I'm sure there's some alternative universe where Yahoo bought Netflix and ruined that instead. It's not that they bought the wrong company, it's that they just don't get it.
I guess this is why they say a turnaround CEO's job is to "get the wrong people off the bus and the right people on the bus", and why "turnarounds seldom turn".
I want to avoid making these mistakes for my startup.
Every company, when starting out, tries to avoid going down this path (recall Google's "don't be evil" or Amazon's "it's always day 1") but they all eventually lose the spark, after becoming large enough.
Large companies who have lost this spark eventually start hiring consultants and agile coaches in a desperate gasp to regain it (much like estranged couples hiring marriage counselors). This usually goes about as well as you might expect.
I've never found a counterexample to this principle. I think the only real way to avoid it is to stay small.
When a company gives out its control to 3rd parties that are not involved in what the company does, and only cares about financial statements, it loses its spark. Not because they decided to lose it but that's how the market forces act: squeeze out as much as possible, for as little as possible, and call it a good day.
The only counterpoint to that phenomenon is what some large-ish private companies do: stay private, don't get investment from external investors who haven't bought into what the company is providing as value to society, don't get investment from people looking to make their money 2-10x in a short period of time (short being around 10 years).
The moment a company enters squarely into the current financial markets it's doomed to just become a carcass of whatever vision it had, it's now just another commodity.
Edit: and every startup founder wants to be different and not fall for this, I don't think many manage, after some rounds of investment it's not in your power anymore to decide that, your VCs and other members in the cap table control you.
"Silicon Valley" is such good satire exactly because it depicts almost exactly how that happens.
What kind of people do you want to thrive, and what do you want your business to do?
The worst problems happen with a public listing. Your biggest shareholders will be fund managers. They are judged by how well they do in annual rankings. Their incentive is to make the share price go up over the next few months.
The only way to avoid it is to stay private.
Financial incentive structures are very hard to get right. People will always find ways of gaming the metrics.
Google's biggest problem c. 2004 was that the suite of opportunities available to it on the Internet was far more than it had skilled employees to capitalize on. So they enshrined "leadership" and "influence" into their performance review system. You got promoted first for showing that you had the independence to tackle complex problems on your own; then that you could lead a team of people to tackle an even more complex problem; then that you could train others on how to lead teams of people; then that you identify the next set of complex new problems worth tackling; and so on. Worked great as long as the Internet was a big growth opportunity with lots of virgin undiscovered territory. But then when all the basic problems users care about are solved, how do you get promoted? Well, first you have to cancel a product that's working well. Now you have a big glaring complex problem that needs to be solved, so all your people can get promoted, move off the project, and then it can be canceled for the next cohort of promotions. And so on, until the only skillsets that company leaders have are "canceling products" and "creating technical debt".
Google basically built a pyramid scheme into their performance management system.
The thing is, this incentive system works on the level of the whole economy itself. There were plenty of companies (and open-source projects!) that did not build a pyramid scheme into their incentives. LiveJournal. OpenID. Semantic Web. RSS. PubSubHubbub. Bittorrent. Freenode. Where are they now? Well, they didn't build a pyramid scheme into their incentives, so they got out-grown by companies like Google and Meta that did. And this pattern extends back at least to the Industrial Revolution. Why do we have unsustainable car-centric suburbs based on polluting fossil fuels? Well, that technology grew faster than alternatives and then used their newfound wealth and customer base to convince cities to dismantle their trolley lines.
If the exit strategy is to get acquired, don't worry about it. You will make money and get to leave before the mess begins.
If your goal is to go public, it's almost guaranteed that you will end up in this situation eventually. Most of the corporate insanity is driven by public company antics and having to show growth every quarter.
The two examples I think of when I try to come up with "companies that don't suck" are Patagonia and REI. Both are private. In the case of Patagonia, the founder has spoken out against the quest for growth as it's a driver of so many bad things. I don't know much about REI but I'm sure if they went public quality would go downhill as well.
You are either serving people or serving Wall St - in my experience it's not possible to serve both.
Don't do that.
Obviously these companies run, but it’s all done by maybe 10% of the workforce who actually knows what they are doing.
Watching Tumbler and Twitter die because individuals essentially decided they didn't want us to have them anymore has been informative.
Tumblr yeah. The general format of traditional blogging was already in trouble and Yahoo simply chopped off what that audience appreciated.
On one hand I don't think Twitter was ever profitable, so there's not much inventive to compete. But on the other hand, I don't think even Twitter can survive a decade of implosion. Bluesky may not be as big in 2030 as Twitter was at its peak, but if Twitter is legitimately dead it doesn't matter.
My cynical take is that microblogging also becomes a niche and "content creation" on Instagram/TikTok et. All takes over as refugees retrofit a different medium entirely to what they desire to do.
Through it's history Yahoo! had the opportunity to buy a lot of successful companies, but they lacked the foresight to do so and trusted too much in their existing business. For a brief period they did manage to attract really talented people though.
You're objectively incorrect in that opinion. They just reported 247M global paid memberships. Highest they've ever had.
Objectively Yahoo is worth $27.32 Billion USD, 1/7th as much as Netflix.