Out of acqui-hire stage

http://www.gabrielweinberg.com/blog/2012/04/out-of-acqui-hire-stage.html

by duck • 14 years ago

73 24 14 years ago

illumen• 14 years ago

ramen noodle, aqui-hire, ..., facebook

its_so_on7• 14 years ago

Personally, I would hate to be in Zuckerberg's shoes. I don't mean I would mind the money, but I would hate to literally be in his shoes running the company "with my name on it" as a sole founder. If anything goes wrong, he's pretty much "done" with entrepreneurship. So perhaps a better example is the loads of non-facebooks that make a ton of money on a quiet multibillion dollar exit, without anyone outside a tight circle even knowing who the founders were. (although having a ton of users). Instagram, maybe?

EDIT: you guys don't like this comment. Let me generalize.

- Facebook is a bad example because it reached a 50B valuation in private equity deals pre-IPO.

It's better if you mention a company that has already IPO'd, been sold outright (founder not involved anymore), or has lower-valuation equity deals, so that the founder is not under as much pressure.

I would not like to be in the position of figureheading such a company pre-IPO.

This is just my personal taste. Please don't think that I'm trying to be prescriptive. You can trade places with Mr. Zuckerberg if you like. I'm just giving you my thoughts of a better example.

now I'm at -2. Would you please explain why ramen noodle, aqui-hire, ..., facebook can't be replaced with

ramen noodle, aqui-hire, ..., zynga (i.e. post ipo, valuation 6B)

or ramen noodle, aqui-hire, ..., instagram (bought for 1b).

Why do we have to use the company loads of people are saying will fail, and which has to start from a baseline of private equity deals that have already happened valuing it at 50 billion?

This is approximately the amount of money Microsoft has in the bank. How many sales does Microsoft make per year.

This is an enormous responsibility to his previous backers and those who believe in Facebook. I hope for him that everything goes right and he makes a great IPO and remains at the head of company that will always be worth more than that.

But why pick an example where he's under pressure to achieve that. Can you imagine how devastating it would be for the day to come when facebook is sold for 5billion? That would mean that 90% of its valuation would have been "squandered".

baselines and anchors are incredibly important. I think you guys are just not failing to appreciate the pressure on him to stay on top.

tdr2• 14 years ago

Come on!

Yeah, he'd loose the "shine" but how many people have his experience and ability to deliver? (not to mention skillset).

What happened to failure is part of learning?

vsprabhakara1• 14 years ago

Plenty of things go wrong everyday at companies like FB that people don't see from the outside. If tons of things go wrong, and FB fails (whatever that means), entrepreneurship is the biggest thing Zuckerberg will have left.

bmelton• 14 years ago

Done? Really?

He's a proven winner, at this stage. He's got billions in revenue, and took a startup from "the kids at that one college" phase to being one of the most used applications on the planet.

Facebook has more users than Microsoft was able to sell copies of Windows 7 to.

I think "done" is a knee-jerk response, as I'm betting that he wouldn't have a hard time finding a team, or funding, or be hampered in any way in his ability to execute on whatever he decides to do post-Facebook, even if he screws it all up.

mdda• 14 years ago

Pretty soon it'll be a public company, and there will be all sorts of institutional forces at work : If they mess up the entrepreneurial vision, no-one will be able to blame him (and make it stick).

wtracy• 14 years ago

Even if Facebook goes down in flames, I fail to see what would stop Zuckerberg from going off and launching another startup. Explain to me why a failure at Facebook would automatically mean that no one with money would ever invest in a venture of his again.

If that's not what you mean by "done with entrepreneurship", what do you mean by "done with entrepreneurship"?

tdenkinger• 14 years ago

Forgot one: "Go for profitability, make poor decisions, bounce along the bottom for awhile, and then liquidate."

The most likely path.

davidw• 14 years ago

A few 'case studies' and some data would make this a lot more interesting discussion.

its_so_on7• 14 years ago

I would frame this as, Let's hear them!

HN is the right place to ask...

kposehn• 14 years ago

Some friends of mine went through the same process and got to actual value. They chose the cash machine and did fairly well - to this date they turn a fairly significant amount of cash and do very well.

The regret they still have to this day is it didn't fit with their life goals. They each wanted to keep doing more things, but they are tied in and cannot exit that easily. Several of the founders would like to move on, but that option is several years off.

I think the lesson I've learned is that as entrepreneurs we should look at those options based on our goals in life. If you'll be satisfied doing the same sort of business for a long time, then the cash machine is open. If you're not, look for - and work towards - that exit.

One of them said to me "The path to your exit starts at day one; people you meet today could be your potential acquirers/partners tomorrow."

[edited to show the last line was a quote]

ChuckMcM• 14 years ago

Nice post. I tell engineers itching for promotion a similar story. Once you are demonstrating you can be promoted you have to ask do you want to be. The standards of evaluating your work change between code monkey and senior code monkey.

As it is with startups, as you grow the expectations of what you can do also go up. So doing just as well as before when you heard feedback like "cool, innovative" becomes "is that all they do?" as Scott Mcnealy told promoted folks at Sun, "one step up, one step closer to the door."

cperciva• 14 years ago

Isn't this largely determined by the number of employees? My impression was that for internet startups the valuation to # of employees ratio tended to be close to constant (since when valuations rise companies raise more money, of which almost all gets spent on employees); which suggests that the valuation to # of founders ratio is proportional to the total # of employees to # of founders ratio.

Out of acqui-hire stage

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