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The important thing in analyzing a competitor's behavior is to understand the incentives motivating that behavior.

A common example in startupland is a company whose senior management has short term incentives that reward a fast exit over long term growth. That company may very well behave in ways that appear dumb to competitors with a long term focus. But if the "seasoned" CEO and his cronies get their compensation even in a mediocre deal, why bother trying to build a company for the ages when they can cash out, rest a bit and land in a similar situation at the next gig?




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