Twitter’s business model is to sell the company
flaptor.com
flaptor.com
It's a valid strategy, but it's not a business model.
It's not that great a strategy either...
The problem with companies like Twitter is that they don't know if the Pope will like their art. My point is that if you are going to create one product to sell to the church, you should try to attract the Pope's interest as early as you can to reduce your risk.
Why is having the goal of being sold while making things people want not that great of a strategy?
If you can build something people want, it seems relatively easy to convince some fraction of those users to pay for it. Convincing a big company to buy you is a long shot; convincing a big company to do anything (even if you work there) is tough.
Look at Dinosaur Comics -- that guy can't even draw, but he's making a living at it. Now imagine trying to sell such a crazy idea to an existing company.
If you can make something people want, it almost seems irrelevant to think about big companies. They'll only consider buying you once you look like a solid business proposition already. It's a reward, not a bailout.
Perhaps it's a loss leader, a service that you plan to give away in order to attract customers to your main business (a contrived example, Godaddy could buy some game that somehow encouraged you to buy domain names).
That doesn't make it a good idea. The answer to "Who is your target market?" should not be "Uhhh... Google?" There are many more companies that built a "cool" product that was useful and used, couldn't monetize it, and died because of lack of capital. Somehow I doubt YC has ever invested in a company that flat out had no exit strategy outside of being acquired by a big company. You've got to have something because if none of the big fish bite you're screwed otherwise.
I think his drawings are pretty good.
He must have a very steady hand.
The bad strategy is to build a company few buyers would want.
So much for microstrategy. The bigger problem is that if you're making something only one acquirer would want, it's probably not important technology.
EDIT: @Diego. Had I read you comment, I would probably write mine differently. Apologies.
A "sell the company" business model is like becoming an actor with a mind of becoming rich like Tom Cruise. No doubt some people who do it will find some success, but by definition this is something that (a) works only for a small number of people (the world needs a limited number of movie stars, Google & Co acquire a limited number of companies) and (b) contains a large element of luck - many actors have comparable talent & looks, many companies can (and a few already have) build a Twitter-like product.
The Black Swan by Nassim Nicholas Taleb is a great book about the randomness in our lives: http://www.amazon.com/Black-Swan-Impact-Highly-Improbable/dp...