Except outlawing acquisitions by larger tech companies will absolutely reduce funding and incentives to start companies, and result in less products, less companies, and less competition.
- Product life-cycles become short, consumers are weary of anything new. How many times have you seen product launches here on HN where the top comments are worrying about sustainability? That either there will be a rug-pull for consumers in the future, or they just plan to be acquired and shut down.
- Larger companies continue to have no incentive to actually improve their product and compete with others if they just purchase everything in the market.
"Aim for the moon so if you miss you still end up amongst the stars."
The actual _goal_ is to be an independent successful company, but getting bought is the back up option that provides a safety net. If it was success-or-bust (no "-or-get-bought") the risk calculus would not make it worth it. It would make the American economy much more conservative and much more like Europe.
Unless you are thinking of real companies that would be affected by this ban? Retail stores don't care about this ban. Companies that sell real products wouldn't care. If they sell real software services and plan to turn a positive profit rather than exit this wouldn't impact anyone other than unicorn chasers, which are bad for everyone.
So by your own definition, real companies are affected by this!
It's not that far. A bureaucrat will decide if you can exit the way you want to. Still want to fund this venture?
> And we are soooooo far from having a shortage of tech startups.
Because there hasn't been a fear of them blocking exits.
It's not up to the bureaucrat but to the courts. The FTC doesn't "approve" or "reject" deals--it can just take legal action to try to stop a deal, but that still gets adjudicated either in a federal court or in an FTC administrative law court to a judge which is appointed independently.
https://www.ftc.gov/enforcement/merger-review
https://www.ftc.gov/legal-library/browse/administrative-law-...
Depending on specifics, the EU stopping blockbuster acquisitions in the US startup ecosystem feels ripe for abuse.
FWIW, I think there are good reasons to limit tech consolidation, including this one. But anyone should realize that it will reshape the industry in unpredictable ways, including some that harm "real" consumers and builders.
If anything, IMHO, we've been too lenient with anti-trust in Tech in particular over the past 5-10 years. This just dials things back a little, and makes it so that "hard to quantify" risk is a little more likely than it was before, and certainly a little more likely than zero
I don't think Adobe / Figma specifically is an "otherwise obvious deal" precisely because it has such obvious anti-trust risk. The fact that this merger was even announced is all the proof I need that we were being too lenient. Figma can still sell to any number of huge Tech companies
Blocking acquisitions creates precedents.
In fact, there are all kinds of things you can't arbitrarily do because it hurts consumers, both physically and financially. This includes strengthening industry monopolies which has time and time again demonstrated that it causes incredible harm to entire segments of society.
I don't think you can take a hypothetical worst case and make it apply here. You could also say that we shouldn't have governments, because look at WW2 and all the war they declared.
Adobe buying Figma wouldn't cause incredible harm to entire segments of society. It's barely even a monopoly, in that Adobe doesn't really do what Figma does already, and there is incredible potential in just making another Figma competitor if Adobe ruins Figma.
However, as a customer, I absolutely hate this. Instead of finding a way to actually make the product/service self-sustainable, they just increase the number of (usually) free users. But once they sell, normally the new owner either shuts the service down or turns it into crap.
It just happened that mergers and acquisitions turned out to be the cleanest, easiest way for founders to hand over the reins. In days past, companies would go through this transition process internally, often by succession through the founder’s family. The founder may have been a very entrepreneurial type, but the child who was raised to be the successor was more of a managerial type. When it worked out, anyway. Sometimes none of the founder’s kids were suitable. Or the founder tapped the wrong kid to take over.
If this is the liquidity event that Figma were betting on from day 1 that's their mistake for not foreseeing regulators being unhappy about it.
I get people are dying to stick it to the big tech cos, but the reality is that the long-term effect of actions like this is reduced funding and less new, disruptive companies – and strengthening the situation for the cash-rich behemoths like Microsoft, Google, etc.
We were promised a radical new world, what we got was a couple of apps for fast food delivery from McDonald's.
Last one: I promise that I am not trolling here: What about psuedo-self-driving that Tesla and a few others have in cars now? On an expressway, it is pretty amazing -- hands off the wheel, talk with your friends with no worries of distraction.
This is not as much about Figma, which is big already and will be fine, but the 100 other potential Figmas that might not even been started yet. They will have more difficulty finding funding, attracting employees with equity, etc., when the scenario 'big tech co acquires company for lots of $' doesn't exist anymore.
Why would anyone go worth at a small company for equity if there's no chance to get liquidity? Why would investors invest? This decision might improve the short-term situation of the market, but over the long-term, I can only see how it benefits the big companies, which rely on today's cashflows / RSUs to attract people.
Are you saying that the business of "we make a thing and we ask for money from our users for said thing" model cannot work?
> Why would anyone go worth at a small company for equity if there's no chance to get liquidity? Why would investors invest?
Presumably because they hope the company become successful and it sells many licences and they get a share from that pile of money.
I'm saying that companies like Figma, which has raised $333 million dollars in venture capital, at up to a $10bn valuation, cannot exist if those investors don't see sufficient options for liquidity.
And given that people strongly value companies like Figma, as evident in this very thread, that would be a bad outcome all in all. The only market participants for whom this wouldn't be a bad outcomes would be big, established businesses that have to fear less startup competition.
We value Figma the product. I couldn't care less about how much money they raised.
This is why I'm asking if you think it is impossible to make a Figma like product financed from you know the users paying for that product.
Ok. But do you think that is the only way it could have been built? Somehow you are sidestepping that question.
> and strengthening the situation for the cash-rich behemoths like Microsoft, Google, etc.
It certainly isn't good for Adobe as they will have a strong competitor in Figma to deal with.
It is good for Adobe: they'll be forced to make their products better.
...I hope!
Which they thought was harder than spending $20 billion acquiring a competitor.
Adobe's despised reputation in business practices makes it hard for users to choose Adobe when any other creative option when it is available.
How are you okay with MSFT? The logic is not very sound
Let's say you're pitching your startup to a potential investor. Would you pitch it as "the next Adobe" or "something Adobe might want to buy"? Which one would you be more likely to invest in?
I get your point, but that is not really the right framing because that is not how to pitch your startup.
Tell me what it does, what its long term vision is, how and by when you’ll make money, what’s your moat, how you will grow.
Instead, smaller companies can start and slowly get bigger while getting bigger. Affinity suite is a great example. While their photo tool is not my cup of tea, designer is great, IMHO.
I doubt very much if this will stop funding of new companies except perhaps at the level of Uber/WeWork.
How about you go and fling yourself in front of a bus
Anti-trust is not a new thing, it's even considered a foundational aspect of competitive capitalism by some thinkers...
We should be encouraging way more medium-sized companies, that operate sustainable business models, make money for their founders and employees, and aren't subsidized by cheap money. I think if startups actually had to sustain themselves we'd see a lot less grift and waste in VC.
For me, yes, I see the obvious argument that more money leads to more (and faster) innovation. But it can also result in an economy that is too tightly coupled and dependent on the might of a few massive companies, whereas an economy that is distributed across more smaller businesses is more robust.
At the extreme, you might imagine South Korea: a country that is highly consolidated into one or two major cities and propped up by massive, economy-shaping corporations. I don't think anyone would disagree that Korea made massive economic strides in a short period of time, but I think there's much more debate about the long-term health of the Korean economy and people now that their continued prosperity is so centralized.
And, of course, there's the consumer angle; though I can't claim any scientific methodology, my impression of the sentiments surrounding this merger are that it was pretty popular with Figma's investors and employees (understandably so, as they stood to gain from the merger), but was deeply unpopular with their customers. You could make the argument that "a Figma owned by Adobe is better than no Figma at all," but consumers have seen it all before at this point: a good product is acquired, and then either a) the pricing model changes, b) the rate of innovation slows down, c) the product is ultimately abandoned somewhere down the line, etc, etc. None of these outcomes are essential truths, but they are common outcomes of companies getting larger and larger to the point where a business unit that is otherwise healthy is deprioritized because it is not profitable enough or growing fast enough for the larger parent to care; or, conversely, the smaller parts suffer because the larger parent encounters trouble and can no longer sustain their acquisitions, even if they are keeping the bloat afloat.