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Comment by drclau | Hacker News Reader

This is not an example. This is an explanation of how it could happen.

Can you share an actual case? Such as, a startup that went through this.

Lulu.com - book self publishing. Discussions between Amazon & Lulu led to the reproduction of every use case over the following 24 months. I worked at Lulu.

Yes (sort of - I can’t share the name because this was a friend’s startup and I don’t want to gossip explicitly) but this exact thing happened:

Amazon went through an acquisition process and on the day of closing, as everyone was in the room and documents were being signed, Amazon reps came back from a break in the meetings and said “Oh sorry for the delay — we’ve actually got an internal team working on this already. Our mistake. We’ll still do the deal because there’s some value here, but we’re going to lower the price by 20%. Take it or leave it.”

(They did the deal, but man, f-that.)

Amazon’s flash sale site, my habit, was launched this way.

Source: I worked for a flash sale company they did this to.

What is/was the site?

Having been involved in the other side of these types of transactions usually the large company is actually interested in making the purchase because buying a successful product is easier than building your own even if you're something as big as Amazon. however often during Discovery you find out major problems with the company that you want to acquire that make it become pointless to actually do it. usually by the time something like this happens and a large company is looking to make an acquisition there already a good portion of the route down figuring out what they would have done in the first place. the Delta on building a flashlight over Amazon's general retail presence isn't that huge so in a lot of cases they would be looking to acquire interesting pieces of tack or the customer base as a way to bootstrap their version. If during due diligence that showed to not be feasible then the deal wouldn't go through. They're also very likely to be talking to several companies in a similar area.

I'm not saying it doesn't happen but I'm just explaining what happens on the other side.

I've also seen some areas where we used a technical due diligence team so that there was no IP crossover and it turns out that the company that we wanted to acquire was either way too difficult to onboard due to the way that they built their systems or they just wanted way more money then we were willing to pay because our use of their systems was different than their grand vision and they were pricing on their grand vision. also in one of those cases we were playing the two companies off of each other for price and then decided not to build a product at all.

And sometimes like the atom bomb all it takes is a due-diligence person saying there isn't much here for everyone else to realize that it's actually quite easy to build but it was very expensive and difficult to prove that you could build it in the first place. See Groupon for example of the explosion of daily deal websites after Groupon proved that they could "make money" off of it.

I thought Woot.com was an early player in that space.

It would be unlikely that anyone would/could share public details about such a thing given the NDA (and potentially LOI) terms that are signed prior to something like this happening. It happens though.

Yeah. A small company I used to work for had a phase where Amazon contacted us and wanted to potentially partner up. CEO went and spoke at Amazon and they got to see our goodies and then nothing came of it.

I think that their intention was to duplicate what we were doing if they got on the other side and thought it was valuable.

Turns out the company was/is floating on investor money like so many startup ponzi schemes. I suspect Amazon just didn't think it was worth it.

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