Some founders start their companies to be flipped. Some start with the intention of going for the long-game but find the reality of competing in the market exhausting and emotionally draining. Some realize that they won't be able to capture the market share they want. Other times internal strife or conflicts with investors get in the way.
There are many motivations for acquisition and the realities of the difficulties of startups make any good offer very appealing. It's very hard to resist.
More generally, I never really hear stories of founders stopping their work at a company that isn’t after an acquisition or IPO. The alternative is the founder going “I am retiring and leaving this person in charge, but maintain my ownership of the company and will be taking 20% of the future profit in exchange for my 10 years building up this company.” Maybe it happens and we just never hear about it, but without some alternative for founders to cash out at the end it’s not surprising that selling the company off is what happens.
Yes. Very. More than you can imagine. Trading good work for great sums of money isn't selling your soul. No one is under a moral obligation to build something that benefits the future of humanity. Furthermore, the vast majority of startups (including the 3 mentioned) were arguably never going to be humanity-changing businesses regardless.
If this is a conversation worth having at least reference bio-science and space exploration startups that actually have a chance to change the world.
I really don't understand this attitude. If someone offers me enough money so that I never have to work again, you expect me not to take it?
I'll sell any company if I could get $4 million after tax and never have to work again. Every single time I'll take that offer. I guess that's how much my "soul" is worth. And yes, that will make me happy!
We have one life. The time we do not spend with our children (or the time we postpone having them "for the greater good") can never be returned back.
(Though even more established Google products that are not Search/Ads still never make it far past the middle)
There's an awful lot higher chance of a startup product not being a "safe" buy compared to an established company to kill a somewhat popular product and you can always look at their track record before making a decision (something a startup, by definition, typically doesn't have).
While it might not necessarily be true of 50%+ of companies that are acquired go into the deadpool, it's common enough that an acquisition of a company's product that you use should cause you at least to make sure you have some sort of strategy to deal with a potential deadpool situation. Maybe it's not a guaranteed probability, but it is indeed very likely.
No it doesn't.
Acquired at 10mn users, not really used by anyone except SF hipsters.
Now a massive juggernaut and the same size (in MAU) as Facebook was when they acquired it.
Well put. And the reward? You + family/friends look back on your work with deep fondness & respect if you choose principles > acquisition $.
It's the only motivation. Why do you think wealthy and high income people fight so hard against repaying the society that educated them and provided the infrastructure to allow their business to flourish?
I forget where it came from-- I thin Warren Buffet but I can't source it now-- but there's a sort of thought experiment or anecdote about this: Give everyone in the US a dollar. Then randomly choose half the country and have them give their dollar to a specific person in the other half. Repeat this process with the remaining people until there's only 340 people that each have a million dollars, then talk to those 340 people: You'll have 340 stories of how they personally overcame the odds and beat out everyone else to become a millionaire
I.e. I assume people know the role luck plays in life, but are also not interested in the consequences of acknowledging that, and/or are interested in the consequences of pretending like they deserved it.
People do it all the time with friends and relatives. You don’t up front tell someone they’re only worth 10 min of your time, or you prefer visiting someone else in your free time. But you make up excuses or stretch some truths to give both parties plausible deniability, which allows everyone to save face.
Workplace politics is the same. You have a limited amount of time and energy to devote, so you will have to sacrifice some coworker’s or manager’s priorities for other colleague’s priorities. But you’d be foolish to tell them up front. Enter workplace politics, where you have to figure out whose aligned with who and for what purpose do you can figure out your next move.
The more scarce/valuable the resource, the more politics comes into play. And if it gets too scarce/valuable, it will end up in violence/war.
Being able to navigate these signals is a crucial factor to succeeding in society, in my opinion.
Sorry, but I'm not seeing it. Here is a list of the Giving Pledgers: https://en.wikipedia.org/wiki/Category:Giving_Pledgers.
They have all committed to giving more than half of their wealth to charity. 5 of the 10 richest Americans are on that list. It amounts to around $1.2 trillion.
> Simply "offering more" does not address the reason why there aren't more Googles.
You must put that advice in context...
The context here is that PG's job is to be the first investor in a company.
Advising potential acquirers to raise the offer can only grow his personal return.
It makes perfect sense for PG to encourage potential acquirers to throw more money at startups.
Also, he turned out to be right. Acquisition prices (eg fb acquisition of whatsapp, IG, etc) went up. Investors made a lot more small bets. A lot of "new Googles" got made. That may be played out already, but this is 12 years later.
Such as?
I suppose that what a google is, or was in 2008, is debatable. Two of the above are fellow "FAANG" members today. In a 2008 sense, I think we can take it as meaning 'new $50bn+ tech company." There are lots of those.
Theoretically everyone will sell at some point and the above argument can be made in each and every case.
Let's say Yahoo had offered Google $1B, and Google declined, Yahoo ups its offer to $2B, Google still declined.. this can go on forever till we reach Yahoo's maximum capacity to pay and if Google still declines with: it's not enough - the above argument would still hold.
Thus, IMHO, the above argument has no merit. While price is certainly a very important factor, there are always other underlying issues as to why some sell and others don't.
Paul Graham is one in 7 billion who stands out among billions of lesser educated.
He’s not a savant. His biggest success is early mover in a tech enabled society.
That’s not visionary, that’s following the social meme and being there at the right time.
Visionary in contemporary society means coming up with the next big thing itself; unifying scientific theories. Not seeing half-truths of reality in cherry picked stat bubbles of finance. There’s been no prediction of relevance just repeated habit
Billionaires are nothing more than gamblers who are propped up by monopolized politics.
Also monopolized capital. Lots of people understood the prospects of the "internet" market. The question is who has access to capital and political protection.
Amazon could have been shut down when the dotcom bubble burst like so many other companies. How were they able to maintain funding/capital for nearly 20 years without making a profit? Amazon could have been shut down in the 90s if they were forced to collect taxes. How were they able to ward off paying taxes for so long? Why was amazon afford such capital/political shelter?
It's a matter of markets and who gets a share of the markets. Historically, it was people with connections. The right school, right family, right race, right nationality, etc. Now I'd say who has connections to capital though school, family, race, nationality, etc plays a role.
But if the success of a billionaire isn't entirely related to their singular genius and effort, what does that mean for me and my chances of success? It's uncomfortable to think about that so instead I'll pretend it really is only about their singular genius and effort and that means I can get there too some day. :)
There's no evidence that this is the case.
Indeed, after founders are acquired their fierce competitive spirit and drive often starts to dissolve once the founders have gotten their exit and the teams run into the inevitable corporate realities that exist when teams are merged / integrated into a new culture.
Simply "offering more" does not address the reason why there aren't more Googles.
The hard truth is that technology incumbents fiercely defend their space making it very hard for new entrants to compete. Strong entrants either get acquired, and merged into the Borg, or are sidelined as the incumbents defend their turf sometimes through enhancements to the product / feature set, but often through somewhat anti-competitive actions that bar entry from new entrants.
While I would like to think the world is a meritocracy ("let the best product win"), the truth is far from that. And I think a lot of this piece from 2008 rests on half-truths and wishful thinking.