

Why I sold to Google - danshapiro
http://www.geekwire.com/2011/sparkbuys-dan-shapiro-sold-google-puts-turbo-chargers-idea

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erikb
"Why I sold...?" As if nobody would know that people sell something to get
money.

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ericd
Why is it only about the team and the shareholders? What about the general
public that you were trying to help out with your product? I think they're
actually more important than the other two - it's millions vs. a handful. They
lose out more often than not when products are killed in acquisitions like
this.

~~~
bruce511
There seems to be this complete disconnect for most people as to why a
business exists. It exists for the owners and the employees. Helping
customers, or creating something a customer wants may be a welcome side-effect
but it's not the _reason_ a business exists.

Of course you get the "pageant-effect" when you ask a business why they exist.
They always have some altruistic reason as the "official party line" just like
"miss somewhere" wants world peace. But businesses are bottom-line driven,
indeed they have a fiduciary responsibility to optimize share-holder value.

There are organizations that exist exclusively for the benefit of the
customer. they're called "not for profits" or "charities". We even give them a
different name to show they're not a business. In their case the side effect
is paying employees, but their _reason_ is to help customers.

Every time you use a "free" service on the internet you have to determine if
the provider is a charity or a business. If a business they _have_ to have
some sort of payment strategy. (Or, if they don't they quickly go out-of-
business and the free-users will moan bitterly about that too.)

If you are not paying for the service you are _not_ a customer. You are a
_user_. Customers trump users every single time. (Of course users may turn
into customers, that's the precept of most startups. Equally this is the point
most of them fail at.)

>> What about the general public that you were trying to help out with your
product?

The general public were being helped only in as much as they fulfilled the
business' needs. Google filled the need better (with cash), and so they became
the customer.

~~~
_delirium
> Helping customers, or creating something a customer wants may be a welcome
> side-effect but it's not the _reason_ a business exists.

For many small businessmen I know, that _is_ the reason a business exists. If
they just wanted to make money, they would work somewhere on wall street and
reel in bonuses. Why do they work longer hours for less money running their
own business? For some, it's freedom and not having a boss. But for others,
it's because they have some sort of vision for how they want to change an
industry or society; and they want to leave a legacy of having done so, not
just make money.

~~~
bruce511
>> But for others, it's because they have some sort of vision for how they
want to change an industry or society; and they want to leave a legacy of
having done so, not just make money.

Absolutely, and if that is the prime motivation then they should start a
charity not a business. It's more tax-efficient for starters, and also more
likely to attract like-minded people to contribute resources (time and/or
money).

Open-Source projects for example are often clearly "not for profit" and
incorporate, or align themselves with not-for-profit structures. The FSF,
Mozilla foundation and a score of others spring to mind.

For the small businessmen you know, who do not care about the money (beyond
their salary), who are out to build a legacy, they _should not_ use a business
structure. If they do, well that still doesn't make them a "business".

If they're aiming to start from scratch, and create a giant business, so they
have "succeeded" (think Hewlett, Packard, Johnson, Ford et al) then that
creation still serves the needs of the owner - those needs are just not cash.
It might be good for customers along the way, but the business exists for the
owners' glory, not the customers.

Of course the vast majority of small businesses are absolutely, 100%,
businesses. A small business may fit a person better than a big business, but
it's still a business. If you take away the money aspect from most small
businesses, they close their doors.

It's exactly like the OP said - the business exists to fulfill the needs of
the owner and the team (if there is a team). Those needs are usually cash, but
include other things like flexible hours, and not-having-a-boss and so on.
When the needs of the customer clash with the needs of the business, the
business always wins.

And of course there are _bad_ business people out there. There are those that
will take calls at 1am because the customer demands it (so they say) but they
don't place a value on it, or require the customer to pay that value. That's
bad business, and of course it's very common. But you can't use that as a data
point for arguing that businesses exist for the benefit of customers. Some
owners even use their relative lack of success as evidence of their altruism.
In which case recommend to them that they start a charity, get a board to
oversee their salary, and get out of the way.

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ojosilva
I don't think Sparkbuy was that great an app, although their concept of
"technical searching" was interesting. Neither I think online shopping is a
path Google may follow in the future. I think this is just how the higher
level hiring process at Google works: build startup, get their attention, get
bought out, app switched off, welcome to Googleplex.

 _it looks like the startup's founder are joining Google as employees.
According to Seattle Times, they will be working on Google's new mortgage,
credit card, and bank account comparison site Advisor, which was launched last
week._

[http://news.ebrandz.com/google/2011/4061-google-acquires-
spa...](http://news.ebrandz.com/google/2011/4061-google-acquires-sparkbuy-a-
search-engine-for-consumer-electronics.html)

I always wondered how these acquisition contracts are structured as far as the
team goes, ie, if Dan Shapiro leaves before 2 years doesn't get to keep part
of the money?

Anyone here with real experience on this kind of deals?

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rick888
"if you look at the big picture world that happens to startups, there are
really three things that happen: IPOs, acquisitions and bankruptcy"

This is why you shouldn't spend all your time creating a short-term business
with the goal of being bought out by a bigger entity.

I suppose everyone has different goals, but mine is to create a company that
will evolve and last for many years. This wouldn't even be possible if I wrote
the next service based on Twitter or Facebook.

~~~
iamgoat
Agreed. These short-term business acquisitions, while exciting to read about,
are not common. Most businesses take years to build and if you're not in it
for the long run you're going to get bored or bankrupt.

As much as I don't like to drink the 37Signals juice, they have a strong
belief and commitment to their business. This is a lot different than being an
employee where you should always be moving around every few years (unless you
have a piece of the pie). However, if you're the owner, be proud of what
you're building and who you're building it for.*

* Could be for investors, but hopefully it's yourself.

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prpon
wow! that was a really quick sale right after the launch. Mixergy had an
excellent interview with founder Dan Shapiro in April.
<http://mixergy.com/dan-shapiro-ontela-interview/>

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thejbf
>> What are you going to do inside Google? "I am still figuring that out."

This clearly states that I sold for money and reputation. But the bad thing is
selling to Google is not like selling to Google in 2005.

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revorad
_When I am running a startup, I am running it really for just two
constituencies: for the shareholders and for the team. And this was awesome
for the shareholders and was awesome for the team._

What about the users? What about the users?

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bauchidgw
i bet money was involved, too

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Hisoka
This isn't really a startup acquision - more like a talent acquisition. Google
can easily create a similar service, and since they are the gatekeeper, they
could just pump their site in front of everyone else in the rankings (like
they do with YouTube).

Of course, I'd sell out too if I knew Google could accidentally punish me
after a single algorithm change. No freaking brainer

~~~
nck4222
"they could just pump their site in front of everyone else in the rankings
(like they do with YouTube)."

Is there any proof of this? The same thing was said about knol/wikipedia, and
that wasn't true at all.

~~~
Hisoka
No need for proof, just intuition.

Think about it: they can create any new website and instantly give it good
Pagerank/TrustRank/whatever by internally linking to it from the Google.com
domain. They dun even need to manually boost it.

~~~
nck4222
I completely agree it's very easy for them to do that.

But no you definitely need proof, especially when there's evidence disproving
you. For example: Knol/Wikipedia.

~~~
Hisoka
They dun even need to do anything except put a link to their new service on
their main domain and it already gives them an instant boost. Which they
already do for 99% of all their related services.

