Should We Celebrate Acquisitions?

Companies that get an "exit" are mostly designed to do that, including literally every VC funded company. If you're working at a startup, you probably know if it's one that is being built with the goal of an exit. So, like it or not, if this is what your company is for, it's a win (barring a liquidation or aquihire) so it should be celebrated. Rarely is it the end of an era, it's literally a destiny.

Every acquisition is different. To the layperson, every acquisition is a success and people think that almost everyone in the company is "set" after an acquisition. However, the reality is, in many acquisitions, nobody makes money -- not even the founders. A lot of times, the founders even lose their dignity. I had a classmate who had the highest of aspirations. He wanted to build a billion dollar company just like every other founder these days. His company was acqui-hired. He always took it as almost an insult when other "more successful" people in our circle congratulated him on his acqui-hire. In regards to the company being acquired by a larger company, the product sometimes heads in a very positive direction, and many times, the opposite happens as well. This post asks us to answer a question that is so broad that it makes no sense.

Companies and their products aren't sports teams. They don't provide only an intangible sense of belonging and competitiveness. We build our lives on the things they produce (whether small or large), and we are systematically pushed into doing so.

So no, a company being acquired is not something you should feel an obligation to celebrate unless you're invested. It almost always means a re-alignment of priorities, if nothing else, that will shift their product away from why you use it in the first place.

Some acquisitions are for the underlying technology, not the product.

Some acquisitions are for the team, not the product.

Some acquisitions are of the brand, with product in a supportive 2nd place.

Some acquisitions are for the customers, with product in a supportive 2nd place.

Some acquisitions are for the product, but to be tuned for a different customer market, context, bundle of other products, etc.

And some acquisitions are for the product as is, with intentions of improving the product on a trajectory compatible with existing customer use. But with greater resources put behind sales, marketing, development, polish, or other useful aspect.

--

Only the last reason results in a pure win for existing customers.

So from a customer perspective, or a product love perspective, most acquisitions are mixed bags at best. And potential product/service-cancellation disasters at worst.

Recently, I have been trying to identify software I liked that was NOT ruined in some manner by its company's acquisition. I'm sure I'm forgetting successes somehow, but at this point it's a list containing one highly debatable item. So, for me, no.

Obviously an acquisition is often profitable for someone or other, but for me to believe an acquisition to be a good thing in some broad sense requires convincing me that it’s worth the resulting additional concentration of power. I’m generally speaking against more concentration of power in almost every context, so it’s got quite a lot to prove

I think that there's something to be said about how a successful business that grows outside of the Bay Area hegemony can be an important source of community growth, and an acquisition can dramatically undercut that. It's great there is a one-time cashout but something important is lost in the process.

This style of blogging is most beautiful. An observation accompanied by a why. There’s much to note about a potential ‘thesis’ this author could have penned, but instead left us to fill in the gaps. We need more content like this.

To answer the call, I’d agree, it is perplexing that we celebrate the acquisition when often times the event leads to an undesired change to the underlining product or service. In finance, it was traditionally taught that mergers/acquisitions are rarely successful in a managerial and cultural sense… so the lesson that it does end up being net negative to the organizations does seem consistent across domains.

It may be interesting to look at different types of acquisitions as well, maybe those without venture funding and those with, to see if there is a ‘quality’ that differs the two

I don't care at all about corporations or what they spend money on. No corporation exists to make the world a better place. If that happens it is just a side effect of them filling some market. It feels weird for anyone to be a fan of a company at all.

I think, even though the company gets acquired, the service to the customers never really ends. I take it more like a retirement, you proudly build something, you are happy about it, now you want to either slow down with your work, take a break or move on.

I might be wrong in understanding this, but I think if they made it to the point where other companies could consider acquiring them, it should get celebrated :)

Personally, I would think there are two answers to this:

a) the "we" in the question is exclusive, i.e, it only includes those that are part of the deal. In this case, I think "maybe". It brings to mind a perhaps slightly seemingly unrelated tale of how, prior to the current Paramount+ show, Halo was to be a film made by Niel Blomkamp, when that project was killed due to paramount's acquisition of the rights after years in development hell, a celebration was held by those rightfully glad to be free of shit management and the chance to move on. I have seen similar incidents in tech, but I don't want to elaborate.

If the "we" is inclusive, than the answer is no, no one is even slightly obligated to celebrate other's business deals, society, as is, seems to demand we celebrate far too much already.

If you want to build a company from scratch and run it like a community service, more power to you. When I bust my ass for a company I want to get rich, and I work for companies that are designed as such. No one stops anyone from making a non profit or working in academia.

If a company acquired another company to stifle competition, that’s usually bad. In every other case, it should be good. Many companies simply would never form if the opportunity to get acquired didn’t exist. Some are only able to reach scale by combining with a larger company, or with another product. And sometimes, an area of the market is oversaturated, and even reducing competition can be beneficial to consumers if it means a more sustainable outlook for firms, industries of scale, or clearer choices.

It depends on if the company commits to integration the company and customers rather than a simple shutdown or aquihire.

Tf the customers still have service without too much interruption, then we should celebrate because a larger organization can amortize the operational cost and ensure the product can live much longer without relying on founder heroics.

Case-by-case, standpoint-by-standpoint.

Seems to me this isn’t something you would want to build a too simple philosophy around.

I'd argue that most acquisitions are aqui-hires. Aqui-hires occur because the company failed in some way (unless it was designed to just be acquired, then I'd argue it was a terrible business to begin with and they were just betting on luck).

> It’s been a while since I started viewing the process of building a company as providing a service. Not as in system service but as in community service.

I love/share this view, I hope it catches on more broadly

> Should we celebrate acquisitions? [...] everyone congratulates everyone else

Are they? Postmark didn't mention anything about celebrating or congratulating. They did say they were "excited [...] Postmark will [...] become even better". And it took "nearly a year of soul searching and questioning" so it seems more introspective than the champagne popping party the blogger seems to have inferred. I think they're carrying more cynicism into this than is actually there.

Unless you're naive, there's strong incentive by the parent company to ensure customers are placated so things are spun as a success for that reason. Is the blogger questioning the function of Public Relations/marketing?

Because, it's a thing, ya know?

As a buyer of software, we rarely celebrate M&A. Prices go up and support quality goes down. The only silver lining is if the original company was going under.

Some celebrations are acknowledgements of irreversible change.

I will answer your question with another question.

Have you heard of Oracle?

Maybe not the the acquisition itself but for what it represents. If someone is willing to pay to acquire something that your built it is usually a proof that what you built is useful.

no

Betteridge's law strikes again! acquisition is always about capital concentration and thus more efficient use of said capital, and rarely about whatever crack they sell to the underlings. When economy reaches certain scale the products are interchangeable and it's 90% in capital and finances. it doesn't matter whether you're selling fish or chips.