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Comment by TeMPOraL | Hacker News Reader

I used to be very bitter about acquihires, and startups planning for exits from day one. But maybe - maybe just to retain sanity - it's time to look at things differently. Maybe SaaS startups should not be treated as actual products, but just as mere temporary experiments. If the company fails, the product dies. If the company succeeds, the products gets killed. But, however briefly, we get to see some concept implemented in software, adding to the list of things that could be done (but usually aren't).

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It's really like the big company is outsourcing their R&D. The alternative would be to run dozens of experiments internally. Since most companies don't have the people power to do that, it's cheaper to just wait until a startup appears that solves their problem, or wait until they're successful enough to validate a market.

So, VCs are essentially funding speculative R&D, and big companies are buying successful results? This view sounds consistent and reasonable. Thanks for putting it this way.

I've seen the head of a business unit in my large organization not so subtly hint to a Director that Problem X is something that we need to solve in the next 18-24 months, but we don't have the budget properly allocated to do it ourselves.

Lo and behold the Director shortly leaves the company to found a startup aimed at solving Problem X. Eighteen months later we buy them, aquihiring back the director and some engineers who left with him to start the startup.

The head of the business unit knew he couldn't get the approval from the board to solve Problem X, so he basically outsourced the risk and in the end the director and his engineers ended up with a nice chunk of change and their old jobs back.

I don't suppose with broad stroaks what niche they filled? Just curious.

That's pretty much how a lot of medical R&D happens. A lot of startup don't even bother trying to go market and big companies are cutting down on R&D. One consequence of this is that the big players get more and more entrenched and a lot of regulation is customized to their needs.

In tech it's also pretty sad that small startups with a good product still don't feel that they can make it on their own but instead prefer to be bought up by a bigger player who then shuts down their product.

A good team that ships product is still extremely valuable, even if it had no product-market fit. If you can aquihire them and put them to work on new ideas, it's still much less risk vs. having to bootstrap a team from scratch.

Very true. I just think it hurts innovation. In today's environment IBM may just have bought Apple and Microsoft and closed them down.

True, startups that go for long haul are very brave. However doing something for a couple of years and getting a big win can’t be discounted.

May be those people really hate working on the startup and all they want is a big fat exit. That is reasonable.

That's actually exactly what is happening in the market. R&D budgets at big companies are nothing in terms of market value when compared to small companies.

To put a little wrinkle in it, it's both big companies outsourcing R&D to pick from the winners, but also tax payers subsidizing the R&D through R&D tax credits.

That might be a good idea. My chief concern is the exploitation of users and how to reframe things as an experiment. My guess is that it's hard to do without driving away potential adopters who don't want to be screwed when you disappear.

My general sense is that experimentation startups are inclined to think, "F the users. They're our tool, not our purpose."

> My chief concern is the exploitation of users and how to reframe things as an experiment. My guess is that it's hard to do without driving away potential adopters who don't want to be screwed when you disappear.

I'm still all for driving away potential adopters. The default understanding, that startups are putting out real products, is hurting adopters that grow their workflow around some SaaS offering, only to have the rug pulled out from under them. I'd much prefer if startups were up-front about their real goals, though I realize this won't happen, as it goes against the whole premise of fast and massive growth.

This is likely a middle case, not enough traction to get next round of funding as a viable product/company.

I personally use Astro on my iPhone (just uninstalled this morning when I got their notification). It was good app, but no way for them to get any money from me.

It's really hard to build a product AND a predictable, profitable, repeatable growth model that VCs want to fund.

Yes. But I'd find it better if they would rather just say in short "..and we are shutting down our service/apps. Whatever. Bye" instead of paragraphs long bs condescendingly trying to explain how it's better and how they are going to change the world and discover lemonade on Mars because they have "strategically" decided to "refocus".

Yes, those "incredible journey" communiqués pretty much form the definition of "adding insult to injury".

just like there is a difference between a feature and a product there is a difference between a product and a business.

Much of this world is R&D done on spec because big co's have difficulty innovating internally.

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