[1] https://www.propublica.org/article/inside-turbotax-20-year-f...
We would have more sound business plans and ideas. Startup culture would be more about creating entities that can exist on their own (adults) vs a danger to be let loose into an existing market. The later is a shakedown, but lets not conflate the shakedown with our own goals of seeing outmoded businesses getting replaced.
If we had free standing startups that can function on their own, they have the ability to replace existing players by being able to function long term and respond to changes.
If we create startups that are then sold to the incumbents, we perpetuate their hegemony. These large corporations are effectively buying organs to stay alive.
I love this intro:
Did you pitch for a t-ball team, because thanks for that sweet setup!
On topic:
Some businesses require so much funding up front that it’s not feasible. As always, there is a great blog post by Joel.
https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-...
And I wish I could take credit for thinking about the consequences of making it harder for companies to be acquired, but I got the idea from Ben Thompson’s (Of Stratechery fame) Exponent podcast.
(This link will take you to a website at the time stamp of the podcast if you don’t have Overcast installed)
> Another extremely strong network effect is proprietary chat systems like ICQ or AOL Instant Messenger. If you want to chat with people, you have to go where they are, and ICQ and AOL have the most people by far. Chances are, your friends are using one of those services, not one of the smaller ones like MSN Instant Messenger. With all of Microsoft’s muscle, money, and marketing skill, they are just not going to be able to break into auctions or instant messaging, because the network effects there are so strong.
There are clearly startups whose sole purpose is to appear to threaten an incumbent and then get purchased by either the incumbent or a rising competitor. Those startups are never design to operate in the long term or on their own. They might force small movements by the entrenched corps, but they don't transform industries.
The negative: - added friction to building a startup, since one exit path is harder.
The positive: - more focus on profitable companies, as opposed to ones that will only be viable if acquired. - a more competitive market, which might be better in the long run for start-ups
I don't think the question we should be asking, though, if the effect on startup culture. I think what we should be asking is: what is the effect on users/consumers?
To that end, imagine if the online ecosystem today included Instagram, WhatsApp, DoubleClick, Zappos, YouTube, Waze, just to name a few. Yes maybe some of them wouldn't have survived, but maybe that would have been the right thing to do.
And I think that's the question regulators should be asking too. Whenever a large company is acquiring a smaller one: is this clearly good for consumers or not? I mean, if Intuit can make a good, believable case that this is good for users (ie "Once we buy Credit Karma we can give all our users free tax filing) or something like that, by all means, that's great... but I doubt that's what's happening here.
https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio...
How would regulators know whether Apple acquiring the 100+ companies it acquired would be bad for consumers in advance?
Do you really trust regulators to be both competent and apolitical?
The positive: - more focus on profitable companies, as opposed to ones that will only be viable if acquired. - a more competitive market, which might be better in the long run for start-ups
That would probably exclude every single YC backed company.
Only two have gone public - DropBox and PagerDuty - and DropBox has never been profitable. I doubt any of them have ever been profitable.
I’m not saying that as a criticism to YC, just a statement of fact.
How many profitable VC backed tech companies were founded in the last ten years?
I was just arguing that providing some rules around acquisition of smaller competitors by larger companies with monopolies could push startups towards more viable business models.
Why is it important for the end users of the companies are viable and not the products?
Would consumers have been better off if most of the companies that Apple acquired, integrated into billions of devices and sold to consumers didn’t exist because they couldn’t foresee a viable business model outside of an acquisition?
Anyway, my argument for more regulatory oversight doesn't depend on ALL acquisitions being bad, so finding evidence that some were good for consumers doesn't necessarily negate it.
I feel like what we would end up disagreeing on though is whether we can trust regulatory oversight to do a good job of making that decision. I don't trust regulation in general, but in this case specifically, I'd trust it more than giving large companies free reign.
https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio...
Just some examples Next, SoundJam (iTunes), PA Semi (processors), AuthenTec (finger print sensor), Apple Music (Beats), Siri, etc.
Knowing Apple what is more likely, they would license tech or just create it in house? How do smaller companies prevent that? Patent trolling? What if the companies wanted to be acquired by Apple? Does the government step in and say you aren’t allowed to sell your business? Instead of acquiring the company what’s to stop Apple from doing an acqui-hire? Are you going to tell them they can’t work for Apple?
Government intervention in businesses unless there is a severe negative externality is almost universally bad.
Though ironically sometimes the solution to negative externalities is a (regulated) monopoly.
It amazes me that people on HN willingly want to give up their agency to the government.
What I (and I think others) are against is anti-competitive behavior. I don't trust the government a whole lot (even my party) but I trust it more than I would a company behaving monopolistically.
The difference is that the government has the power of law to compel me to do something. A company doesn’t. Given that choice, a government with less power is better.
It did lose money in 2019, but because of preIPO marketing and advertising. Marketplaces have great network effects and profit margins, seems like a very viable self sustaining standalone company. https://www.fastcompany.com/90418766/report-not-even-airbnb-...
It’s like WeWork’s “Community Adjusted Ebitda” or Uber’s “we aren’t doing as bad as it looks as long as you exclude 13 different expenses.”