Well, congrats to Marco for having a successful and sustainable business where he has the option and leverage to decide what he wants to do when these offers come knocking.
Most startup/bootstrapped companies are not in that position. Most end up failing and winding up with nothing, but there are some that will end up with these talent acquisition situations.
Remember, both sides (the acquirers and the acquirees) have to agree to the deal. Google doesn't just come along and say "we want to acquire you for your talent" and the other side has no say in the matter.
In this situation you are faced with a choice. Talent acqs happen because a) the acquire target is not really doing that well, and b) they have a group of people that work well together that the acquiring company wants to keep together to do great things under their umbrella.
Given the choice between: keep working on your low-to-modest traction product which isn't producing a lot of revenue and wonder how you might pay rent next month OR a multi-million dollar check/stock offer at a large, successful company... which would you choose? I would take the check in that situation. Sometimes you can't achieve your world-changing vision before your investor and personal money are gone.
The goal of a company should be to succeed and be self-sustaining, of course. But sometimes that doesn't happen, and these talent acqs happen for a reason.
I didn't get that from Marco's post at all. I heard a developer saying "stop blaming indie developers for accepting generous offers from companies and start supporting their products instead".
I got a similar vibe. Also I DID support sparrow. I told absolutely every person I know with a mac that they should use sparrow. Every computer I setup at work and for friends I installed sparrow by default. I have tweeted about loving sparrow. I'm really not sure what more I could have done other than wear a sandwich board around with their logo on it. That STILL didn't stop them from being bought out...
That STILL didn't stop them from being bought out...
I wonder how the poo-pooing of anything that isn't a $10m+ funding or $1bn+ market cap business on sites like HN encourages people to think "well, hey, perhaps I should go join a business like that if mine can't be."
Which brings up a great digression: the app store gold rush has left us in a situation where it's no longer feasible to sell high-maintenance, low-market software directly to consumers. Consumers will buy games and media in high volume, so you can sell those at a discount. But email clients? Photo apps? Nope. The only way to make that stuff is to sell it as some kind of "cloud" service where you make your money on eyeballs elsewhere. And even then you generally can only make it big that way as part of a larger product suite (c.f. Instagram).
I'd look to the open source world for good geek tools, honestly. I think expecting people to sell them to us in the app stores just won't work. No one will buy this stuff at the $50/seat the developers would have to charge to avoid the Google and Facebook buyouts.
That's exactly it. Though to be fair, I pulled the $50 number out of you-know-where. The point is more that the caramel-latte-priced software model only works for items with huge volume.
Worse yet, say someone looked at sparrow dying and wanted to clone it, because it looks like there's a business there. Now they'll be pinched by people being cheap as shit on the upside and google migrating some of the best features into their presumably free iphone client on the low side. So I think google has now poisoned the well for better gmail clients on mac/ios.
What didn't you get? Both Macro's post and the parent are reasonable and non-contradictory. Marco says "I was only able to reject those offers because Instapaper is a healthy business" and the parent says "Well, congrats to Marco for having a successful and sustainable business".
My point is, you are disagreeing with two people in agreement. What you "heard" is a miscalculating brain that projected sentiments that don't exist.
Could be I misread the tone of the article. Perhaps I was reading it through the lens of everyone being upset about the current state of acquihires on the "Sparrow acquired by Google" thread.
Even so, if you take his advice and do what you can to support software you love to keep it alive, in the long run it may not be enough. Either way, my comment about why these things happen still stands.
> The hard part is coming to terms with what is actually sustainable. It takes a while to figure that out.
Exactly. And if it takes longer to figure out than the money you have to burn, then why not at least try for some sort of exit before giving up completely?
I obviously can't speak for Marco, but I think what I take umbrage with is when developers plan this out from the beginning -- create a product/company that drives just enough attention to ensure an acquihire. The result ends up being pretty detrimental to the community.
Given the choice between: keep working on your low-to-modest traction product which isn't producing a lot of revenue and wonder how you might pay rent next month OR a multi-million dollar check/stock offer at a large, successful company... which would you choose?
I would also choose the latter. I'll be the first to admit I'm not trying to change the world or 'disrupt and industry' or anything lofty like that. But I think there are quite a few people who would eschew the big check for the opportunity to do something tremendous, and they deserve to be lauded.
Is this something you can really plan out from the beginning? How many millions of developers would love to be able to create a product that drives enough attention to ensure an acquihire?
Who knows, you might be right and some developers might be able to think of an idea, build it, and market it successfully enough to get the acquihire they want (along with a big paycheck), but I suspect most just want to build a product _someone_ finds useful.
I know quite a few developers who only work on stuff that they hope will result in an acquihire. Can they guarantee it? Of course not, but I feel it's a pretty selfish approach to building something that's not just for your own use.
For example, in today's "the new digg" feedback survey, I told them I will not use the service until they have a sustainable revenue model (they happily tout their current lack of one), for this reason - the last thing I need is yet another service I like to be bought and then shut down. Granted, I don't believe they're starting out with the goal of being acquired, but this whole "useful stuff goes away because the people building it have no business sense" is pretty annoying to deal with.
if there were developers who were good enough to have any confidence that they would be acquired for their talent, i suspect they wouldn't need to work for google to make their money.
Maybe it is to the point now where it is disingenuous for a company NOT to have a banner on every page stating if they are open to investments or acquihire? At least users would know there is an intention/desire/dream to head for greener pastures if given the chance.
It is quite alright to disclose as a small business owner that things are slow or somethings are not quite going to plan. If you've got a userbase that loves your product, it is amazing what goodwill can do to help find a solution.
You guys go realize that it is ok to dissolve a company and in the case of a software company, release or open-source the code right? If the service was popular, someone will pick up the torch and carry on with it.
I think almost every company would have to have such a banner. Everyone has a price. Even Marco ("and they didn’t want to pay enough"). Some prices are higher than 'the market' wants to pay right now but that doesn't mean there isn't one.
Yep. If I offered Marco $500MM with the sole condition that I could take the Instapaper source code and live stream my burning it with a blowtorch, I think we can safely say he'd take the money.
Shouldn't that banner just be implied? Yes, company X is open to investments or being acquired if the right offer comes along. This should not be a surprise to anyone.
Should we require employees to wear a sign to work everyday saying that they will leave their job for a better one if the right offer comes along?
Sure, it wasn't meant to be snarky. I think a lot of folks simply have vastly different measurements for success. Some think it is binary meaning either total success or total failure. Others define multiple levels of success. Tie money and success together and the resulting discussions can be quite inflammatory.
I've seen a few folks chime in here already that one of the reasons they work for themselves is that for them freedom is greater than money. Not everyone agrees with that but wouldn't some personal and business interactions benefit from a bit more transparency of goals or stated missions? If you want to shoot for the stars, financially speaking or regarding market coverage, then tell me. That's great and I applaud your enthusiasm. If you are happy just providing reasonable service and expect to make a reasonable return then tell me too. At least that will allow me to make a somewhat informed decision about possibly interacting with you. Don't make us guess as most people are terrible gamblers.
Certainly people have different goals and ideas for what constitutes success. However, any company is for sale for the right offer. Conversely, any company looking to sell will turn down an offer that's bad enough. The owners may to even know what sort of offer they'll accept or reject until it's made. So, I don't know how you could add the proposed disclaimers, or how they would be useful.
I'm not sure how any of this relates to wedding rings, but I assume that's not too important anyway.
My S Corp. is not for sale. Neither is my 501c3 which will dissolve with my passing. Can you explain to me how "any" company is for sale for the right offer?
The diamond ring is a silly simplistic example of where some people don't have a price. If my spouse has a 5 carat diamond band, does she subscribe to some idea that if a 6 carat diamond ring were offered by someone else then that must surely be a better opportunity and "sell out?"
Some individuals don't have have a price for some things in life.
My work is my life and hence my 501c3. Either I'm fulfilled that I'm able to "do what I want" or I'm just a stick in the mud. I also don't plan to retire.
We can substitute work/employment for anything that you value. Family? Religious/spiritual beliefs/non-beliefs? Are you saying you'll stand for some value/idea/principle...up to a certain price? Nothing is verboten?
Yes, of course. Each situation is different, and making a build-and-flip company from the start is another thing entirely. Usually they have free products and no business plan. In this situation, though, the two companies that are being bought today both had paid products and paying customers. My 100% speculative guess is that they didn't have enough traction or revenue to keep it up at their current rates.
I don't think this was a plea to developers to not sell up, I think it was a plea to people to support small companies to make not selling up a more appealing option.
Ehh, maybe the last sentence implied that (though it could be read both ways), but most of the article read like a humble brag about Instapaper being successful enough that it doesn't have to bother with this type of situation. That's all well and good, but it sort of rubbed me the wrong way.
Personally, I think that software should be protected by copyright only if its source code is placed in escrow and made available (a) when the copyright expires or (b) when the software ceases to be commercially available / supported (just as you can legally photocopy copyright books and pay a nominal per-page fee if they're out of print).
The purpose of copyright is to provide a limited monopoly in the interest of creating, in the long term, a public good. Without the source code, we never get the public good. Under this proposed law, Sparrow (and other, similar, products) would have to become open source once it was unsupported, or would not be protected by copyright in the first place.
Exactly. Closed source binaries are protected by "copyright" the way written works are. But written works are useful in and of themselves, whereas closed source binaries really aren't. It's the useful part -- the source code and algorithms -- that we want to become a public good, not the incomprehensible black box.
To get copyright protection you should be forced, eventually, to give away the good stuff.
Interestingly, in the early days of software development a lot of programmers didn't quite know what they needed to do to protect their software under copyright, and some I know personally went so far as to print out their code as books and deposit them with national libraries.
I really really like the idea of non-commercial use of a copyrighted work being legal 1 year (or so) after a copyrighted work is no longer commercially available. If it's not commercially viable, then copying it isn't going to lead to a loss sale, and it means that a work isn't locked away for 50 years.
In this specific case though, Sparrow was far from a low-to-modest traction product. Judging from their ranking history, they've been consistently in the Top 50 grossing overall on the Mac App Store[1], and Top 20 grossing utilities on the iPhone[2]. That's likely worth $2000-3000/day in revenue.
Those numbers are sustainable if you have a small team (1-3 people), but I'm not sure how big Sparrow's team was. Either way, I would say that they were in a very similar position to Instapaper, except the only difference being they had raised some VC funding (with all that implies regarding needing an exit in the future).
In Sparrow's case, though, one has to say that it looks as if they had a sustainable business. After all, they were always in the top 30 of the App Stores. That should equivalent to a lot of money.
Most startup/bootstrapped companies are not in that position. Most end up failing and winding up with nothing, but there are some that will end up with these talent acquisition situations.
Remember, both sides (the acquirers and the acquirees) have to agree to the deal. Google doesn't just come along and say "we want to acquire you for your talent" and the other side has no say in the matter.
In this situation you are faced with a choice. Talent acqs happen because a) the acquire target is not really doing that well, and b) they have a group of people that work well together that the acquiring company wants to keep together to do great things under their umbrella.
Given the choice between: keep working on your low-to-modest traction product which isn't producing a lot of revenue and wonder how you might pay rent next month OR a multi-million dollar check/stock offer at a large, successful company... which would you choose? I would take the check in that situation. Sometimes you can't achieve your world-changing vision before your investor and personal money are gone.
The goal of a company should be to succeed and be self-sustaining, of course. But sometimes that doesn't happen, and these talent acqs happen for a reason.