* People - buying a ready-built high-performing team is cheaper than trying to assemble one from scratch.
* Patents and IP - if it is the idea which is valuable, you don't need the product.
* Competition - the start-up is (or could be) an existential threat. Buying is a cheap and legal way to shut them down.
* Customers - getting the start-up's customers on to your own platform. No need for the old one.
* Ego - buying a start-up is a big deal and helps people feel good. And maybe get a promotion. There's no rationale for buying other than short-term internal metrics. So the product gets terminated quickly.
Another is “My company has been bought by private equity, who’ve given us N years to make the company profitable.” I’m not sure why it happens, but sometimes the recently purchased company goes on their own buying spree. (Maybe they’re given money to spend buying companies?) During the buying spree, the post-acquisition phase isn’t necessarily thought through and some companies get closed.
But people working there are often great.
You can't just hire most of them. So first you pet their ego with some cash & startup success narrative and only then hire.