So the rule would be that companies can only get acquired after they go bankrupt?

Would anyone ever invest in startups, in that scenario?

> Would anyone ever invest in startups, in that scenario?

Because they are expecting that the startup will turn into a profitable business, maybe?

Being acquired is very far from the only way that an investor can see returns.

There's still IPOs, isn't there? Maybe it cuts down some of the stupid money going into tech, too, which wouldn't be the worst thing.

And, hey, if the business is successful, you own part of a successful business.

A decade+ of acquisition as the default "exit" (and the idea that you have to be driving for an "exit" in the first place) made people straight up forget how companies normally work, apparently.

Seriously, why not just do something well and make a living from it? I've seen the word enshittifcation plenty lately, and it strikes me that the focus on exits and payouts is a big part of the problem.

I feel old and you goddamn kids better be off my lawn by the time I get back with the shotgun.

Well, for a long time, you would just get an MVP up and then collect as many users as possible by offering free accounts, and if you were somewhat aligned with something Facebook or Google was vaguely interested in, you'd get acquired for $100m. Getting $100m for two years of work is a lot more lucrative than working hard for a decade to build a self-sufficient company, so I can't really blame people for doing it.

Plus, in the case where you'd choose to build a real business, now you'd have to meet user expectations of everything being free because that's what they get everywhere else.

This is a factor you need to take into account, but in my experience, people overstate it. It's not actually that hard to get people to pay for things online.

The way you do it is the way it's always been done historically: offer a value proposition that justifies the money. And don't offer it for free at the beginning. People rightfully get very angry if you change the deal after they've come to rely on your product or service.

I don't know, my experience is that there is a group of people who don't mind paying for things online. I can generally group them in "people who own a mac, an iphone or an ipad"

I still am clueless as to how to generate a network effect without giving things away for free. And as you said, once it's free, it's expected to remain free

The cynical me says that some people are able to generate a network effect because of fame or because of an existing network to which they belong (i.e. being chosen at YC or published in a newspaper). For example, FB was promoted to death in all US campuses for free during the 2000s. I wonder how that happened (honest question)

> Getting $100m for two years of work is a lot more lucrative than working hard for a decade to build a self-sufficient company

Are we discussing drug cartels? Because this reads literally like it could apply only to a highly criminal business.

Drug cartels? No!

We're just talking about a situation where some existing large interests have a lucrative business peddling some pretty addictive stuff, and they want to make sure nobody else encroaches on their turf. To that end, they're willing to spend a lot of money to "make the problem go away". Sometimes that means bringing the upstarts into the fold!

Not at all like drug cartels.

> Sometimes that means bringing the upstarts into the fold!

Sometimes it means asking the upstarts to say hello to your little friend.

There are lots of early-investor-to-later-investor exit paths; it would just cut down on the "built-to-flip" model, which is a distraction anyway.

You've actually made a good argument for the M&A ban.

Consider: if it is as you're implying, that investors expect their returns to be realized mainly through acquisition, and if it's indeed common that startup acquisitions are done to kill a potential competitor, then... all the investors are doing is extorting large corporations. If you include IPO in the picture, they're also alternatively robbing the public.

If it's just rich getting richer by pulling money out of megacorps and large populations, then this is... literally the opposite of useful, valuable contribution to the society.

The way I see it, the above isn't 100% true, but it seems true in majority of cases, which makes me inclined to support the "M&A ban" idea.

this sounds like it was dreamt up by a bunch of lawyers trying to get themselves more work. there's a lot more paperwork and bullshit involved in going into bankruptcy than just being bought out.

the point is not the thin edge case of bankruptcy vs merger, the point is that the fat part of the market would have been better off if Instagram was competing with Facebook, not part of Facebook, if video streaming services competed for eyeballs instead of being consolidated under Google who already controls eyeballs, etc.

> there's a lot more paperwork and bullshit involved in going into bankruptcy than just being bought out.

Not necessarily.

In fact, based on my experience I'd wager that in the bulk of the cases a bankruptcy would be far simpler from a paperwork perspective (but harder on the creditors).