Comment by papertiger
15 years ago
I've honestly never understood why startups want to be acquired (besides the monetary gain for individual employees). Doesn't acquisition often destroy or dilute the very successes they've worked so hard to build? (I worked for an acquisitive company that worsened nearly every product/company it acquired.) Why not just focus on making your business better?
Heroku will now be subject to all kinds of pressures and asinine ideas that may not relate to their core offering. As a Heroku user I am concerned and saddened.
Can anyone offer any perspective? I'm puzzled by the acquisition mindset.
Despite what gets repeated in the echo chamber that surrounds hackernews that money isn't the main motivator for entrepreneurs and hackers, it is in fact all about the money.
Of course, day-to-day it has to be about much more than money otherwise it would be impossible to stay motivated. But the end goal is almost always about making a boatload of cash.
I currently design new products for an established company. When I finish a product, there's a trained staff of production, sales and support people that make the product successful. (Just speculating but) it's quite possible that the Heroku folks think they can't grow as fast without some additional business infrastructure. If this accelerates their trajectory, then they'll quickly get some distance between themselves and the zoo of other (not as slick) app hosting platforms. Just having someone else to take care of the legal side of HR so that you can go back to product development, while at the same time putting enough in the bank to live on the beach forever, may have looked attractive. Lots of possibilities, but a billion dollar cash-out is not the only way to make yourself happy in life.
I see two main reasons:
- Freedom to move on to the next project. I bet most entrepreneurs are more interested in creating than maintaining.
- Money/security. The trend toward payouts when raising major rounds is helping with this issue, but still the resources available change significantly with a big payout, plus you can diversify your income stream to hedge against contingencies.
Why would you want to work on the same thing forever? Sure if you found a Google or a Facebook then you may have an ample playground, but most small companies do not have opportunities that interesting. You can try to force a round peg into a square hole or just take your cash and start something new.
Money.
I've honestly never understood why startups want to be acquired (besides the monetary gain for individual employees).
That's like saying one doesn't understand why people play the lottery (besides the monetary gain from winning).
No, it's not like saying that at all.
Playing or winning the lottery involves nothing but money. An acquisition involves major changes to an organization's structure, its products or services, and the lives of all its employees.
EDIT: Removed snarkiness.