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Comment by staunch | Hacker News Reader

It's probably the most damning and valid critique of The Valley.

How many Twitters/Facebooks/Dropboxes/Airbnbs don't exist because the founders sold them for $15M in 18 months?

Sometimes it's because the founders aren't really passionate enough about what they're working on.

Other times it's just financially insane to say no. A great example is Mint.com. How do you tell Aaron Patzer not to sell, when he's going to make $40M personally? That's more than he might have made in an IPO after many years.

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It didn't seem to me that he was complaining about founders selling companies quickly so much as employees flitting from one to the other so fast.

In my experience, founders in the Valley are more likely to have the confidence to turn down acquisition offers than founders outside it. All the examples you list are Valley startups.

I also think he was reflecting on some of Steve Jobs' views. Jobs had repeatedly bemoaned the flip mentality and respected Zuck a lot for not selling. I got the feeling that made a big impression on him and has soured him a bit to a portion of SV culture.

He's absolutely correct about employees flitting from one to another quickly - that is a valley culture thing. Part of that is because there are so many opportunities in the valley - There are probably a hundred plus companies that I could reasonably expect to find gainful employment as an network infrastructure manager in the valley. It's also considered completely reasonable behavior to work at a company for 3-5 years, and then move onto the next one. It's not so much about employees being short sighted, it's about enhancing your experience base, contacts, and chances to find at least one company that does well in the stock market and bring some value to your options.

It's a catch-22 for technology companies - on the one hand, they have to work pretty hard (or offer a lot of money) to hold onto their employees past that five year mark. On the flip side, the reason they have to work so hard to do so, is because there are so many employees ready to change companies - including coming to work for theirs.

"It's also considered completely reasonable behavior to work at a company for 3-5 years, and then move onto the next one."

I believe this is the norm outside the Valley as well.

I'm trying to find a blog post about how, after 3 years at the same job, the challenge diminishes and it makes more sense to switch (if management doesn't recognize the need for growth).

Founders can sell their shares if they like on secondmarket or as part of a new round of funding. They don't need to sell the company for that.

> How many Twitters/Facebooks/Dropboxes/Airbnbs don't exist because the founders sold them for $15M in 18 months?

If the founders exited with the cash they were looking for, so what?

> How do you tell Aaron Patzer not to sell, when he's going to make $40M personally?

You don't, and why should you?

> That's more than he might have made in an IPO after years more work.

Who care about an IPO? If you can cash out before that, awesome!

The world is better off when companies like Dropbox exist as large transformational forces of technology progress. If they all get strangled in their crib's progress slows.

Imagine if Yahoo hadn't flubbed the acquisition of Google? We'd all be worse off.

> If they all get strangled in their cribs progress slows.

A founder exiting with millions isn't strangling anything. They aren't working to change the world, they're working to make enough money to not have to. Those who want to change the world, like Zuck, wouldn't take the buyout offer because money wasn't the goal. Those who take the cash would have taken it whenever it was offered and left regardless, better to do it early and it's just wrong to say the company was strangled.

> Imagine if Yahoo hadn't flubbed the acquisition of Google?

You don't know that. For all you know, the combined money of Yahoo and talents of Google could have resulted in something better than what we ended up with. No one knows either way.

What are you basing your comment on other than utopian world views?

There's fairly good research (though the point is debatable) that most innovation, especially the kind that significantly shakes up industries, comes from smaller companies, not from large, established firms. If that's true, then it would also be reasonable to hypothesize that if large established firms are able to buy out upstart competitors extremely early, and pull them into the fold so to speak, there will be less overall innovation.

It's pretty hard to prove these sorts of things, since it's hard to set up solid experiments with good controls in economics, but there is some interesting research around the what-drives-innovation question, and it's not an unreasonable hypothesis, at least.

On some level, yes, but companies don't magic employees into existence. It doesn't matter too much if the Go language comes out of Dogpile or Pets.com instead of Google, does it?

I can definitely see that Google is more likely to foment transformation than a Yahoo, but I think it's a lot harder to say that we're better off with fewer acquisitions. It seems like the only good metric is number of good employees at good companies, and it doesn't matter much if it's Google or a company that decided not to get acquired by Google. (Although I don't think it'd be that great if Google were the only 'good company' in this hand wavy metric.)

> Imagine if Yahoo hadn't flubbed the acquisition of Google? We'd all be worse off.

It goes both ways. Imagine if Google hadn't bought Android? We'd all be worse off.

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