Why I sold to Google | Hacker News Reader

Why I sold to Google

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45 pointsdanshapiro26 comments

"Why I sold...?" As if nobody would know that people sell something to get money.

Why is it only about the team and the shareholders? What about the general public that you were trying to help out with your product? I think they're actually more important than the other two - it's millions vs. a handful. They lose out more often than not when products are killed in acquisitions like this.

The lucky thing for the general public is that if there is an addressable market some other company will step in to service it.

I'm hoping that in time our startup http://www.happybuy.com/ will be able to fill some of the gap that the closure of Sparkbuy has created.

The history of Google acquisitions also shows that in many cases the acquired product is shelved and their ideas don't end up being used in any Google services. In such cases small startups like ours can help to service abandoned users.

I thought that was the rationale for selling to Google... it's $millions vs. a handful.

There seems to be this complete disconnect for most people as to why a business exists. It exists for the owners and the employees. Helping customers, or creating something a customer wants may be a welcome side-effect but it's not the _reason_ a business exists.

Of course you get the "pageant-effect" when you ask a business why they exist. They always have some altruistic reason as the "official party line" just like "miss somewhere" wants world peace. But businesses are bottom-line driven, indeed they have a fiduciary responsibility to optimize share-holder value.

There are organizations that exist exclusively for the benefit of the customer. they're called "not for profits" or "charities". We even give them a different name to show they're not a business. In their case the side effect is paying employees, but their _reason_ is to help customers.

Every time you use a "free" service on the internet you have to determine if the provider is a charity or a business. If a business they _have_ to have some sort of payment strategy. (Or, if they don't they quickly go out-of-business and the free-users will moan bitterly about that too.)

If you are not paying for the service you are _not_ a customer. You are a _user_. Customers trump users every single time. (Of course users may turn into customers, that's the precept of most startups. Equally this is the point most of them fail at.)

>> What about the general public that you were trying to help out with your product?

The general public were being helped only in as much as they fulfilled the business' needs. Google filled the need better (with cash), and so they became the customer.

Not all businesses are the same. What you're talking about is the standard business school definition of a business. In reality, businesses vary as much as their founders. Some are altruistic and genuinely want to help people and solve problems. Others are ruthless. If it's a public company, they may be bound by fiduciary rules, but private companies can mostly do what they want.

There exist real businesses whose primary goal is to help people, even to the detriment of profits, and many of those that don't have it as a genuine secondary goal. Those that have helping people just as the "party line" are dishonest. I would hope that people would shun those businesses.

Tell that to the IRS, when you show a loss for three years, yet keep going.

Is it a business or a hobby?

I didn't say it had to be run at a loss, that's a false dichotomy. A sadly prevalent attitude, though.

> Helping customers, or creating something a customer wants may be a welcome side-effect but it's not the _reason_ a business exists.

For many small businessmen I know, that is the reason a business exists. If they just wanted to make money, they would work somewhere on wall street and reel in bonuses. Why do they work longer hours for less money running their own business? For some, it's freedom and not having a boss. But for others, it's because they have some sort of vision for how they want to change an industry or society; and they want to leave a legacy of having done so, not just make money.

This guy is not leaving a legacy with his startup. Google acquired it and him and will/has buried his project.

What's more, it is why the concept of business exists. It's a system by which society can advance by efficiently using our individual talents.

>> But for others, it's because they have some sort of vision for how they want to change an industry or society; and they want to leave a legacy of having done so, not just make money.

Absolutely, and if that is the prime motivation then they should start a charity not a business. It's more tax-efficient for starters, and also more likely to attract like-minded people to contribute resources (time and/or money).

Open-Source projects for example are often clearly "not for profit" and incorporate, or align themselves with not-for-profit structures. The FSF, Mozilla foundation and a score of others spring to mind.

For the small businessmen you know, who do not care about the money (beyond their salary), who are out to build a legacy, they _should not_ use a business structure. If they do, well that still doesn't make them a "business".

If they're aiming to start from scratch, and create a giant business, so they have "succeeded" (think Hewlett, Packard, Johnson, Ford et al) then that creation still serves the needs of the owner - those needs are just not cash. It might be good for customers along the way, but the business exists for the owners' glory, not the customers.

Of course the vast majority of small businesses are absolutely, 100%, businesses. A small business may fit a person better than a big business, but it's still a business. If you take away the money aspect from most small businesses, they close their doors.

It's exactly like the OP said - the business exists to fulfill the needs of the owner and the team (if there is a team). Those needs are usually cash, but include other things like flexible hours, and not-having-a-boss and so on. When the needs of the customer clash with the needs of the business, the business always wins.

And of course there are _bad_ business people out there. There are those that will take calls at 1am because the customer demands it (so they say) but they don't place a value on it, or require the customer to pay that value. That's bad business, and of course it's very common. But you can't use that as a data point for arguing that businesses exist for the benefit of customers. Some owners even use their relative lack of success as evidence of their altruism. In which case recommend to them that they start a charity, get a board to oversee their salary, and get out of the way.

That would be a non-profit.

They're definitely not more important. The actual stakeholders come first b/c they were the ones who took on the most risk. Second came the employees who took a job for a company that might not even have existed in a year. Third came the soccer moms and the rest of the ordinary ppl who could care less if you didn't earn any profits and had to go back to working a 9-5 until you die of a heart attack when you're 60

I don't think Sparkbuy was that great an app, although their concept of "technical searching" was interesting. Neither I think online shopping is a path Google may follow in the future. I think this is just how the higher level hiring process at Google works: build startup, get their attention, get bought out, app switched off, welcome to Googleplex.

it looks like the startup's founder are joining Google as employees. According to Seattle Times, they will be working on Google's new mortgage, credit card, and bank account comparison site Advisor, which was launched last week.

http://news.ebrandz.com/google/2011/4061-google-acquires-spa...

I always wondered how these acquisition contracts are structured as far as the team goes, ie, if Dan Shapiro leaves before 2 years doesn't get to keep part of the money?

Anyone here with real experience on this kind of deals?

"if you look at the big picture world that happens to startups, there are really three things that happen: IPOs, acquisitions and bankruptcy"

This is why you shouldn't spend all your time creating a short-term business with the goal of being bought out by a bigger entity.

I suppose everyone has different goals, but mine is to create a company that will evolve and last for many years. This wouldn't even be possible if I wrote the next service based on Twitter or Facebook.

Agreed. These short-term business acquisitions, while exciting to read about, are not common. Most businesses take years to build and if you're not in it for the long run you're going to get bored or bankrupt.

As much as I don't like to drink the 37Signals juice, they have a strong belief and commitment to their business. This is a lot different than being an employee where you should always be moving around every few years (unless you have a piece of the pie). However, if you're the owner, be proud of what you're building and who you're building it for.*

* Could be for investors, but hopefully it's yourself.

wow! that was a really quick sale right after the launch. Mixergy had an excellent interview with founder Dan Shapiro in April. http://mixergy.com/dan-shapiro-ontela-interview/

>> What are you going to do inside Google? "I am still figuring that out."

This clearly states that I sold for money and reputation. But the bad thing is selling to Google is not like selling to Google in 2005.

When I am running a startup, I am running it really for just two constituencies: for the shareholders and for the team. And this was awesome for the shareholders and was awesome for the team.

What about the users? What about the users?

i bet money was involved, too

This isn't really a startup acquision - more like a talent acquisition. Google can easily create a similar service, and since they are the gatekeeper, they could just pump their site in front of everyone else in the rankings (like they do with YouTube).

Of course, I'd sell out too if I knew Google could accidentally punish me after a single algorithm change. No freaking brainer

"they could just pump their site in front of everyone else in the rankings (like they do with YouTube)."

Is there any proof of this? The same thing was said about knol/wikipedia, and that wasn't true at all.

No need for proof, just intuition.

Think about it: they can create any new website and instantly give it good Pagerank/TrustRank/whatever by internally linking to it from the Google.com domain. They dun even need to manually boost it.

I completely agree it's very easy for them to do that.

But no you definitely need proof, especially when there's evidence disproving you. For example: Knol/Wikipedia.

They dun even need to do anything except put a link to their new service on their main domain and it already gives them an instant boost. Which they already do for 99% of all their related services.

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