BNWS), ignoring whatever contractual conditions there may be on selling your share, you can only sell it to a "qualified investor", i.e. not a widow or orphan but a person of documented wealth (and that's been tightened recently). And for these sorts of small companies finding a buyer can be extremely difficult. This is generally true even if the company is well established, nicely profitable, and looks to have a good future. It's called the "cashing out" problem, and my father made more than a small amount of money helping founders and investors in small companies do that. So that's the general background. One route opened up in the late '50s (this is from memory, and I don't remember exactly what the detail was, venture capital preceded this), is an Initial Public Offering, where you use an investment bank to offer a fraction of your company to the general public, as shares of stock. If this transaction is successfully completed, you and the investment bank have big bags of money, and many generic, not necessarily "qualified", investors have shares of stock in your company. And your company is now "public", it has shares traded on an exchange, those shares are liquid, and you're subject to a whole lot of law and regulations, again, to protect those widows and orphans who are now allowed to buy a part of your company. Sarbanes-Oxley was the final nail in the coffin of going public with an IPO because it made being a public company unreasonably expensive, onerous, and legally dangerous. Almost all companies that would have previously paid back their venture capitalists through an IPO have to use another route, and being bought by a big company is the easiest and perhaps most common method (but one that most of the time is ruinous, the history of high tech mergers and acquisitions is horrible). Our host made his money this way, selling Viaweb to Yahoo, and you can look up some of the aftermath in his essays. This, BTW, no doubt has something to do with VCs' having flat returns for the last decade.