

Tempup artists: on tech's version of the sexual revolution - beyroutey
http://beyroutey.wordpress.com/2012/04/07/tempup-artists/

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antonb2011
Good read. This coincides with my own impression after reading HN for a while.
I suppose the problem of "Feature, Not a Company" sets in for any maturing
market. But aside from "plumbing" start-ups discussed on HN (like Heroku,
Phpfog or Parse), I rarely see anything that would be viable as a long term
stand-alone business, as many of our business-side colleagues would also
assert via "Porter's Five Forces"-type analysis. So I guess now it's all about
making a quick lottery ticket type start-up and trying to get acquired. That's
why you need VCs, 'cause they can negotiate a much higher price for your
little company that you can.

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patio11
VCs _hate_ acqu-hiring. It murders their returns: they'd far rather you take a
50% risk of failure to get 5x the offer and _can and do screw entrepreneurs by
forcing them to turn down life changing money to do just that_. Their business
model means if you can't 10x investments they do not want you and acqu-hiring
will not 10x any investment past seed stage.

Acqu-hires are really, really not the main game being played at startup
incubators or in the Valley. To the extent that HN believes this, HN's
zeitgeist believes something which is at odds with measurable features of the
material world. (e.g. To use YC as an example, if _every company other than
Dropbox_ sells for 1 million an engineer, Dropbox is still the majority of the
portfolio!).

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drewcrawford
I'm a little mystified by this idea, can you help me out?

When you filter "all startups" by "the sort of startups I am likely to start",
that search query doesn't terminate at a factory in China, or negotiating to
buy a hundred racks at Rackspace. It terminates with three software developers
in the spare bedroom for a quarter, at which point ideally a continuous
revenue stream has been generated that can fund the next project.

By analogy, the fact that most furniture purchased in America is mass-produced
is not really relevant to a master woodworker, if demand for his work far
exceeds supply. You can make the argument that he is "at odds with measurable
features of the material world", but I believe a fairer characterization would
be that his value system is just different than IKEA's, that they exist in
different markets.

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patio11
I wish you, the author, and everyone else happiness. I am really not trying to
convince you of the moral righteousness of the VC value system, which I don't
participate in directly. I'm just trying to explain accurately how it actually
functions: _anyone who says that VCs are aiming for acqu-hire exits is
mistaken_. Don't believe it, don't repeat it, don't make consequential
decisions based on it: it will not end well!

~~~
jacquesm
VCs tend to like acquisitions like that a lot more than they do outright
failures, especially if they get some or all of their investment back. Same
player shoots again.

Think of them as the emergency landing instead of as an alternative exit and
it may start to make more sense.

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dpritchett
In almost every case these investments are part of a portfolio for the
investors. Seems unrealistic to expect anything less from the founders.

