Yahoo Acquires Bread, Will Shut Down The URL Shortener That Earned You Money | Hacker News Reader

Yahoo Acquires Bread, Will Shut Down The URL Shortener That Earned You Money

techcrunch.com

35 pointsdaegloe55 comments

I just don't understand the logic behind aqui-hires. If a founder starts up his own company, and if he is very serious about it, he will put in everything he's got - his passion, his vision and his hardwork. It becomes an integral part of his life somehow.

Now, suddenly a corporation pays the founder a large sum of money, makes him shut down his company, literally erasing every single connection he had with his creation. Now, no passionate founder would like to let someone destroy his own company, his hardwork and passion. But even if he wanted the money, and he thought if it's a good compromise, no passionate founder will think nor share the same vision and passion for the corporate owning him as much as he had for his own company. Obviously most of us startup because we don't want the corporate life and we want something different. So, to aim to get into a corporate by means of a startup is quite contradictory, no?

So, in essence, how does the corporation justify the investment for a semi-passionate founder whose product has just been destroyed? They pay billions in some cases, only to realize that the founder doesn't share his old vision and enthusiasm anymore? How does this work? I will gladly love to be corrected on this one. Someone with experience, please explain this cost justification to me!

Cheers.

The acquiring company gets the entire staff (or at least everyone who comes along). Assuming the company being acquired has built up a decent product, you can see the acqui-hire as a recruiting move, where you're hiring on a group that has shown they can work together, ship product, and all the members have already been vetted by somebody else. The purchase price is really just a recruiter's fee and hiring bonus bundled together.

And that hate their bosses' guts for ruining the thing they just spent a chunk of their lives to do and were proud of, and now it's all turned to nothing. But since they need money and they're offered too good a deal to refuse, they swallow it and get in line. I'm not sure it' the best way to acquire talent. Of course, that implies people cared about the thing they did, but isn't that the kind of people you want to get?

I've certainly seen in the past the founder give it a year or two, leave, take anyone worth taking with them and then start over doing the same thing again. Successfully too.

Well, there's one thing when the gig runs over and people look for another thing to work on. But the parent post talked about recruiting the whole team, and as it often happens, just in the middle of successful and growing project - that's the principle of acqui-hire, find somebody who is currently successful and hire them out. If it's just a team looking for a next thing after previous one run out of steam, there's no "acqui" part here since there's nothing to acquire of value, it's just a regular hire.

That's why it makes sense for the acquirer to buy. Neya was questioning why it made sense for the founder to sell.

Founders in this position usually sell because they can't raise any more money and the next best option is to shut down the company because they're out of money.

With an acqui-hire, at least you find a soft landing spot for some of your employees and your investors can tell a nicer story about one of their investments getting acquired (instead of getting shut down).

Thank you! That was insightful. Cheers.

I doubt all (or even most) founders are passionate visionaries. If the product in question was a life changing invention, then yes, I am sure the founders would be more than happy to have their whole existence and sense of identity revolve around it.

Here we are talking about a URL shortener that made revenue from ads: hardly an original or inspiring project. The guy's stated goal is "to help social media influencers and publishers better monetize their online content." Not exactly dream material here.

Let's be honest here, being bought for a substantial sum and maybe getting a job was exactly what the founder was looking for.

In a way, though, aren't people whose idea is to get acquired for a substantial sum of money even worse targets for an acqui-hire? At least with passionate visionaries whose current idea is unprofitable, you're presumably buying them with the idea that their rare interest in X can be redirected to offering unique insights into a somewhat-related project your internal team is working on, and the hope they'll be so enthused with that they stay beyond their earnout period.

Otherwise, you're just overpaying for commodity engineering talent, and it's engineering talent that prefers startup environments that you're overpaying for.

     (momentumOfStartup > momentumOfAcquirer) ? "acquire" :
       (passionOfAcquirer > passionOfStartup) ? "acqhire" : 
         (moneyInTheBank || scalableRevenue)  ?    "ship" : "pivot";

In this case, it sounds like the product may have been circling the drain anyway. If so, the founder just saved everyone from unemployment and got them a fat hiring bonus to boot.

> Obviously most of us startup because we don't want the corporate life and we want something different.

I'm really not sure how solid that assumption is, to be honest! Sure, a lot of founders are super passionate... But others seem to enjoy the thrill, or like autonomy, and some even are just in it for the (admittedly somewhat irrational) expectation of a serious pay day. So, not necessarily a contradiction depending on the founder!

> others seem to enjoy the thrill, or like autonomy

Which is exactly what you don't get in corporate life.

I have. *shrugs

That's lucky! I think most people who need this thrill and autonomy have mainly bad experiences from working in corporations.

Your passion can turn into your job remarkably quickly. After a couple of years we ended up with a year long contract all neatly laid out which meant, a) there was no longer the fear of money running out and b) after a month all the exciting stuff was a distant dream. You find yourself thinking about the next thing. If someone came along and offered you a decent amount of money to finish what you were doing and then leave, would you take it?

Capitalism! Hooray!

"recommends users switch to dominant URL shortener bit.ly"

Often old links can't be changed – easily or even at all. (Tweets can't be edited, for example.)

URL redirection is such a lightweight service that Yahoo/Bread should commit to either redirect indefinitely or ship the mappings and domain off to someone else who will.

Normally, I'd disagree, but part of starting a URL shortening company would seem to be a commitment to keep it working in the future, partially because its so easy and partially because URLs shouldn't die.

Charitably, we'll say they have a billion URLs. Each mapping is maybe 8bytes->256bytes. So they have a max of 264GB of data. That would fit on a heroku postgres dev plan, and the code to run it would take a single engineer half a day to put it on heroku.

still not zero cost

Sure, but with 6 engineers it would be the polite thing to do.

They could also just join 301Works[0], who seem to some degree affiliated with the Internet Archive and will keep on running the redirect if they are given technical control of the domain.

[0] http://archive.org/details/301works

While I agree this is not a huge engineering endeavor and Yahoo could do the Internet a solid by making this work, our free dev databases are limited to 10k rows (and, as the name suggests, intended for development). Please don't put a billion in them.

Fair. I was just trying to find a thing they could stick this on for basically nothing. The $49 plan would have been fine too.

FYI, I didn't notice this limitation on the pricing page.

Oof, you're right--sorry about that. The addons page [1] has the right pricing, but our own pricing page is incorrect. I'll make sure we get this updated. Thanks for pointing it out!

[1]: https://addons.heroku.com/heroku-postgresql

No, a URL shortening company was a commitment to breaking the internet by adding redirection. The URLs should die to discourage the others.

It's not the right solution, but URLTeam is stepping in to archive the links[0]. They estimate 121M links, and it'll be a shame that there's no easy way for a user to automatically look up the link from URLTeam when bre.ad is gone.

[0] http://archiveteam.org/?title=URLTeam

Frankly, I hope they don't, for the simple reason that we need some high profile link breakage before people learn to treat URL shorteners accordingly (that is: avoid them whenever possible if they're outside your own control).

Really bugs me the kind of ideas that getting funding. Some of us have viable businesses that need funds to scale but just don't have the right pedigree.

If you really need funds to scale you should be looking at business loans and financing, not venture capital. Talk to banks, show them your books, provide receipts, let them talk to a few customers, and you'll have 12 to 24 months growth money out the door no problem.

Unless you are using the word "scale" to mean prove your business model, then yeah, your hat is in the same ring as all sorts of harebrained ideas.

pretty sure it was acquihire

It seems you're implying that VCs - people who invest money for a living - care more about pedigree than profit.

Now I don't mean to imply anything about yourself or your business, but is it possible there might be a different and perhaps simpler explanation for whatever you're bugged about?

He didn't imply that at all; if M&A execs also care more about pedigree, then pedigree is a great way to drive a VC exit, especially compared to building a business that actually makes a profit.

Acquihires dont move the needle for VCs.

Depends on what you call an acquihire.

That's like saying F's don't impact your GPA. The reality is that returning capital does materially impact returns. The median VC is in an asset class whose returns are pretty poor.

I think you're saying that they move the needle down? That's not how it works: only the returned money counts, so if you return none, or only a little, the needle doesn't move up.

Its called return <on investment>, so yes it matters. Absolute returns are fine, but force lager returns from winners to compensate for zeros when measured on an ROI basis. And all VC's are marketed on ROI, not absolute returns (for obvious reasons).

ROI is based on absolute returns. But more importantly, they gain actual dollar amounts from a sale. If they invest $3.5m from their $200m fund, and it returns $5m, they could care less. They're looking for the company that returns $50m or $350m.

The post I was responding to was saying that VCs were motivated by acquihires ("a great way to drive a VC exit"). Debating the semantics of needles and ROIs is pointless. VCs are unmotivated by small gains and small businesses, and wont even invest in a company that can't promise to be valued above $100m one day.

Your making silly assumpyions about VCs and how they operate, ones that you can't justify. An easy exit that returns 20-45% on a 1-2 year investment is a no-brainer if the only other option is going to zero in a time-wasting pain-in-the-ass situation. That is quite distinct from saying that this "ideal" investment sold to LPs. And its quite distinct from rational "binary bets". While VCs screen based upon threshold potential returns, the probability of being a 10x company <even after passing the screen> is order of magitude <10%. So, its silly to say that all vc exits are large exits. But since exits have more prestige than chapter 7s, disquising your failures as exits has <value>. If you can do this with non-dilutive financial returns, you a strategy that may be better than the alternative/s.

He implied VCs care more about pedigree than about the idea.

I implied that it was much more likely that his idea/company/metrics/space/personality/etc was the problem. VCs are motivated by money - they'll look past all sorts of other things, including pedigree, if they feel they will make a great return.

Having dealt with a dozen or so VC's in multiple startups and seen how they're working, I have a terribly hard time picturing what not "having the right pedigree" might look like. While there are certainly the odd investor that may be swayed by superficial factors, there are many more that generally are not.

Assuming you're a reasonably normal person with no severe personality defects or problems with hygiene to put people off from the outset, it is likely that you are simply targeting the wrong VCs for your type of business, are not pitching it right, or your business is simply not as great from a VC perspective as you believe it might be (which does not necessarily mean it can't be a great business for you - but a VC will be looking for high returns fast, and that excludes a lot of businesses that still provide people with a nice living).

Find our where your local startup people can be found (user groups, meetups etc.), and approach some to get a frank outside view of your business and pitch from someone who have themselves gotten VC funding - you might be surprised where it is you're falling down, and it could very well be trivial if you're lucky.

> it is likely that you are simply targeting the wrong VCs for your type of business, are not pitching it right

I think we've found the problem. I believe there is a disconnect between founders who have the ability to pitch and those who have the ability to grow a business.

I am on this internet thing a lot, and I have never once heard of or seen a link to bre.ad

If they are being acquired and shut down, but the Bread employees are joining Yahoo... isn't this an "Acquihire"?

If anyone is missing Bread, my friend made a service that is exactly like it: https://shrinkonce.com/

> ShrinkOnce allows users to take a link to a file, website, or video and lock it with a survey

That sounds terribly annoying

What amused me about the bre.ad overview video ( http://vimeo.com/23834665 ) was the 'shortened URL' example which maintained a www prefix...

That's all that amused me.

Congrats to the team. Title made me double take for a second there.

"Yahoo acquires bread, will serve in company cafeteria?"

No go. Marissa wants them to eat cake.

They could have been toast from running out of dough. Luckily they found a breadwinner to help them rise to the top.

So what's in this for yahoo?

Reply on news.ycombinator.com