9 ms·

Talent Acquisitions

367 points by davisml 14y ago

terhechte 14y ago
I'm the author of the popular Mac Instagram Client "InstaDesk" (http://www.instadesk-app.com http://www.instadesk-app.com) and I can only confirm this. The reason why I started this whole thing was because I was fed up with working in corporations and not being able to control my life. Now I can enjoy the sun during the day, outside, sitting at a lake, and work late into the evening - or vice versa work at the lake. Even if a huge corporation would offer me a lot of money, I still wouldn't want to join since I would loose so much more. Money doesn't make me happy, freedom does. So, as long as InstaDesk (or other, future, apps) generate enough money for me to survive, I really doubt I would sell (with the exception that if the offer is, just as Marco said, really good and the continuation of InstaDesk is guaranteed). However, a free life where I'm not obliged or controlled by anybody is just so so so good. (I say this after having worked in IT companies and startups since 2000). So yeah, support the products you love, and spread good news about them, and give them good reviews.
- tchock23 14y ago
  As someone who sold his company last year and is now experiencing life as a salaried employee again, amen to this... Freedom > money in the vast majority of cases.
  - metafour 14y ago
    I have this conversation with others and myself all the time. Money is nice but what is the opportunity cost of that money?
    - aeturnum 14y ago
      There are also opportunity costs to freedom. Viewing choices as a "freedom v.s. cost" is a pretty common model. I don't think it needs to be approached "freedom lovers" v.s. "money grubbers" dynamic. People have happily made both choices.
- Killswitch 14y ago
  Love this attitude, and I also checked out your app.. Good job! Beautiful and looks awesome. Makes me wish I was more of an Instagram user than I am.
  - terhechte 14y ago
    Thank you! It was quite a bit of work, but I enjoyed (almost) every minute of it so far :)
- Domenic_S 14y ago
  > Money doesn't make me happy, freedom does. Guess what money buys? The only problem (in this context) is that it has to be a fairly large amount of money, and all in one chunk. Seriously, if Facebook offered you $10MM for instadesk, under the condition that you'd have to work for them for one year, you'd turn that down? No way. You'd be silly not to take it, because you could put in your one year and then be free for (basically) ever.
  - terhechte 14y ago
    True, though in a situation I like that I'd take $100.000 away and pay a dev to work on my apps for that year, and probably continue working on it afterwards.
  - 2muchcoffeeman 14y ago
    There are probably levels of freedom though. I like producing useful things and would work even if I have $10M right now (I would also be less stressed and probably produce better work ...). So getting a modest amount of money annually, and increasing the freedom at which I can do my other things is also attractive. I think a lot of people really just want to be comfortable.
  - buro9 14y ago
    I think that is false. I think freedom is more like love... money can not buy it, you have to work at other things to get it. If you think money buys you freedom then you become a slave to money rather than a person living with freedom. I've recently quit the corporate treadmill and am working on a startup. I've gone from an annual 6-figure (GBP) income from my day job and projects, to an £8k income from one actually profitable bootstrapped company. I don't think I could go back to the corporate world, and whilst a VC firm is currently trying to court me I fear it's just a talent acquisition attempt. I'm not interested in any scenario that isn't me pushing my work forward. The only thing I'm interested in is the freedom to work today on something that I care deeply for and believe in. My entire existence is focused on one this thing: This idea I have must come into being. No money can stop me from doing this, and that is freedom to me. To, today, choose everything I do and how I do it. To be happy knowing I have no distractions just to put food on the table, to be able to dedicate myself to this. Today I can truly say that there is no amount of money for which I'd enslave myself again. Perhaps there might be such a figure tomorrow, but today there isn't. I live day by day, and I think that tomorrow I will feel the same way. One fear I had in the corporate world earning that large sum of money... "What if I never quit and follow my dream?", "What if I spent my whole life working to secure the ability to follow my dream and then my life ended?". If you can, go for the freedom today. Money isn't worth it, it's such a bad measure of success, status, happiness and worth. That said, if you execute your dream well and others agree. Then I think that money comes. So freedom may bring you money... but money won't bring you freedom.
- egillie 14y ago
  I'm with you on that. I'm doing a start-up just so I can enjoy the sun during the day, and work at night when I can't do anything outside anyways! I feel like now that we've got it backwards. We're not farmers, we don't need to work in daylight anymore...
  - terhechte 14y ago
    That's a really nice comparison. Never thought about it that way. It doesn't apply to all situations, but you're right in that many, many jobs could just as well be done during the night so that people can spend the day enjoying sunlight.
DanielRibeiro 14y ago
Being a long time instapaper user, thanks for sticking with it.
bvlaar 14y ago
This is very reassuring to instapaper users in this m&a environment. Thank you
jonathanjaeger 14y ago
I agree with the sentiment, but the difference between what you have (a healthy business, as you mention) and some other acquisitions is that some see the writing on the wall. True, some businesses throw in the towel too early for an attractive offer, but others know that without being the leader in a space they can't live up to their valuations, investment amount, or can't find a viable and sustainable business model for their product. It all depends on whether you're still having fun at your current business and whether it has a chance at succeeding. It's going to vary from startup to startup.
loeschg 14y ago
Yeah it's just a tough situation. Even as a developer, I'm pretty sure I'd have trouble turning down a huge paycheck to go work for a reputable company. I've never built anything that's had a huge fan base though. What are ways to show appreciation for a company/product you like aside from buying their product, tweeting an occasional praise, and liking their FB content? Is that enough?
- petercooper 14y ago
  Even as a developer, I'm pretty sure I'd have trouble turning down a huge paycheck to go work for a reputable company. I've never built anything that's had a huge fan base though. The situation when you have built a big fan base or other sort of "attention" asset is that taking a job is surprisingly risky. I had this situation with a potential acquirer. The job was awesome, the company was great, but the goodwill and potential I've built up is too valuable to part with lightly. Why? The worst case is you get bought out at too low a cost and then, for whatever reason, you're out of a job a month later. Now you have a little pile of money in the bank and.. back to square one. That's a risk regular employed folks don't have. This is why most talent acquisitions are in the 7 or 8 figures. It's enough money to eradicate the risk of taking on a full time job and losing one's hard-built business assets for most people (even low 7 figures each is enough to pay off mortgages, cars, and have healthy savings).
  - dangrover 14y ago
    This. I sold out (Etude), worked for a year or so, and now I just have money (not seven figures though). Have been floundering ever since trying to put together the next thing. Having runway kind of makes it worse, even.
    - petercooper 14y ago
      Whoa! The music app? I remember seeing that for the first time, had no idea Steinway picked it up. Congratulations man. I had a similar situation with one of my first businesses. Low six figure acquisition and then.. oh, what do I do now? It took me almost 4 years to figure it out(!) and now I'm back on my feet again. Good luck!
arrowgunz 14y ago
>I don’t want Instapaper to shut down, I don’t want to move my family across the country, and they didn’t want to pay enough So if Marco was paid enough, would he let big companies shut down Instapaper by acquiring it?
- vtry 14y ago
  100 million dollars!
- petercooper 14y ago
  While there are certainly people who would refuse to sell at any price (Zuckerberg was probably in this camp), I suspect the vast majority of people (even 100% ethical, moral, up-standing folks) have a price. Would I sell my business for $100m tomorrow even if the whole thing got destroyed in the process? I sure would (though I'd use the money to start a new one ;-)).
smackfu 14y ago
>If you want to keep the software and services around that you enjoy, do what you can to make their businesses successful enough that it’s more attractive to keep running them than to be hired by a big tech company. Nice words, but I doubt it matters. Sparrow got nothing but support for their entire company history. Every review was golden. Every user was a paid user. And they still sold out. (Or maybe Marco means people should join his subscription program: http://www.instapaper.com/subscription http://www.instapaper.com/subscription )
- tptacek 14y ago
  This is a series of nonstatements. Obviously, Sparrow did not get so much support that Google's offer was unattractive. Post as many gold stars as you want: if Google is outbidding the user base, it's hard to blame the developer for accepting their offer.
  - smackfu 14y ago
    You don't think a message of "support developers or they'll sell out" is a bit tone deaf today?
    - tptacek 14y ago
      No, I think the exact opposite.
  - reinhardt 14y ago
    Not that hard really. Not everyone sees life as bank savings optimization problem.
jazzychad 14y ago
Well, congrats to Marco for having a successful and sustainable business where he has the option and leverage to decide what he wants to do when these offers come knocking. Most startup/bootstrapped companies are not in that position. Most end up failing and winding up with nothing, but there are some that will end up with these talent acquisition situations. Remember, both sides (the acquirers and the acquirees) have to agree to the deal. Google doesn't just come along and say "we want to acquire you for your talent" and the other side has no say in the matter. In this situation you are faced with a choice. Talent acqs happen because a) the acquire target is not really doing that well, and b) they have a group of people that work well together that the acquiring company wants to keep together to do great things under their umbrella. Given the choice between: keep working on your low-to-modest traction product which isn't producing a lot of revenue and wonder how you might pay rent next month OR a multi-million dollar check/stock offer at a large, successful company... which would you choose? I would take the check in that situation. Sometimes you can't achieve your world-changing vision before your investor and personal money are gone. The goal of a company should be to succeed and be self-sustaining, of course. But sometimes that doesn't happen, and these talent acqs happen for a reason.
- Tyrannosaurs 14y ago
  I read this slightly differently. I don't think this was a plea to developers to not sell up, I think it was a plea to people to support small companies to make not selling up a more appealing option.
  - jazzychad 14y ago
    Ehh, maybe the last sentence implied that (though it could be read both ways), but most of the article read like a humble brag about Instapaper being successful enough that it doesn't have to bother with this type of situation. That's all well and good, but it sort of rubbed me the wrong way.
- jmduke 14y ago
  I obviously can't speak for Marco, but I think what I take umbrage with is when developers plan this out from the beginning -- create a product/company that drives just enough attention to ensure an acquihire. The result ends up being pretty detrimental to the community. Given the choice between: keep working on your low-to-modest traction product which isn't producing a lot of revenue and wonder how you might pay rent next month OR a multi-million dollar check/stock offer at a large, successful company... which would you choose? I would also choose the latter. I'll be the first to admit I'm not trying to change the world or 'disrupt and industry' or anything lofty like that. But I think there are quite a few people who would eschew the big check for the opportunity to do something tremendous, and they deserve to be lauded.
rpbertp13 14y ago
A talent acquisition signals something more than a job offer. It shows that you're able to conceive and build a product that people are willing to use. It also means that you've had experience negotiating terms. This is very important when/if you decide to take an entrepreneurial step after being at the acquihirer. All things equal, future investors are more likely to trust someone who has had an acquisition in the past. You're more likely to get press exposure. All these things are meaningless if you're building something no one wants, but they definitely help if you're on the right track.
tb303 14y ago
So now that I've paid for instapaper for iPhone and iPad, I don't have to give Marco any more money. That means the only way he stays in business as the product grows (being that I am not a revenue source anymore) is by either a) figuring out an additional revenue stream from the data or b) discontinuing the apps I paid for and charging me for new ones. The same goes for sparrow. These one-time purchase apps don't have continued revenue per user. So we can write rants on the internet all we want about "don't give in to the acqui-hire," but obviously the benefits of taking google's money greatly outweighed the future of trying to run a business by selling an app on the App Store.
- fceccon 14y ago
  Instapaper also offers a subscription plan http://www.instapaper.com/faq http://www.instapaper.com/faq If I remember correctly it adds search and the ability to use the full API by 3rd party clients.
- JeremyBanks 14y ago
  Instapaper isn't entirely without other revenue. The web interface displays ads, and he offers a $1/month subscription that improves some features. (I pay for it so that I can send larger compilations to my Kindle.) http://www.instapaper.com/subscription http://www.instapaper.com/subscription
  - wpietri 14y ago
    Yes. I subscribe not because I cared about whatever features he was offering at the time. (I think it was all about the iPad, and I've never owned one.) I did it because I wanted to make sure he was getting paid enough to keep doing it. Glad to see that he's happy and feels like he's making enough.
- smackfu 14y ago
  So what's the takeaway for us as users? Should we prefer free apps with IAP or advertising because that's a more sustainable business model?
- Firehed 14y ago
crazygringo 14y ago
So... how about open-sourcing Sparrow? Seems like that would solve a big part of the problem, no? Wonder if Google would let that happen.
- CognitiveLens 14y ago
  As much as the talent behind software drove the acquisition, Sparrow also had some very solid, semi-innovative features and a sophisticated IMAP engine that are now valuable technical/IP properties for Google. I would be very surprised if they open-sourced anything from this acquisition.
  - hokkos 14y ago
    The imap engine is open source : http://www.etpan.org/ http://www.etpan.org/
  - thibaut_barrere 14y ago
    I don't know: from earlier researches, it seems Sparrow is based on LibEtPan which is open-source: - http://www.etpan.org/libetpan/index.html http://www.etpan.org/libetpan/index.html - https://twitter.com/sparrow/status/6396505883676672 https://twitter.com/sparrow/status/6396505883676672
pclark 14y ago
http://www.youtube.com/watch?v=t5i7JDNACtI http://www.youtube.com/watch?v=t5i7JDNACtI
gwillen 14y ago
If I think you are inclined to accept a talent acquisition if offered, I _will not use your product_. Why would I? It's insane for me to trust my data to someone who's going to throw it away to make a buck. If you accept a talent acquisition, you will -- and should -- have a devil of a time getting customers at your next venture, having thrown away the customers from your previous one. Tread lightly.
- shazow 14y ago
  Do you not get any value out of using a product while it hasn't been shut down? Will you singlehandidly cover the developers' living expenses once the savings/investor runway is gone so that they can keep your data from being thrown away?
- dasil003 14y ago
  Sorry, but this is wishful thinking. Being acquihired is not going to affect any individual's future ventures in any meaningful way. You might scrutinize every new service's ownership before you click sign up, but you are not even a blip on the radar. It might be true that overtime this will erode customer's confidence in startups in general, but so will being shut down because the founders are starving. And it's not like major corporations are guaranteeing products for the long-haul either. Basically, the whole computer industry is one big case of buyer beware. If you really care about your data use open formats, open protocols and free software whenever you can.
  - hntester123 14y ago
    I agree with this statement of yours: >Basically, the whole computer industry is one big case of buyer beware. But not with this: >If you really care about your data use open formats, open protocols and free software whenever you can. Your first statement actually kind of contradicts your second - if we think of "buyer" as "user" even if the person has not bought the product - for the reason given below: There's no guarantee that a particular free software will continue to be supported, just because it is free. Example: iText, the popular and widely-used Java PDF generation library. It was free and open source earlier but some time back got converted to a commercial for-pay product (except that, IIRC, you may be able to use it for free if you make your own product that uses it, free/open source as well).
petercooper 14y ago
100% agreed. I've been in the same situation a few times lately. However, I do support people who make the decision because I sure would if the right deal were on the table. Long term though, I'd prefer "talent collaborations" to acquisitions. Did Nike "acquire" Michael Jordan? Sponsoring and supporting, not acquisition.
- dasil003 14y ago
  No, but if there were a more profitable basketball league than the NBA they would have got him for sure.
clarky07 14y ago
Everyone has their number, but I can't see giving up my freedom and time to work at a big company again. I'd be willing to sell a business to start a new one, but I'd have to be in a bad situation to take an acquihire. I'm sure I'd do it if the number was big enough, but I'd hate it for 2 years or whatever the lockin was.
cheap 14y ago
Marco is the man. I knew there was a reason I bought Instapaper for all my devices.
rayiner 14y ago
I don't understand the point of talent acquisitions. Couldn't you spend half the amount of money you would have buying the company just giving the developers enormous signing bonuses to come work for you? Why buy out the original investors in the target company when it's the developers you want?
- Domenic_S 14y ago
  It's really just a huge premium to get a team of people (this is important) who have built something similar to what you want to build (also important). And you get the IP as well, which is nice. In some cases you're consolidating power and shutting down competitors. It makes a lot of sense in some situations.
  - rayiner 14y ago
    If you paid half that premium to the members of the team, you'd be much more likely to get them all to come over as a bloc than you are by purchasing the company. And you'd have the other half left over for hookers and blow. Unless you value the goodwill or IP of the target company, it makes no sense to buy out the original investors of the target company.
    - drewcrawford 14y ago
      You consider the position of the hirers, but you fail to consider the position of the investors and the founders. Why would they be incentivized to accept this offer? First: why would the investors of a company allow the team to be bought out from under them? A good investor will align the incentives so that the founders are incentivized to exit at the same time as the investor. Second: why would a founder of a successful company accept a hiring deal? Most founders (heck, most developers) turn down several job offers before the second cup of coffee. And even if the $ paid to founders for acquisition vs pure hire is identical, there is an important psychological distinction between being bought and being hired that affects both the negotiations and the status and authority of the "employee" at the acquiring company and thus their wellbeing and autonomy. These factors matter.
oxwrist 14y ago
Thank you, Marco. If only more people would think the same...
maybe_someday 14y ago
While I understand Marco's position, personally I'm not in that position and I don't want the pressure of running on my business so if someone is willing to offer me 7 to 8 figures plus a massive salary for my startup then I'm not going quibble. As I once told an owner offering me equity "I'm at a stage of my life where finical stability is a welcome rest-bite so don't be offended if I duck out early."
- Domenic_S 14y ago
  > a welcome rest-bite Was that supposed to be "respite"?
  - maybe_someday 14y ago
    Yes, I can't spell very well.
    - Domenic_S 14y ago
      I kind of like rest-bite. Phonetically similar, kind of means the same thing :)
      - gruseom 14y ago
        That's the second solecism you've redeemed in this thread alone. You could make a career out of this as a minor superhero :) http://news.ycombinator.com/item?id=4273080 http://news.ycombinator.com/item?id=4273080
nilayp 14y ago
Sparrow being my favorite app... and Marco's post encouraged me to write a blog about the state of productivity apps in the App Store. Excellent apps like Sparrow are damn expensive to write. If Apple cares about keeping companies like Sparrow alive (they should) they can do two things to help us. 1) Allow Apps to charge monthly/annual subscriptions. 2) Give ad/social marketing campaign data to devs so they know which of their efforts to attract users is working. More details are on our blog post: http://blog.selligy.com/post/27652044305/apple-help-the-best-app-developers-not-get http://blog.selligy.com/post/27652044305/apple-help-the-best...
usea 14y ago
My take on this is: 'Tis better to have loved and lost than never to have loved at all. If you use and love a product, then the developers get acuihired and the product dies, getting upset about it is kind of childish. Get some perspective. You had X months with that product that you loved, it's better than 0 months. If you built your own product that relied on theirs, well you knew the risks going in. Fare better next time.
rogerchucker 14y ago
Very few people invest in an app hoping that it will stick around - people mostly invest in the service the app provides. Or the service the app enhances (like Sparrow enhancing the Gmail experience). If that app is gone for whatever reason, the market will simply move on to other solutions. Apps are not ecosystems and expecting stickiness is too much wishful thinking.
antr 14y ago
This talent acquisitions issue is also fueled by angel investors and VCs telling entrepreneurs that (i) they should not focus on revenues/profit, and (ii) grow fast quickly. This advice is some of the worst advice to give entrepreneurs, because revenue/profit is fundamental for any company's survival, and growth does not translate to long-term success. Then again, investors are in a constant conflict of interest with owning a piece of a long-term profitable businesses, and their expertise is not close to knowing how to manage a profitable business. Having said that, VCs are good at flipping startups to cash-rich companies, who seem to care little on value dilution. How many acquired companies have Google, Microsoft, Yahoo, AOL, New Corp, etc shut down? Which makes me think: what is the net value of Venture Capital flips to the economy?
dilap 14y ago
Well, sure, I paid $20 or whatever for Sparrow (twice, actually), and I get the impression that tons of other people did too, but it didn't make much difference, did it? And it never will -- there are always going to be developers who are in it for the money and will leave you high-and-dry (which is heartbreaking, in a very-small-violen way, but fine). My own takeaway is if you don't want your apps to disappear, use open source apps. (Except for some reason, open-source apps seem to tend to be terrible, UI wise. Not sure why this is, though I have a couple half-baked theories.)
socratic 14y ago
Was the intent ever not to get talent acquired? I'm very confused by all of the anger at Google and Facebook for acquiring these companies. The companies look like they were designed to get talent acquired in the first place! They both have very small teams (2--5), Sparrow at least appears to have taken very small amounts of funding (just seed a year or two ago), and I can't name a consumer desktop application (especially a really generic one like mail with tons of free competitors) that has become a major $1bn+ (or even $100m+) business in the last several years. There probably aren't enough eyeballs for ads, and App Stores have made consumer software cost expectations too cheap. What's more, Sparrow is pretty much designed to make Google's offering better. Is this interpretation wrong? Could these small teams have built independent companies (rather than attractive teams for talent acquisition) on Mac desktop software in 2012?
- blantonl 14y ago
  ... and I can't name a consumer desktop application (especially a really generic one like mail with tons of free competitors) that has become a major $1bn+ (or even $100m+) business in the last several years. Exactly. An "exit" can mean a lot of different things depending on the company, situation, financials etc.
  - reinhardt 14y ago
    Why does a 2-5 employee company have to get to be a $100M in the first place? It's pretty sad if this is indeed true.
    - hntester123 14y ago
      reinhardt: I agree. I think the reason for this kind of thinking ("have to get to $100MM") is that developers are brainwashed (by all the TechCrunch-style hype about the few startups that make it very big) and forget common sense - that they can live very well indeed even if pulling in much less revenue than $100MM - hey, 1 to 5 mil or even 0.5 mil is enough for a pretty luxurious life for most people anywhere in the world, unless you want to buy yachts or something like that.
ruswick 14y ago
I don't understand why people get all bent out of shape when software they use gets shut down. At the end of the day, it's just one app. They're are plenty of other options for email clients, and god knows better ones will come out in the future. People act as if something close to them is going away forever. It's just an email client and you can still use it, it just won't be actively updated. I also don't understand the impetus behind blaming Google or Facebook and treating it as if they are antagonizing you as a user. They made an offer and the developers accepted it knowing they would not be able to develop their app any more. This course of events is one that the developers actively chose. Frankly, I think it's great that these guys are getting acquired. They worked hard, caught the attention of a big company and were rewarded handsomely. After all, that's why they developed the app in the first place: to make money. There's absolutely no warrant for you to expect that the developers put their lives on hold so that you can have a piece of software. As for Instapaper, I think that Marco is disconnected. If he is in a position where he has enough money so as to be able to ignore offers for his app and instead run a lifestyle business, fine. I also think that part of his attitude towards a buyout comes from the fact that, despite that he denies it and refers to it in jest, Marco is actually fairly rich. He was one of the earliest employees at Tumblr, a company now worth ~800m. That means that even the most minimal equity would give him a net worth in the millions. That's great for Marco. But I'd imagine that very few people are in his place. A lot of app developers probably dream of being acquired. Who can blame them? Everyone wants money. So, although Marco has enough money where he can basically ignore the need to sell, most app developers don't. The Sparrow guys obviously didn't.
ruswick 14y ago
I don't understand why people get all bent out of shape when software they use gets shut down. At the end of the day, it's just one app. They're are plenty of other options for email clients, and god knows better ones will come out in the future. People act as if something close to them is going away forever. It's just an email client and you can still use it, it just won't be actively updated. I also don't understand the impetus behind blaming Google or Facebook and treating it as if they are antagonizing you as a user. They made an offer and the developers accepted it knowing they would not be able to develop their app any more. This course of events is one that the developers actively chose. Frankly, I think it's great that these guys are getting acquired. They worked hard, caught the attention of a big company and were rewarded handsomely. After all, that's why they developed the app in the first place: to make money. There's absolutely no warrant for you to expect that the developers put their lives on hold so that you can have a piece of software. As for Instapaper, I think that Marco is disconnected. If he is in a position where he has enough money so as to be able to ignore offers for his app and instead run a lifestyle business, fine. I also think that part of his attitude towards a buyout comes from the fact that, despite that he denies it and refers to it in jest, Marco is actually fairly rich. He was one of the earliest employees at Tumblr, a company now worth ~800m. That means that even the most minimal equity would give him a net worth in the millions. That's great for Marco. But I'd imagine that very few people are in his place. A lot of app developers probably dream of being acquired. Who can blame them? Everyone wants money. So, although Marco has enough money where he can basically ignore the need to sell, most app developers don't. The Sparrow guys obviously didn't.
yuliyp 14y ago
I'm having a tough time understanding talent acquisitions. You have a set of people working for the startup and the outside investors in the startup, and you have an outside company trying to purchase them. The outside company offers $X for the company in an acquihire. Let's say all the outside investors own fraction Y of the company. Why can't the outside company offer a total of X * (1-.5Y) in signing bonuses to the people in the startup, leaving both them and the employees strictly better off? Are founders and early employees just walled off with non-competes to make this not realistic?
- neilparikh 14y ago
  This is explained well in this thread: https://news.ycombinator.com/item?id=4272973 https://news.ycombinator.com/item?id=4272973
wavephorm 14y ago
Startups are becoming the new resume... essentially.
wavephorm 14y ago
Meh, all the whining about this is complete bullshit. If you didn't pay for the product, and instead downloaded the free version, and used it indefinitely, expecting the developer work on it, full time, without compensation, and didn't pay him for his hard work, then you got exactly what you payed for.
andy_herbert 14y ago
> I was only able to reject those offers because Instapaper is a healthy business, and the life that Instapaper provides for me and my family is better than what the big companies offered. The subtext I'm reading here is that none of the offers Marco has received yet are attractive enough for him accept. So he is in the exact-same position as Pulp Wallet and Sparrow then, it's likely that quite a few offers came knocking before the right one came along.

367 points by davisml 14y ago

I'm the author of the popular Mac Instagram Client "InstaDesk" (http://www.instadesk-app.com http://www.instadesk-app.com) and I can only confirm this. The reason why I started this whole thing was because I was fed up with working in corporations and not being able to control my life. Now I can enjoy the sun during the day, outside, sitting at a lake, and work late into the evening - or vice versa work at the lake. Even if a huge corporation would offer me a lot of money, I still wouldn't want to join since I would loose so much more. Money doesn't make me happy, freedom does. So, as long as InstaDesk (or other, future, apps) generate enough money for me to survive, I really doubt I would sell (with the exception that if the offer is, just as Marco said, really good and the continuation of InstaDesk is guaranteed). However, a free life where I'm not obliged or controlled by anybody is just so so so good. (I say this after having worked in IT companies and startups since 2000). So yeah, support the products you love, and spread good news about them, and give them good reviews.

tchock23 14y ago
As someone who sold his company last year and is now experiencing life as a salaried employee again, amen to this... Freedom > money in the vast majority of cases.
- metafour 14y ago
  I have this conversation with others and myself all the time. Money is nice but what is the opportunity cost of that money?
  - aeturnum 14y ago
    There are also opportunity costs to freedom. Viewing choices as a "freedom v.s. cost" is a pretty common model. I don't think it needs to be approached "freedom lovers" v.s. "money grubbers" dynamic. People have happily made both choices.
Killswitch 14y ago
Love this attitude, and I also checked out your app.. Good job! Beautiful and looks awesome. Makes me wish I was more of an Instagram user than I am.
- terhechte 14y ago
  Thank you! It was quite a bit of work, but I enjoyed (almost) every minute of it so far :)
Domenic_S 14y ago
> Money doesn't make me happy, freedom does. Guess what money buys? The only problem (in this context) is that it has to be a fairly large amount of money, and all in one chunk. Seriously, if Facebook offered you $10MM for instadesk, under the condition that you'd have to work for them for one year, you'd turn that down? No way. You'd be silly not to take it, because you could put in your one year and then be free for (basically) ever.
- terhechte 14y ago
  True, though in a situation I like that I'd take $100.000 away and pay a dev to work on my apps for that year, and probably continue working on it afterwards.
- 2muchcoffeeman 14y ago
  There are probably levels of freedom though. I like producing useful things and would work even if I have $10M right now (I would also be less stressed and probably produce better work ...). So getting a modest amount of money annually, and increasing the freedom at which I can do my other things is also attractive. I think a lot of people really just want to be comfortable.
- buro9 14y ago
  I think that is false. I think freedom is more like love... money can not buy it, you have to work at other things to get it. If you think money buys you freedom then you become a slave to money rather than a person living with freedom. I've recently quit the corporate treadmill and am working on a startup. I've gone from an annual 6-figure (GBP) income from my day job and projects, to an £8k income from one actually profitable bootstrapped company. I don't think I could go back to the corporate world, and whilst a VC firm is currently trying to court me I fear it's just a talent acquisition attempt. I'm not interested in any scenario that isn't me pushing my work forward. The only thing I'm interested in is the freedom to work today on something that I care deeply for and believe in. My entire existence is focused on one this thing: This idea I have must come into being. No money can stop me from doing this, and that is freedom to me. To, today, choose everything I do and how I do it. To be happy knowing I have no distractions just to put food on the table, to be able to dedicate myself to this. Today I can truly say that there is no amount of money for which I'd enslave myself again. Perhaps there might be such a figure tomorrow, but today there isn't. I live day by day, and I think that tomorrow I will feel the same way. One fear I had in the corporate world earning that large sum of money... "What if I never quit and follow my dream?", "What if I spent my whole life working to secure the ability to follow my dream and then my life ended?". If you can, go for the freedom today. Money isn't worth it, it's such a bad measure of success, status, happiness and worth. That said, if you execute your dream well and others agree. Then I think that money comes. So freedom may bring you money... but money won't bring you freedom.
egillie 14y ago
I'm with you on that. I'm doing a start-up just so I can enjoy the sun during the day, and work at night when I can't do anything outside anyways! I feel like now that we've got it backwards. We're not farmers, we don't need to work in daylight anymore...
- terhechte 14y ago
  That's a really nice comparison. Never thought about it that way. It doesn't apply to all situations, but you're right in that many, many jobs could just as well be done during the night so that people can spend the day enjoying sunlight.

DanielRibeiro 14y ago

Being a long time instapaper user, thanks for sticking with it.

bvlaar 14y ago

This is very reassuring to instapaper users in this m&a environment. Thank you

jonathanjaeger 14y ago

I agree with the sentiment, but the difference between what you have (a healthy business, as you mention) and some other acquisitions is that some see the writing on the wall. True, some businesses throw in the towel too early for an attractive offer, but others know that without being the leader in a space they can't live up to their valuations, investment amount, or can't find a viable and sustainable business model for their product. It all depends on whether you're still having fun at your current business and whether it has a chance at succeeding. It's going to vary from startup to startup.

loeschg 14y ago

Yeah it's just a tough situation. Even as a developer, I'm pretty sure I'd have trouble turning down a huge paycheck to go work for a reputable company. I've never built anything that's had a huge fan base though. What are ways to show appreciation for a company/product you like aside from buying their product, tweeting an occasional praise, and liking their FB content? Is that enough?

petercooper 14y ago
Even as a developer, I'm pretty sure I'd have trouble turning down a huge paycheck to go work for a reputable company. I've never built anything that's had a huge fan base though. The situation when you have built a big fan base or other sort of "attention" asset is that taking a job is surprisingly risky. I had this situation with a potential acquirer. The job was awesome, the company was great, but the goodwill and potential I've built up is too valuable to part with lightly. Why? The worst case is you get bought out at too low a cost and then, for whatever reason, you're out of a job a month later. Now you have a little pile of money in the bank and.. back to square one. That's a risk regular employed folks don't have. This is why most talent acquisitions are in the 7 or 8 figures. It's enough money to eradicate the risk of taking on a full time job and losing one's hard-built business assets for most people (even low 7 figures each is enough to pay off mortgages, cars, and have healthy savings).
- dangrover 14y ago
  This. I sold out (Etude), worked for a year or so, and now I just have money (not seven figures though). Have been floundering ever since trying to put together the next thing. Having runway kind of makes it worse, even.
  - petercooper 14y ago
    Whoa! The music app? I remember seeing that for the first time, had no idea Steinway picked it up. Congratulations man. I had a similar situation with one of my first businesses. Low six figure acquisition and then.. oh, what do I do now? It took me almost 4 years to figure it out(!) and now I'm back on my feet again. Good luck!

arrowgunz 14y ago

>I don’t want Instapaper to shut down, I don’t want to move my family across the country, and they didn’t want to pay enough So if Marco was paid enough, would he let big companies shut down Instapaper by acquiring it?

vtry 14y ago
100 million dollars!
petercooper 14y ago
While there are certainly people who would refuse to sell at any price (Zuckerberg was probably in this camp), I suspect the vast majority of people (even 100% ethical, moral, up-standing folks) have a price. Would I sell my business for $100m tomorrow even if the whole thing got destroyed in the process? I sure would (though I'd use the money to start a new one ;-)).

smackfu 14y ago

>If you want to keep the software and services around that you enjoy, do what you can to make their businesses successful enough that it’s more attractive to keep running them than to be hired by a big tech company. Nice words, but I doubt it matters. Sparrow got nothing but support for their entire company history. Every review was golden. Every user was a paid user. And they still sold out. (Or maybe Marco means people should join his subscription program: http://www.instapaper.com/subscription http://www.instapaper.com/subscription )

tptacek 14y ago
This is a series of nonstatements. Obviously, Sparrow did not get so much support that Google's offer was unattractive. Post as many gold stars as you want: if Google is outbidding the user base, it's hard to blame the developer for accepting their offer.
- smackfu 14y ago
  You don't think a message of "support developers or they'll sell out" is a bit tone deaf today?
  - tptacek 14y ago
    No, I think the exact opposite.
- reinhardt 14y ago
  Not that hard really. Not everyone sees life as bank savings optimization problem.

jazzychad 14y ago

Well, congrats to Marco for having a successful and sustainable business where he has the option and leverage to decide what he wants to do when these offers come knocking. Most startup/bootstrapped companies are not in that position. Most end up failing and winding up with nothing, but there are some that will end up with these talent acquisition situations. Remember, both sides (the acquirers and the acquirees) have to agree to the deal. Google doesn't just come along and say "we want to acquire you for your talent" and the other side has no say in the matter. In this situation you are faced with a choice. Talent acqs happen because a) the acquire target is not really doing that well, and b) they have a group of people that work well together that the acquiring company wants to keep together to do great things under their umbrella. Given the choice between: keep working on your low-to-modest traction product which isn't producing a lot of revenue and wonder how you might pay rent next month OR a multi-million dollar check/stock offer at a large, successful company... which would you choose? I would take the check in that situation. Sometimes you can't achieve your world-changing vision before your investor and personal money are gone. The goal of a company should be to succeed and be self-sustaining, of course. But sometimes that doesn't happen, and these talent acqs happen for a reason.

Tyrannosaurs 14y ago
I read this slightly differently. I don't think this was a plea to developers to not sell up, I think it was a plea to people to support small companies to make not selling up a more appealing option.
- jazzychad 14y ago
  Ehh, maybe the last sentence implied that (though it could be read both ways), but most of the article read like a humble brag about Instapaper being successful enough that it doesn't have to bother with this type of situation. That's all well and good, but it sort of rubbed me the wrong way.
jmduke 14y ago
I obviously can't speak for Marco, but I think what I take umbrage with is when developers plan this out from the beginning -- create a product/company that drives just enough attention to ensure an acquihire. The result ends up being pretty detrimental to the community. Given the choice between: keep working on your low-to-modest traction product which isn't producing a lot of revenue and wonder how you might pay rent next month OR a multi-million dollar check/stock offer at a large, successful company... which would you choose? I would also choose the latter. I'll be the first to admit I'm not trying to change the world or 'disrupt and industry' or anything lofty like that. But I think there are quite a few people who would eschew the big check for the opportunity to do something tremendous, and they deserve to be lauded.

rpbertp13 14y ago

A talent acquisition signals something more than a job offer. It shows that you're able to conceive and build a product that people are willing to use. It also means that you've had experience negotiating terms. This is very important when/if you decide to take an entrepreneurial step after being at the acquihirer. All things equal, future investors are more likely to trust someone who has had an acquisition in the past. You're more likely to get press exposure. All these things are meaningless if you're building something no one wants, but they definitely help if you're on the right track.

tb303 14y ago

So now that I've paid for instapaper for iPhone and iPad, I don't have to give Marco any more money. That means the only way he stays in business as the product grows (being that I am not a revenue source anymore) is by either a) figuring out an additional revenue stream from the data or b) discontinuing the apps I paid for and charging me for new ones. The same goes for sparrow. These one-time purchase apps don't have continued revenue per user. So we can write rants on the internet all we want about "don't give in to the acqui-hire," but obviously the benefits of taking google's money greatly outweighed the future of trying to run a business by selling an app on the App Store.

fceccon 14y ago
Instapaper also offers a subscription plan http://www.instapaper.com/faq http://www.instapaper.com/faq If I remember correctly it adds search and the ability to use the full API by 3rd party clients.
JeremyBanks 14y ago
Instapaper isn't entirely without other revenue. The web interface displays ads, and he offers a $1/month subscription that improves some features. (I pay for it so that I can send larger compilations to my Kindle.) http://www.instapaper.com/subscription http://www.instapaper.com/subscription
- wpietri 14y ago
  Yes. I subscribe not because I cared about whatever features he was offering at the time. (I think it was all about the iPad, and I've never owned one.) I did it because I wanted to make sure he was getting paid enough to keep doing it. Glad to see that he's happy and feels like he's making enough.
smackfu 14y ago
So what's the takeaway for us as users? Should we prefer free apps with IAP or advertising because that's a more sustainable business model?
Firehed 14y ago

crazygringo 14y ago

So... how about open-sourcing Sparrow? Seems like that would solve a big part of the problem, no? Wonder if Google would let that happen.

CognitiveLens 14y ago
As much as the talent behind software drove the acquisition, Sparrow also had some very solid, semi-innovative features and a sophisticated IMAP engine that are now valuable technical/IP properties for Google. I would be very surprised if they open-sourced anything from this acquisition.
- hokkos 14y ago
  The imap engine is open source : http://www.etpan.org/ http://www.etpan.org/
- thibaut_barrere 14y ago
  I don't know: from earlier researches, it seems Sparrow is based on LibEtPan which is open-source: - http://www.etpan.org/libetpan/index.html http://www.etpan.org/libetpan/index.html - https://twitter.com/sparrow/status/6396505883676672 https://twitter.com/sparrow/status/6396505883676672

pclark 14y ago

http://www.youtube.com/watch?v=t5i7JDNACtI http://www.youtube.com/watch?v=t5i7JDNACtI

gwillen 14y ago

If I think you are inclined to accept a talent acquisition if offered, I _will not use your product_. Why would I? It's insane for me to trust my data to someone who's going to throw it away to make a buck. If you accept a talent acquisition, you will -- and should -- have a devil of a time getting customers at your next venture, having thrown away the customers from your previous one. Tread lightly.

shazow 14y ago
Do you not get any value out of using a product while it hasn't been shut down? Will you singlehandidly cover the developers' living expenses once the savings/investor runway is gone so that they can keep your data from being thrown away?
dasil003 14y ago
Sorry, but this is wishful thinking. Being acquihired is not going to affect any individual's future ventures in any meaningful way. You might scrutinize every new service's ownership before you click sign up, but you are not even a blip on the radar. It might be true that overtime this will erode customer's confidence in startups in general, but so will being shut down because the founders are starving. And it's not like major corporations are guaranteeing products for the long-haul either. Basically, the whole computer industry is one big case of buyer beware. If you really care about your data use open formats, open protocols and free software whenever you can.
- hntester123 14y ago
  I agree with this statement of yours: >Basically, the whole computer industry is one big case of buyer beware. But not with this: >If you really care about your data use open formats, open protocols and free software whenever you can. Your first statement actually kind of contradicts your second - if we think of "buyer" as "user" even if the person has not bought the product - for the reason given below: There's no guarantee that a particular free software will continue to be supported, just because it is free. Example: iText, the popular and widely-used Java PDF generation library. It was free and open source earlier but some time back got converted to a commercial for-pay product (except that, IIRC, you may be able to use it for free if you make your own product that uses it, free/open source as well).

petercooper 14y ago

100% agreed. I've been in the same situation a few times lately. However, I do support people who make the decision because I sure would if the right deal were on the table. Long term though, I'd prefer "talent collaborations" to acquisitions. Did Nike "acquire" Michael Jordan? Sponsoring and supporting, not acquisition.

dasil003 14y ago
No, but if there were a more profitable basketball league than the NBA they would have got him for sure.

clarky07 14y ago

Everyone has their number, but I can't see giving up my freedom and time to work at a big company again. I'd be willing to sell a business to start a new one, but I'd have to be in a bad situation to take an acquihire. I'm sure I'd do it if the number was big enough, but I'd hate it for 2 years or whatever the lockin was.

cheap 14y ago

Marco is the man. I knew there was a reason I bought Instapaper for all my devices.

rayiner 14y ago

I don't understand the point of talent acquisitions. Couldn't you spend half the amount of money you would have buying the company just giving the developers enormous signing bonuses to come work for you? Why buy out the original investors in the target company when it's the developers you want?

Domenic_S 14y ago
It's really just a huge premium to get a team of people (this is important) who have built something similar to what you want to build (also important). And you get the IP as well, which is nice. In some cases you're consolidating power and shutting down competitors. It makes a lot of sense in some situations.
- rayiner 14y ago
  If you paid half that premium to the members of the team, you'd be much more likely to get them all to come over as a bloc than you are by purchasing the company. And you'd have the other half left over for hookers and blow. Unless you value the goodwill or IP of the target company, it makes no sense to buy out the original investors of the target company.
  - drewcrawford 14y ago
    You consider the position of the hirers, but you fail to consider the position of the investors and the founders. Why would they be incentivized to accept this offer? First: why would the investors of a company allow the team to be bought out from under them? A good investor will align the incentives so that the founders are incentivized to exit at the same time as the investor. Second: why would a founder of a successful company accept a hiring deal? Most founders (heck, most developers) turn down several job offers before the second cup of coffee. And even if the $ paid to founders for acquisition vs pure hire is identical, there is an important psychological distinction between being bought and being hired that affects both the negotiations and the status and authority of the "employee" at the acquiring company and thus their wellbeing and autonomy. These factors matter.

oxwrist 14y ago

Thank you, Marco. If only more people would think the same...

maybe_someday 14y ago

While I understand Marco's position, personally I'm not in that position and I don't want the pressure of running on my business so if someone is willing to offer me 7 to 8 figures plus a massive salary for my startup then I'm not going quibble. As I once told an owner offering me equity "I'm at a stage of my life where finical stability is a welcome rest-bite so don't be offended if I duck out early."

Domenic_S 14y ago
> a welcome rest-bite Was that supposed to be "respite"?
- maybe_someday 14y ago
  Yes, I can't spell very well.
  - Domenic_S 14y ago
    I kind of like rest-bite. Phonetically similar, kind of means the same thing :)
    - gruseom 14y ago
      That's the second solecism you've redeemed in this thread alone. You could make a career out of this as a minor superhero :) http://news.ycombinator.com/item?id=4273080 http://news.ycombinator.com/item?id=4273080

nilayp 14y ago

Sparrow being my favorite app... and Marco's post encouraged me to write a blog about the state of productivity apps in the App Store. Excellent apps like Sparrow are damn expensive to write. If Apple cares about keeping companies like Sparrow alive (they should) they can do two things to help us. 1) Allow Apps to charge monthly/annual subscriptions. 2) Give ad/social marketing campaign data to devs so they know which of their efforts to attract users is working. More details are on our blog post: http://blog.selligy.com/post/27652044305/apple-help-the-best-app-developers-not-get http://blog.selligy.com/post/27652044305/apple-help-the-best...

usea 14y ago

My take on this is: 'Tis better to have loved and lost than never to have loved at all. If you use and love a product, then the developers get acuihired and the product dies, getting upset about it is kind of childish. Get some perspective. You had X months with that product that you loved, it's better than 0 months. If you built your own product that relied on theirs, well you knew the risks going in. Fare better next time.

rogerchucker 14y ago

Very few people invest in an app hoping that it will stick around - people mostly invest in the service the app provides. Or the service the app enhances (like Sparrow enhancing the Gmail experience). If that app is gone for whatever reason, the market will simply move on to other solutions. Apps are not ecosystems and expecting stickiness is too much wishful thinking.

antr 14y ago

This talent acquisitions issue is also fueled by angel investors and VCs telling entrepreneurs that (i) they should not focus on revenues/profit, and (ii) grow fast quickly. This advice is some of the worst advice to give entrepreneurs, because revenue/profit is fundamental for any company's survival, and growth does not translate to long-term success. Then again, investors are in a constant conflict of interest with owning a piece of a long-term profitable businesses, and their expertise is not close to knowing how to manage a profitable business. Having said that, VCs are good at flipping startups to cash-rich companies, who seem to care little on value dilution. How many acquired companies have Google, Microsoft, Yahoo, AOL, New Corp, etc shut down? Which makes me think: what is the net value of Venture Capital flips to the economy?

dilap 14y ago

Well, sure, I paid $20 or whatever for Sparrow (twice, actually), and I get the impression that tons of other people did too, but it didn't make much difference, did it? And it never will -- there are always going to be developers who are in it for the money and will leave you high-and-dry (which is heartbreaking, in a very-small-violen way, but fine). My own takeaway is if you don't want your apps to disappear, use open source apps. (Except for some reason, open-source apps seem to tend to be terrible, UI wise. Not sure why this is, though I have a couple half-baked theories.)

socratic 14y ago

Was the intent ever not to get talent acquired? I'm very confused by all of the anger at Google and Facebook for acquiring these companies. The companies look like they were designed to get talent acquired in the first place! They both have very small teams (2--5), Sparrow at least appears to have taken very small amounts of funding (just seed a year or two ago), and I can't name a consumer desktop application (especially a really generic one like mail with tons of free competitors) that has become a major $1bn+ (or even $100m+) business in the last several years. There probably aren't enough eyeballs for ads, and App Stores have made consumer software cost expectations too cheap. What's more, Sparrow is pretty much designed to make Google's offering better. Is this interpretation wrong? Could these small teams have built independent companies (rather than attractive teams for talent acquisition) on Mac desktop software in 2012?

blantonl 14y ago
... and I can't name a consumer desktop application (especially a really generic one like mail with tons of free competitors) that has become a major $1bn+ (or even $100m+) business in the last several years. Exactly. An "exit" can mean a lot of different things depending on the company, situation, financials etc.
- reinhardt 14y ago
  Why does a 2-5 employee company have to get to be a $100M in the first place? It's pretty sad if this is indeed true.
  - hntester123 14y ago
    reinhardt: I agree. I think the reason for this kind of thinking ("have to get to $100MM") is that developers are brainwashed (by all the TechCrunch-style hype about the few startups that make it very big) and forget common sense - that they can live very well indeed even if pulling in much less revenue than $100MM - hey, 1 to 5 mil or even 0.5 mil is enough for a pretty luxurious life for most people anywhere in the world, unless you want to buy yachts or something like that.

ruswick 14y ago

I don't understand why people get all bent out of shape when software they use gets shut down. At the end of the day, it's just one app. They're are plenty of other options for email clients, and god knows better ones will come out in the future. People act as if something close to them is going away forever. It's just an email client and you can still use it, it just won't be actively updated. I also don't understand the impetus behind blaming Google or Facebook and treating it as if they are antagonizing you as a user. They made an offer and the developers accepted it knowing they would not be able to develop their app any more. This course of events is one that the developers actively chose. Frankly, I think it's great that these guys are getting acquired. They worked hard, caught the attention of a big company and were rewarded handsomely. After all, that's why they developed the app in the first place: to make money. There's absolutely no warrant for you to expect that the developers put their lives on hold so that you can have a piece of software. As for Instapaper, I think that Marco is disconnected. If he is in a position where he has enough money so as to be able to ignore offers for his app and instead run a lifestyle business, fine. I also think that part of his attitude towards a buyout comes from the fact that, despite that he denies it and refers to it in jest, Marco is actually fairly rich. He was one of the earliest employees at Tumblr, a company now worth ~800m. That means that even the most minimal equity would give him a net worth in the millions. That's great for Marco. But I'd imagine that very few people are in his place. A lot of app developers probably dream of being acquired. Who can blame them? Everyone wants money. So, although Marco has enough money where he can basically ignore the need to sell, most app developers don't. The Sparrow guys obviously didn't.

ruswick 14y ago

yuliyp 14y ago

I'm having a tough time understanding talent acquisitions. You have a set of people working for the startup and the outside investors in the startup, and you have an outside company trying to purchase them. The outside company offers $X for the company in an acquihire. Let's say all the outside investors own fraction Y of the company. Why can't the outside company offer a total of X * (1-.5Y) in signing bonuses to the people in the startup, leaving both them and the employees strictly better off? Are founders and early employees just walled off with non-competes to make this not realistic?

neilparikh 14y ago
This is explained well in this thread: https://news.ycombinator.com/item?id=4272973 https://news.ycombinator.com/item?id=4272973

wavephorm 14y ago

Startups are becoming the new resume... essentially.

wavephorm 14y ago

Meh, all the whining about this is complete bullshit. If you didn't pay for the product, and instead downloaded the free version, and used it indefinitely, expecting the developer work on it, full time, without compensation, and didn't pay him for his hard work, then you got exactly what you payed for.

andy_herbert 14y ago

> I was only able to reject those offers because Instapaper is a healthy business, and the life that Instapaper provides for me and my family is better than what the big companies offered. The subtext I'm reading here is that none of the offers Marco has received yet are attractive enough for him accept. So he is in the exact-same position as Pulp Wallet and Sparrow then, it's likely that quite a few offers came knocking before the right one came along.