Comment by koonsolo | Hacker News Reader

Comment by koonsolo | Hacker News Reader

I once worked at a company where I didn't understand why they took certain decisions. In the end, it all became very clear. My mindset from "these guys have no idea" shifted towards "wow, they are smart, I didn't get this part".

Basically, they were acquiring customers faster than anyone could follow. Our development goal was "fast and opportunistic". As you can expect, the product was full of bugs, and customer support had their hands full. It was a shitty product with a lot of customers.

I didn't see how this would ever turn into a success story. We were digging a grave. But I didn't realize 1 thing: we were not selling a product, we were selling the company.

In the end, a huge Canadian competitor wanted a foothold in the European market, and so they bought us (and our customers). They were going to introduce their own product to the customers, and so our product was thrown in the wastebasket.

In the end, it all ended as planned, and the founders walked away with a lot of money. Basically they built a customer base in EU, and sold that one to another company. Big eye opener for me.

Looking back, it is also very interesting to see how they positioned their company within that market, to be acquired.

> I didn't see how this would ever turn into a success story. We were digging a grave. But I didn't realize 1 thing: we were not selling a product, we were selling the company.

why don't the executive making this goal clear to the "underlings"?

I'm guessing you want to avoid word getting out that could spoil the deal / depress the price?

Because if they did, that info would most certainly get out and negatively affect the company’s reputation.

I don't know thei particular situation, but it can be many things. The executive might have a lare degree of congnitive disonnance (still fully beliving in the things they tell their employees in the moment). Alternatively they may judge that being fully open with their employees will have negative consequences. And, heck, I think many are fully transparent but some employees just turn a deaf ear to certain things in order to maintain some variety of identity.

If the underlings know their product is intended to be trashed, do you really think they will suffer through the late evenings and weekends of gruelling overtime to patch ugly bugs in production?

I don't.

I think programmers in general have an overly optimistic expectation of the lifespan of their works. "The great thing about software," they say, "as opposed to buildings or hammers, is that you can write code once and use it forever," as they ignore the dozens of applications and libraries which did nearly the same thing as the code they are writing.

> I think programmers in general have an overly optimistic expectation of the lifespan of their works.

I think programmers in general have an overly pessimistic expectation of the lifespan of their works. They write temporary, ugly hacks for the sake of expediency, and then 10, 20 years later the whole world is still suffering because of those "temporary" hacks.

Very good point. It was a very good lesson for many, that the company you work for is not your company, but theirs.

Most companies always talk about "us" and "our company". But once it gets sold, it will be very clear that it's not "us".

Because the "underlings", like the product, were part of the sacrifice. At best, they'd learned they just wasted a lot of time and energy trying to build a product (which was necessary for the scam). At worst, they'd find out they were all getting laid off as unnecessary to the purchaser's interests.

"Hey developers, you will be out of a job when some other company acquires us. This is best case for us, because we will make a lot of money. Unfortunately for you, you don't have any shares, so you will probably just be fired or prodded to leave".

I think I was the first one to realize what was going on: we were the developers in Belgium, and we had some cheap developers in Eastern Europe. They had developers in US. They were going to continue developing their own product, and would "keep us all as developers".

But from their point of view, it didn't make much sense to me that "We have devs in EU, but those guys from Belgium are 4x more expensive than those from another country". I quit shortly after the acquisition, and my colleagues all left a year later. They kept the developers in Eastern Europe.

It makes total sense to me, and I'm not resentful about it, probably because it's so easy for developers to find a new job.

One other thing I want to mention: they were very transparent on the strategy when they were acquiring various smaller companies. Very insightful.

Because it's not their business!

(Sorry for the horrible joke, but it's Friday.)

No one wants to be a resident in a Potemkin village.

Anyone aiming for VC money should realize that this is what's coming, in the vast majority of cases, no matter how different expectations might be set initially.

Why only VC money? I don't understand, which person would invest their in your company so that the customer (rather than themselves) should get value from it?

From what I experienced (could be misrepresentative), larger banks don't tend to put that kind of pressure when they provide investment capital.

Could be that it's not that they don't care, just that they don't take that level of involvement with growth companies.

VCs tend to take a <5 y perspective, where banks and other investors can play more long-term games

VC also tends to be looking for big, long tail wins. If you blow up 9 companies, but the 10th is a huge success - you're gold. If 10 of your companies are middling successful? You're not going to have the returns your investors were looking for, and you're toast.

That's so interesting! I wouldn't have the first idea how to pull off a plan like this; is this what people learn in the field of M&A?

For example, how can you be confident that someone will be interested in acquiring you, and for a good price, instead of one of your competitors, or just building their own? How do you know your customers will be happy to switch to the replacement product that gets put in front of them? (I'd be quite interested to know what they did to make themselves an attractive target for acquisition, as a practical example)

With reference to the main topic - I think there is a place in the market for both stable long-term and high-growth shorter-term businesses like this example. Sometimes the market is hungry for a solution right now, not something perfect in five years. Satisfying this demand is what causes high growth. And it's natural that we see a lot of this in the tech industry, since we're closer to the cutting edge than most.

Startups are sometimes not even doing the customer acquisition bit. I was part of an accelerator where the most common exit was acqui-hiring i.e. some big corporate is going to want to hire some smart ML types in the future with a cool brand behind them

> I once worked at a company where I didn't understand why they took certain decisions. In the end, it all became very clear. My mindset from "these guys have no idea" shifted towards "wow, they are smart, I didn't get this part".

How is this story is relevant to the linked article?

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