
Twitter’s business model is to sell the company - diego
http://flaptor.com/blog/twitters-business-model-is-to-sell-the-company_19/
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pg
_In short, building a product to sell to one company is a valid business
model._

It's a valid _strategy,_ but it's not a business model.

It's not that great a strategy either...

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dcurtis
Not a single YC company that I know of has made any remarkable amount of money
without being sold. But, in fact, many YC companies have made considerable
amounts of money by selling themselves.

Why is having the goal of being sold while making things people want not that
great of a strategy?

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ken
But do you think any YC combinator wouldn't have eventually made a lot of
money if they hadn't sold? Selling your startup doesn't cause it to have
value; that's backwards. YC startups were sold for money because presumably
the purchaser thought they would be worth at least that much money in the
future.

If you can build something people want, it seems relatively easy to convince
some fraction of those users to pay for it. Convincing a big company to buy
you is a long shot; convincing a big company to do _anything_ (even if you
work there) is tough.

Look at Dinosaur Comics -- that guy can't even draw, but he's making a living
at it. Now imagine trying to sell such a crazy idea to an existing company.

If you can make something people want, it almost seems irrelevant to think
about big companies. They'll only consider buying you once you look like a
solid business proposition already. It's a reward, not a bailout.

~~~
diego
There are plenty of companies that get acquired before having a solid business
proposition. Jaiku (along the lines of Twitter) is a recent example, but there
are many others. A company can be acquired for a variety of reasons. Maybe the
team is a good fit for the parent (talent acquisition). Maybe the product is
hard to monetize on its own but it's a good feature that will increase the
value of something else (could have been Xobni).

Perhaps it's a loss leader, a service that you plan to give away in order to
attract customers to your main business (a contrived example, Godaddy could
buy some game that somehow encouraged you to buy domain names).

~~~
tdavis
"There are plenty of companies that get acquired before having a solid
business proposition."

That doesn't make it a good idea. The answer to "Who is your target market?"
should not be "Uhhh... Google?" There are many more companies that built a
"cool" product that was useful and used, couldn't monetize it, and died
because of lack of capital. Somehow I doubt YC has ever invested in a company
that flat out had no exit strategy outside of being acquired by a big company.
You've got to have _something_ because if none of the big fish bite you're
screwed otherwise.

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brandonkm
A business model that focuses on selling the company is risky. This applies
even more so in twitter's case because they don't generate significant revenue
at all, but they continually remain overvalued due to lots of hype. Classic
web 2.0 tactics at work basically.

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jdvolz
I think Twitter should put out a personally hosted version of their service,
maybe sell it to people for a nominal fee ($10-25). That way the uptime is
improved (spread over a lot more computers and decentralized) and they start
to have a revenue stream. Providing both better service and making some money
seems like a step in the right direction...

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nir
Well, if it works it's a great model...

A "sell the company" business model is like becoming an actor with a mind of
becoming rich like Tom Cruise. No doubt _some_ people who do it will find some
success, but by definition this is something that (a) works only for a small
number of people (the world needs a limited number of movie stars, Google & Co
acquire a limited number of companies) and (b) contains a large element of
luck - many actors have comparable talent & looks, many companies can (and a
few already have) build a Twitter-like product.

The Black Swan by Nassim Nicholas Taleb is a great book about the randomness
in our lives: [http://www.amazon.com/Black-Swan-Impact-Highly-
Improbable/dp...](http://www.amazon.com/Black-Swan-Impact-Highly-
Improbable/dp/1400063515)

~~~
sabat
Selling the company: that's not a rare event. An IPO: that's like becoming an
actor with the intent of being the next Tom Cruise. There are many, many
buyers out there, hardly just Google. If you make something that people need
(not merely what they think they want, but what they _need_ ) then you will be
able to sell.

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mr_gunn
Is anyone honestly surprised by this?

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socksandsandals
Um, exit via acquisition is not a business model. By very definition. Link
bait trash.

