What happens after Yahoo acquires you
37signals.com
37signals.com
Is it something every acquired company has to go through? Is there a right way to do this?
Yes.
a. Make it a fully owned subsidiary.
b. Don't fuck with it.
I am guessing it can work but founders/entrepreneurs aren't necessarily the best managers and are likely to get bored and be looking for their next startup. As a new owner of a company it seems to make sense to transition the senior management to people who are more suited to managing and running a company rather than those who like building a company.
This goes two fold for those companies who have primarily technical founders who are almost always unsuited for the roles in senior management.
Also, the issue isn't that the founders leave; it's that the energy does. Founders are always going to leave.
However, Reddit had some innovative founders, who came up with a new concept, then got acquired and eventually the founders left. However, due to its great team (and passionate community) it has continued to grow and become something amazing.
Therefore neither getting acquired or the founders leaving caused a negative effect.
By this logic, the maximum life of any company is about 40 years.
Walmart and ExxonMobil are two examples of companies that became gargantuan long after their founders had left. In fact, of the Fortune 5000, I would bet the majority no longer employ their founders.
If your team can't fight Romulans when you're down on the planet, you've failed as a manager, was the moral of the story.
Changes that don't improve the business should be removed. If management can't provide improvement, management should be removed.
It's as simple as measuring effectiveness and making changes that work.
Here's a question: Why do you need timesheets? You didn't before. What's changed? If you can't -- legally -- avoid them, at least be honest about it. And don't let them become a tool for petty tyrants. (Oh, and, good luck with that last part.)
The one before that said the timesheets were used to do reporting for R&D grants from the government.
Which, like any score-base system, leads to results being gamed rather than the underlying performance being properly affected. Witness the banking crash - traders incentivised for short-term deals and not (by and large or significantly) penalised for them going wrong later, so they inflate a bubble. Now we have armies of economists arguing for longer bonus vesting periods or for penalty clauses, but they're missing the underlying problem that the system simply doesn't work.
Then, when the timesheet dude shows up (which they will), just say no. When the meetings are being called, say no. It'll be a shitstorm, and lots of people will dislike you for getting away with it, but you should get your way if this happens soon after the acquisition (when someone way up stands behind the acquisition and can't have it go bad this early.) Let the shitstorm happen, and stand tall. I don't think any company would fire founders of a company they acquired a month or two ago.
I don't know, anyone know of cases where it happened this way? Or is being a wholly owned sub really the only way to have a culture that's separate from the parent company?
They did this, but took it to another level and kind of tortured the incumbent manager assigned to supervise them. It was the only time in my career I have ever seen a grown man cry at work.
One thing that always bugged me - when I ran Delicious, I had people submit a weekly status update (just a list of bullet points) to the entire company. That way everyone knew what was going on.
We got to Yahoo, and my boss decided to kill that.
When I got to Google, globally visible weekly status in bullet point form are part of the culture. I take this as validation.
As for timesheets, all that stuff sucks, which is why you need to think of work as "making money" first and "being fun" second. If some company wants to pay me a million dollars to fill out timesheets, that's their loss, not mine. I have plenty of fun writing code at home. If I get to do a bit at work too, excellent.
(Sometimes I feel like my current job is like this. I seem to spend half my time in meetings and half my time coding. This is a massive, egregious, insane waste of money. But it's not mine, so it's not really my problem. If I didn't go to the meetings, people wouldn't think I was doing any work, and that would be my problem.)
I've always wondered how that's useful to anyone. Judge me by the quality of work I do, but not whether I sit in the chair the required number of minutes.
That's also one of the rationale for constantly asking to do the same stuff with less (money, employees, etc...): because trying to measure efficiency is almost hopeless in most companies, just asking that 10 % improvements actually leads to actual improvements globally. You just don't know where exactly. The bigger the organization, the more efficient this inefficiency is in some ways.
Of course, in small companies, this is awful, because most smart people, especially smar engineers, really hate this way of working.
A couple of months of dutiful swiping later, one of the guys got curious and... found that it wasn't connected to anything.
(A bunch of people left shortly after.)
The program sometimes crashed.
I also had to fill out a paper timesheet, in case the computer one was wrong. My manager and I both had to sign it.
I printed a TPS Report cover and posted it on my cubicle in silent protest. And I happily moved on when the time came.
Oh let's not be overdramatic shall we ?
Civilization dies from a thousand papercuts, not a thundering blow. When the barbarians cut its head it's already dead.
That being said, timesheets are definitely one of those papercuts.
The timesheets are a symptom, not a cause, of the malaise that creeps over acquired startups. Timesheets correlate strongly with TPS Reports (don't forget the cover letter), long conference calls, labyrinthine procurement rules (sorry, you need to buy that widget from our preferred vendor), deeply nested org charts, zero-sum team performance reviews, and so on. It's an environment practically designed to kill productivity dead and drain the enthusiasm of the most dedicated employee.
Once you're assimilated, business decisions that impact your team become an MBA math abstraction to the parent company leadership. Time sheets are BigCo's mechanism for mapping what people to do top-down business objectives. The tops of most BigCo's think they have a strategy, but usually don't.
Also, there is something about timecard software that brings out the worst in enterprise software developers. I have never, ever seen one implemented well. I get to see a lot of them in this job.
If I could upvote that a thousand times I would.
Why o why is this so true? And why hasn't anyone done anything about it?
The problem I believe, is, fundamentally, the need for managers to justify their existence. Whereas other roles in the organization - engineers, salespeople, secretaries - have clear reason for their existence and work they can point to (code written, products sold, paychecks processed) managers do not.
The fact that nobody reads any of these timesheets and that project estimates based on hours are a complete nonsensical fiction are really beside the point. The point is that the very production of this work is taken as proof that the manager, too, is producing valuable work.
In small startups timesheets are irrelevant because everyone has their heads down getting on with the job. Managers exist, but the company can't afford to have people who just "manage". They do other valuable roles - whether technical or sales or office admin. The sign of a company "growing up" is when you suddenly have all these new people you have to report to, with ill-defined titles like "Product Delivery Manager" - and the timesheets.
OK, but why are timesheet programs so badly designed ? The hardest thing in software development is to design something that's ill-defined - in other words, if the purpose of the program is a bad one, it's really hard to build a good program to fulfill that purpose. Simple timekeeping software isn't hard but management have so many nonsensical requirements that the software increases in complexity and correspondingly decreases in usability.
http://poorbuthappy.com/ease/archives/2010/11/23/4827/data-c...
and
http://poorbuthappy.com/ease/archives/2010/11/27/4832/why-ge...
The best software can't be created in a factory assembly line with interchangeable drones.
If you're implying that Yahoo's MO is to acquire companies and convert them into pumping out hum-drum, mediocre software, well, that sounds about right.
Sometimes it's easy, sometimes it's not, but the thing that bugged me was that it eventually was used against you.
Mgr: "Oh.. well.. I see here you've only put in 38 hours on core projects this last week... this doesn't look too good to others."
Me: "Well, I was actually here in the building for 46 hours, but 8 of those hours were doing some other stuff that there's no timesheet entries for."
Mgr: "Oh... like what?"
Me: "Like answering questions from people in the building that have questions about some of the projects I'm working on - status updates, etc. Apparently you and the other managers aren't updating anyone, and they ask me."
Mgr: "That's not your job."
Me: "So... I should silently ignore them, or give them a canned response to go ask their own dept manager?"
Mgr: "yes. But that didn't take 8 hours last week!"
Me: "I was also doing some research on a couple new debugging tools."
Mgr: "There's no need for that - the senior engineers are making their decision next week about what tool you'll use."
Me: "OK...."
Mgr: "I don't want to see you make a habit of 38 hours a week from now on."
Me: "Ummm... the last 3 months I've been putting in 45-50 hours non-stop, and have been in on some weekends to work with some other people to hit the deadlines."
Mgr: "Yeah, that's great, but 38 hours..."
This is a composite of discussions I've had and colleagues have had with various managers over the years whenever timesheets are involved. YMMV.
I understand that it's still unpleasant to deal with that.
He did not want dishonesty, but probably would not mind some tweaking in how work activities are categorised in a timesheet.
Like once, in a sprint that took 5 weeks, the last week was scheduled for bug-fixes / quality assurance. I did nothing for 3 and a half weeks, finished my assignments in 2 days, then for a whole week I just fixed a couple superficial bugs here and there.
Reported time: ~ 170 hours.
EDIT: to expand on this point, the secret is in how you do the initial estimation. Hugely overestimate the small / easy tasks (explain with technical babble if needed) , then underestimate the difficult tasks. So not only will you secure lots of free time, but you'll also be that genius that finishes difficult tasks in 1 hour :-)
Heck, you might even be promoted to management; that's how all the cool kids in management are doing it :)
EDIT: Thought better of it and changed my message. But I still think your manager is a moron since he's unable to point out the above, and life is too short to work for people like that.
Also... I'm taking it too seriously? Over a 2 month period when, say, 400 hours are logged, but one week 2 hours are not accounted for in a specified (yet unspoken, hint hint, nudge, nudge) manner, and I'm taking it too seriously?
98% main
1% support
0.5% boss' pet task
0.5% other
All they want is for your time sheet to match that because that's what they've paid for. Some managers are smart enough to just tell you that, others (like the one you appear to have) don't like to say it for some reason. They should just automate it because the numbers you plug in are completely static.
It's just double booking, one side put in a "debit" for the project and now you're putting in the "credit" side saying it was paid. No one cares what you actually did because the exact moments you spent on the project shouldn't affect anything (assuming you're not a problem worker).
The places I've been without timesheets have generally been less stressful overall, and I think the 'fit things in to a timesheet' model contributed to that stress (for me and for others).
I used to get stressed about time sheets, same as you. Then I had a manager who told me what they were really for. Since then I always put in the stock work week, broken down how ever it is supposed to be broken down. Regardless of what I actually work. I keep my real hours in a personal spread sheet so I know how much time I'm over or under and actually work from that.
As a side note, this extra time you're working is just time thrown in the trash. No one is going to thank you for it and if everyone else is doing the same thing you wont even get any kind of promotion for it since it's not "above and beyond". I know, I used to work 60+ hours for a company. Up until the day they laid me off.
I can't say names here. I once worked at a rinky-dink startup, one of the early guys, we raised some cash, burned through it, and finally found an acquirer. The acquirer had been acquired by a larger company a handful of years earlier and essentially operated as its own entity and they wanted to "not break" us.
They essentially treated us hands off and invested in us, it felt great, we got raises, better insurance, new computers and such. The pressure of not worrying about the company dying was awesome. There were some things that bothered different people differently, we had to switch to their email system, they eventually came and re-numbered out network and kind of took control of some things we probably shouldn't have had control of in the first place. No one left, I don't remember anyone being too upset, basically everything was exactly the same as it had been, only we weren't going to die and they gave us more money..
A different sort of thing did start to happen though, we'd been on life-support doing what companies on life-support do, we worked as quickly as possible, cutting out everything that wasn't essential. We were now part of an organization with a name, a brand, a real sales force that was good, and some different expectations on our output. I think it became clear that we were putting out a different callibre product than what was expected from the organization as a whole and at that point that started getting more hands on and we initially reacted with paranoia. Probably cost the product about 9 months to a year and we probably should have changed some of the staffing, some folks just couldn't change gears.
In retrospect, if I could do it again from their side. They made fairly generous offers to the "brilliant engineers" to keep them there, think nice raises and then about $400,000 in various stock based incentives to hang out for 3 years. They should have been a bit more hands on early, explained what is expected, explained what the brand means, explains how if something takes longer to do it right then we're going to do it right rather than force it out and after maybe 6 months offered some folks like 1/3 of the stick-around-money to leave if they didn't want to be part of it, just vested it early if they wanted to walk away.
Seems like you want the dust to settle, things to calm down, then you want to tackle the cultural changes (and regardless of how close things are, there will be some) head on. And in my mind, if there are some bad cultural fits, then that just needs to come out, be addressed and have some sort of amicable way to part. If the culture change is one that involves going from the "Adult plan" to time-sheets, it's gonna hurt, in fact it just seems silly.
>we had to switch to their email system [...]
>basically everything was exactly the same as it had been
I disagree. Although I would characterize the behavior as far more hands-off than the typical acquisition, it's clear that the acquirer here couldn't resist the temptation to Fuck With the little things. Even the little things matter, but, as other commenters have pointed out, something like timesheets (arguably a very little thing in deed) are a symptom rather than a cause.
Yes I admit - I've always wanted time sheets. And they ARE a mixed blessing. They can have a strong negative influence on the "relationship" to your employees. I also have to learn my lesson(s). But I hold onto them for one reason: Timesheets were my revision history. When times are busy and the work is growing over your head, and you are sitting alone in your office, they can help you to understand what was done when.
They can become a very valuable historic document and planning instrument. Often the only way you can plan the future is understand the actions and errors you and your team made in the past,
It's literally like dropping the anchor from a sailboat under full wind.
1) Overture. If you look at the financial reports, nearly 50% of Yahoo's revenue is from search. They acquired Overture for ~1B
2) They acquired RocketMail (essentially Yahoo! mail). Most people I know, when they think of Yahoo, they think of Yahoo! mail.
So, while its easy to say they messed up many acquisitions (esp the infamous 3B offer for Broadcast.com), the 2 acquisitions they made is what keeps them "in the game" today. You win some acquisitions, you lose some. Just like investing, if you make few smart ones, it can easily pay off and create more value than the money spent on many failed ones. Same with Google - Youtube was handled very well, but many acquisitions are essentially just shut down or never integrated into other products(Dodgeball,Jaiku etc)
You sell your company for $50 million in Yahoo stock, which over the course of your two year tenure at Yahoo will see a tenfold increase in value up to $500 million and your team will use that wealth to go on to create a disruptive seed-stage funding group called Y Combinator.
Must have been an oversight. I can't imagine 37signals only telling half of these stories to make it better fit with their mantras.
http://finance.yahoo.com/echarts?s=YHOO+Interactive#chart2:s...
http://finance.yahoo.com/echarts?s=YHOO+Interactive#chart1:s...
When I bought my Yahoo stock, it went up 62% in the first five days.
These anecdotes will sound familiar to many people who have been through an acquisition. Acquisitions are not something any company is naturally good at, and they inherently threaten the bureaucracy of the acquirer. Despite good intentions, the corporate immune system usually kills off the interloper before it becomes established. Not to mention that the founders and best employees usually bail within a couple of years.
As hackers we tend to focus a lot on technical scalability issues. We love to work on things like NoSQL, the CAP-theroem, large scale caching and whatnot. But I think that the organization often becomes the bottleneck quicker than the web site. This is especially true now when we have services like Amazon AWS and GAE which helps us with the technical scalability issues.
So next time you work on that really cool memory optimization maybe you should ask yourself if you don't get better scalability as a whole if you focus your limited programming resources on features instead (so you don't have to hire that extra programmer to do that for you, since you work on your memory optimization).
I'd love to hear a Cisco Exec's opinion on their secret.
Relatively, it's been better than most acquisitions but things are definitely not that rosy.
The big exception has been Flip. Although they are a great company, their limelight was too short for a company like Cisco to get recurring growth over a long period with this push into the consumer space.
For our group it has been a good thing and we are happy where we are. Our group's culture is the same, we are engaged in the larger company strategy, and are excited about the upcoming year. We have had a couple integration points take longer than expected but that's what happens when you go from 50 people to a company of thousands.
YMMV I guess.
I do find the "there's no business model" talk in the comments pretty annoying. Of course we had one.
Were they trying to keep them out of the hands of Google? Did they do it purely for the eyeballs and thought with no additional spending they'd get their money back out of the property in X months?
I just find it hard to believe they'd do the same thing over and over again for no reason, but to lose money.
[1] Although this seems to be bombing somewhat at the moment.
- Team: the acquirer likes the people and believes they will add value if convinced to stay on board.
- Product: they like what they see, and they believe they can incorporate it into something they have in a relatively painless way. They think about what it would take to build it and it's mostly a time thing. They can spend the money but generating the momentum to build it would take too long.
- Traction: this basically determines the price, because a company like Yahoo believes they can plug something they like into their properties and get traction. Having traction already is proof that the product is great, and it commands a premium.
- Keeping it out of the wrong hands: yes, it's scary to imagine what would happen if a one-of-a-kind company fell into the hands of your competitor and they executed perfectly with it.
- Need to spend M/A budget: if you are the M/A person at a big company, your job is to buy what you can't build or hire. You can't say "there's nothing out there worth buying" because other people are buying companies (herd mentality if you will).
There are more factors, and there isn't a single one that determines a decision. A lot of people need to feel good about it and agree on the perceived risk and reward of the investment.
The time cutoff also leaves out the Overture, Inktomi, Altavista trio which made a ton of money for Yahoo, let them build a search engine on par with Google, and fueled significant growth of the company.
Finally, the article also ignores the fact than many, many internally developed products (of any internet company) have a lifespan of under 5 years.
It has to do with the nature of the acquisition. As you say, WhereOnEarth was killer technology, easy to integrate into everything that Yahoo did.
The "Class of 2005" startups that Yahoo acquired were not about technology, they were about having a different relationship with the users and creating common resources (photo library, tagged URLs, event information...).
That's a much more problematic kind of innovation for a company like Yahoo. It was alien to how Yahoo worked, and for many groups it was even a kind of threat.
Why does Yahoo do anything? It's clearly a company without a vision or purpose that is simply shuffling money and paper around in the hopes that onlookers mistake activity for achievement as the executives hope the kick the can down the street just past the next executive pay review and/or contract extension.
One regime excitedly acquires a startup. Shortly after, the large company's CEO is canned. The new CEO cleans house and brings in a new management team with a different vision. Startup's product is no longer a priority.
For instance, I think YC is far cooler than Viaweb.
I work for Yahoo, after 6 years of ('failed') startup work. I respect YC and pg immensely.
However, linking to this article that is written in 2010 that references the mid-1990s (except for a single mention of Facebook in 2007) seems a bit weak.
It doesn't bother me that HN folks dismiss Yahoo as a company, so much as it does that HN folks ignore Yahoo engineering. Hadoop, WOEID, Pipes, etc.
For me as an engineer that has worked for a few startups and companies that hoped to be acquired, working for Yahoo is great because we are exposed to a lot of engineering work that is optimized for large scale. I'm sure Google and others are doing a great job of this as well, but why is it an either/or situation?
WOEID seems pretty niche. I don't work with geo much, so I don't understand right away why I would want to use a WOEID over a simple lat/long. Who else uses WOEIDs, for instance?
Pipes would be approximately a billion times more interesting if it didn't have the commercial use restrictions and had a version I could get some kind of SLA for. If Yahoo is so proud of Pipes, why won't you let people build businesses on it? And why did you only post 2 blog updates about it in 2010?
Reminds me of Brew Masters when the owner of Dogfish Head, Sam Calagione, mentioned that he had an offer to sell off his company for a nice amount but in the end he would still obsess about the fate of his company, and the name he built up for it, that it wasnt worth selling.
Do we just keep being regular companies? Is there an alternative? How do we build things that matter (and require outside investment) and end in real change instead of just getting rich?
(This post is a good example of Poe's law...)
So, where do I go for online photo hosting / backup? Picasa / Web Albums isn't better, plus it's very desktop focused. Are there any modern offerings that can step into Flickr's shoes?
It also keeps my photos happily organized.
Related (Why Ten Million Dollar IPOs Matter): http://www.urgentspeed.com/applied_disruption/2010/04/why-te...
When the founders lose their ability to control the product and their economic incentives, then they're really fked.
Facebook has integrated their acquisitions' technology in some cases, but it seems they're mostly in it for talent acquisitions. They've done a good job so far in retaining (they're still pre-IPO) but we'll see what happens when they get old and some new hotness appears at school (might take 10 yrs)
Scorecards:
http://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and_...
If you're the initial owner you'll be happy to let Yahoo buy your product for multi-millions of dollars, and you'll be even happier to leave the company as quick as possible to start up your next app.
Its a pattern: sell, get out ASAP, start next project, (allude to what could have been).
"But today it seems like the old is doing the plowing. Let’s stop that. Let’s build great companies that are here to fight, here to win, and here to stay until the next generation after us comes along and kicks all our asses. And again and again and again. That’s how better happens."
http://37signals.com/svn/posts/1927-the-next-generation-bend...
That quote is from nearly two years ago, but it's just as relevant today.
God knows how many absolutely awesome bands were signed to major labels over the decades by A&R that "got it" only to be left high and dry when that person was fired or moved somewhere else internally. Very little new under the sun, I suppose.
Great read.