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Comment by tptacek | Hacker News Reader

I totally understand where you're coming from, but I suspect that what's happening here is that team acquisitions provide vivid examples (and, in particular, long agonizing will-they won't-they suspenses about killing off the service) that create an easy narrative for something that is always happening all the time anyways.

It just is risky to do business with startups.

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"...long agonizing will-they won't-they suspenses about killing off the service"

I think this is the main differentiating point between 'failing' and 'acquihires' (from a user's perspective).

If a company is simply shutting down, there's some sympathy for the team and it's known that the service will stop. With a talent acquisition, nobody really knows what's going to happen to the service (maybe even the founders don't know) and that extra level of uncertainty is off-putting. [1]

Eventually, that extra level of uncertainty transfers over to the List Of Reasons Not to Work With Startups(TM).

[1] This is also true of straight acquisitions but there's a reasonable expectation that the acquirer is purchasing the product as well as the team.

It definitely makes for a more wrenching story, but it's hard for me to see how failing outright is somehow better than selling the team and keeping the service alive for 6-9 more months.

Perhaps it's because acquired companies tend to be more useful and more popular than companies that fail. So the cumulative disruption is greater for the acquihires than for the failures.

Or in other words, I would sacrifice many many startups to get EtherPad back again.

true one

Hard to believe that a team that knows it will be able to be acquihired won't be phoning it in and slacking off. Same as people do when they have taken finals and know that grades don't matter anymore. If you know failure is at the end and not some big prize and do over you will naturally try harder.

Not trying to suggest either is better. Just thinking through why people (including me) might react to them differently.

You don't "do business with startups". You do business with other businesses, and expect them to be serious about their propositions.

You can't will away the extra risks carried by immature businesses. This isn't a moral issue. Some companies mature and stabilize around viable businesses; most don't.

if you're talkinga bout a b2b transaction, no. your business negotiates your terms well with the startup to ensure you're innovating but not going to be significantly impacted if the startup goes under.

In semiconductor startups, you sometimes need to secure "second source" agreements with a bigger business (that could be your eventual acquirer ) that assures they'll takeover manufacture your existing silicon if they go down.

In our case we had a second-source partner until our acquisition that had "rebadged" parts available. It was annoying, but it's sometimes the only way for a startup to sell to big multi-million dollar customers.

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