Comment by neilk | Hacker News Reader

Comment by neilk | Hacker News Reader

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they obviously have a plan

That's not actually true. The thing about giants that acquire startups, is that a) they had the resources to build this thing themselves; b) they didn't.

So ask yourself why didn't they build this thing. It wasn't lack of resources. It wasn't lack of intelligence; they keep tabs on everyone and they go to SXSW too. There were forces that stopped the giant from innovating in this direction. Some of them are technological, but the real issues are usually cultural and political.

Once acquired, the startup is now exposed to all these forces -- with double intensity, since it is an outsider and has few friends in the organization. Unless it's already profitable, has a large userbase, or has big fans among the top execs, it has very little power.

I think these recent articles about how giants "ruin" acquisitions do not take culture and politics into account. The technical issues are not the problem.

The depth/extent of the plan is surely debatable, but folks like Larry and Sergey and Eric Schmidt would not make the decision to pull the trigger for an acquisition unless they knew what they wanted out of it. They are smarter than that .

In the case of MeasureMap, for instance, they knew they wanted that technology integrated into Google Analytics. They may not have been able to answer the "how" part of "who, what, when, where, why, and how", but surely they knew the "who", "what", and "why".

I understand that the startup built the technology and the acquirer didn't. That's the beauty of how this system is set up - a company like Google with piles of cash and stock can has so much money it can buy anything it wants.

Well then how do they decide which startups to buy (MeasureMap, Feedburner, etc.) and which startups to pass on (Digg)? That's the "master plan"..

And the thing about startups is that there's no reason to think that they would continue running the way they were indefinitely without charging membership fees, or plastering ads all over them, or somehow ruining the experience that their supporters value so much.

They sell for a reason, usually that their funding is running out, founders facing a down round, increasing pressure to become profitable. The fallacy is that the sweetness and light will continue indefinitely.

That's very insightful, thank you very much.

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