
Can’t raise a Series A? Just sell yourself to Yahoo - dmor
http://pandodaily.com/2013/05/09/cant-raise-a-series-a-just-sell-yourself-to-yahoo/
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adastra
If only someone had predicted this exact possibility 3 years ago...

 _"[2] In theory you could beat the death spiral by buying good programmers
instead of hiring them. You can get programmers who would never have come to
you as employees by buying their startups. But so far the only companies smart
enough to do this are companies smart enough not to need to."_

-Paul Graham, What Happened to Yahoo <http://paulgraham.com/yahoo.html>

Edit: giving this another 30 seconds thought, it wouldn't surprise me at all
if a friend of Mayer's sent her PG's essay when she first agreed to take the
job. If she hadn't realized it already, she almost certainly would have seen
this strategy as the correct one (use Yahoo's war chest to get more A-players
into the company through acquisitions), and she's been executing on it ever
since.

~~~
georgemcbay
"Buying" "A-Players" is only part of the battle though, you also have to
motivate them to do more than coast until the golden handcuffs are off.
Hopefully Yahoo is already working towards some big things that these people
being acquired are excited to be part of, otherwise this will just be a very
costly temporary solution.

~~~
notaddicted
What surprised me the most from Paul Graham's Yahoo article was he was
"sitting in my cubicle". I don't see how you could make someone a millionaire,
and then put them in a cubicle, and expect them to stick around.

~~~
nugget
As someone who has been in this situation more than once, a cubicle versus a
desk versus an office is not the issue - the issue is, can you motivate people
with work they are passionate about and an incentive/compensation plan they
feel is fair. Once you have those pieces in place, the work environment
usually doesn't matter as much (and to the extent it does, the newly motivated
employees will take steps to fix it on their own).

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ryanlchan
This is a masterpiece of a backhanded compliment. Never have I seen such
elegant transitions between briefly masked contempt and half-hearted
admiration. It's really stunning.

I think analyzing these acquisitions from a raw dollars-to-dollars perspective
is a mistake. When doing a turnaround with a company so fundamentally troubled
as Yahoo, you need more than just a few patch-in acquisitions, so that's
clearly not what they are about. These moves are part of a long term
investment in motivating employees, building relationships with the valley,
and regaining footing in the markets that they can win.

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rdl
The key for Yahoo would be using those acquihires well.

1) Assume these people still want to do startups. Make sure there are concrete
things they can achieve in 1-2 years; you probably have no chance of retaining
most of them for 4 years, or longer.

2) Revolving door (like Cisco has) is probably worthwhile to establish. As
long as you're buying at decent prices, there's nothing wrong with this.
Buying someone 2-3 times in a decade is still a win.

3) Optimize for reducing the negatives of joining Yahoo. Yahoo used to split
up productive teams; maybe let people remain as startup teams but then put
them on existing products/lines of business, rather than splitting up great
teams. I think this would make Yahoo more attractive (and maybe reduce the
premium Yahoo has to offer over Facebook/Google for the more competitive
acquihire deals)

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ianstallings
This article reads like a crazy person wrote it.

 _I'm not crazy. YES I AM._

Seriously. Are they in favor or against? I'm confused.

~~~
dmor
I don't think journalists are supposed to have an opinion. Plus their
investors require they write everything in code on PandoDaily

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rafaelc
Sadly, this is the kind of stuff that people will talk about. But it's
factually incorrect in many places.

As for "VC's playing defense" and being afraid to back consumer startups,
that's a broad mischaracterization. George and I backed two Series A companies
this month and we're looking for more - heck, our whole team has plenty of
capital. For backing great companies, no great firms are sitting back - it's
competitive in consumer and in enterprise. If anything, VC's are playing
offense.

~~~
bradhe
This describes what I'm seeing as well. If you've got a good team with a good
product and a good chance of becoming a business, it doesn't seem to be any
more difficult than normal to find the appropriate level of financing.

~~~
rafaelc
I'll write a post about this next week. Basically - we dream with founders.

From our perspective, there are always 30 reasons to say no. But if there is a
truly compelling reason to say yes, on a path to a large company, we're in.

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orangethirty
I'd rather be acquired by Yahoo than by Google or MS. They are the underdogs.

------
ryanglasgow
Another PandoDaily article criticizing the startup ecosystem. The author needs
to realize not every startup will become the next Facebook, and social
products that only achieve moderate success cannot turn a profit through
third-party advertising networks. The only possible exit for such startups is
a small exit and join a larger tech firm that can take both the ideas learned
and the talent and incorporate them into their larger goal. These startups
likely had high ambitions, but when growth peaked, they exited while they
still had a chance.

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johnrob
I smell a turnover strategy here:

1) Buy talent in the form of companies while they are still cheap because of
both the startup glut and the booming stock market (and thus yahoo stock
price).

2) When the inevitable downturn/crash happens, seize the moment to clean
house. Many other companies will doing the same so it won't be particularly
newsworthy.

3) The alternatives for the remaining employees will be much more grim at this
point, so they'll get to keep most of them for a good number of years in order
to build something revolutionary.

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hoi
Seems like a logical move. Since there is supposedly a dearth of A* developers
at Yahoo, since it appears many left in the previous years. This has made it a
less desirable place for great developers to work for. To change this image
and negative spiral, acquire good development teams. The products are
secondary. Yahoo becomes a more attractive place to work again. Looks like its
the early stage of rebuilding the team, before kicking it on to develop
products into growth mode.

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drorweiss
Interesting strategy to reinvent Yahoo!

Perhaps MM does not believe in the ability of Yahoo's existing human capital
to make the change. But is it enough, to "buy" (supposedly) good people and
bring them on-board? What about the big vision? More generally, I'm not even
sure if there's still room for a content company in the magnitude of Yahoo.

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coolsunglasses
I'm not bullish on Yahoo's movements of late, but people are getting catty.

Who is this article meant to help? Yahoo investors that aren't aware of how SV
works?

The whole article reeks of jealousy and hatefulness. Good to see that our
industry merits TMZ-esque content, albeit not to the same circus-esque depths.

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mindcrime
Dear Marissa:

The next logical step for Yahoo! is to move into the enterprise. I know a
great startup you could acquire that would accelerate your move into that
space. I expect it could be had for a very reasonable price. Call me.

Mindcrime

~~~
orangethirty
I also know of a nice search engine that will allow you to take over search
and advertising. Buy it now and also get an online programming school. But
wait, there's more! Mention code HN and I will double the offer. That is two
search engines, two online programming schools. All for the price of a cool 5
million buckaroos.

