- You're running the successor to Bandcamp
- You're making good money, employ a couple staff
- Epic comes to you offering millions to buy your business
The rational choice is to sell. Would you choose the stress of running a sustainable business over the payout? I know I wouldn't.
There's no indication afaik that Bandcamp was in financial trouble before they got acquired. This is inevitable in the current ecosystem.
There are many people who would not f their users and employees over when given the opportunity. Be like that.
But the bigger point is that you conflate selling to a bigger company with more resources with “f[ing] their users,” which is just naive.
What did they do exactly? My music is there I bought years back.
Because that's what happened to a lot of companies who got bought out - eventually the MBA sharks wanted their returns. Minecraft, MySQL, StackOverflow, Tumblr, Reddit, TwiXXer, they all fell victim to enshittification.
Others just ossified with steady streams of Big Money coming in like Mozilla, Wikipedia or a ton of stuff from Adobe. Or they got closed down by Big Corp because they were no longer "profitable" enough like Google Reader.
Personally, I'm happy enough that HN still exists.
"I don't owe anybody anything"
"You're just naive"
These are the rationalizations used to justify antisocial behavior. It's nihilistic and destructive to society.
I've heard people espouse this kind of logic even when talking about employees who have worked for them for 20 years. They exchanged labor for pay and therefore nobody owes anybody anything. Yeah, right.
It's not naive, it's how these things go the majority of the time. I think that expecting otherwise is a bit naive.
But the reality is, I have other things I need in life too, and those things require money. My dad is working into his 70s, what if I could fund his retirement? What if I could pay for my brothers uni? Or for my grandma's nurse?
When our basic necessities are not secure, we can't always make the ethical choice. Until then, people will keep selling out.
Having a family doesn't "absolve you" from ethics, but it means that you have to weight doing right by your family vs doing right by your users. Most people choose their family, and nobody blames them for it.
I do.
If somebody has to do wrong by their customers to do right to their family, they've seriously messed everything up.
And no, they haven't messed everything up, society has failed them
Not to mention that COVID led to a steep increase in the site's traffic. It's possible that the added operational burden meant that Bandcamp was no longer the chill lifestyle business that it used to be.
If it was to make a few mill and never have to work again, sure, sell.
If you wanted to build something bigger than yourself, work with great people, feel accomplished, then why sell? How is that few mill going to get you those things?
A lot of founders regret their first sale because they realise they didn't want a cashout, they wanted to build something awesome
The operating costs include buying instruments/software/hardware, using a mastering service and pressing vinyl - all of which are not cheap.
They do it for the love of producing music - and watching their work sell out within _minutes_ of being released... which in turn inspires them to make another record (or ten haha!)
The thing is that the gap between "breaking even" and "life changing money" is huge for most artists. You wouldn't sell out for 50K per year, but 1M? Sell out for 2 years and you're set for life, then you can go back to making the music you love.
But very few artists can pull 1M per year, so it doesn't happen as often.
Believe it or not you can buy that. Though I'm sure there's some corporate backed, non-replicable, behavioral science study that says otherwise.
I don't believe it. That is, I believe it's true for some people, but not all. It's not true for me.
Buying stuff is not an accomplishment.
And here's the kicker: you can always go build something bigger than yourself after selling. Having fuck you money means you can make the ethical choice next time.
Edit: on your comment about founders regretting their first sale. I'm guessing most founders are also well off, and don't worry as much financially. But even then, regret doesn't mean they made the wrong choice. I regret exercising my Shopify stock while I worked there, but it was still the best decision for me at the time.
If you weren't able to make the "ethical choice" the first time, you almost certainly won't make it the next time, either. All of the motivations that informed your first choice will equally inform your next.
So it's not that choosing your family is unethical, but it does have consequences for your users. If family was taken care of them the ethical calculus shifts in the users favor.
The vast majority of founders I see are relatively self-sufficient already and live comfortably. They're founders because they're addicted to it, love making something new, and potentially are chasing that mega-exit. 10s-100s of millions, not a few.
It's possible that the founders felt they had accomplished this, and after spending 15 (?) years running it, were ready to move onto something else. I've sure as hell never stayed at the same job for 15 years. I'd go nuts.
They may have also felt some obligation to early investors, often who are friends and family or early employees, to get them a nice return.
They had what, 400 employees, so 675k per employee.
I understand that many of us would sell, I would probably sell too. But different people do exist. Valve didn't sell, for example, and I'm sure they were approached many times.
However, if Gabe's family had urgently needed money back in the day, would he have sold? Maybe.
That's what I'm getting at. You need to be in a very stable position to be able to turn down a big offer like that when it comes, and in general in our society we're always one or two emergencies away from being destitute on the streets.
Until we make sure people are taken care of, these companies will keep being the exception.
Besides, my point is that there are multiple options, all of them rational. There is no single rational choice.
If you as the owner are already wealthy 'enough', then that is not necessarily the rational choice. It depends how much you care about the future of the business.
In my dreams, if I ran such a noble business, I would hope that I'd have managed to extract enough value from the business to arrange for my own pension by the time others want to acquire it, so I can reject their offers and keep control to safeguard the business's integrity.
On the other hand, we are human. If the acquiring party makes an absolutely life-changing offer, it may be hard to resist. The story of Nullsoft and AOL comes to mind.
Until everyone in our society is taken care of by default, these noble businesses will keep being extremely rare.
Not necessarily. Whether or not that's the rational choice depends on what your goals are.