

Pivotal Labs Acquired? - freejack
http://gigaom.com/2012/03/13/pivotal-labs-is-in-takeover-talks/

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buro9
I really hope that this isn't just a talent acquisition or the conversion into
a pure professional services agency without products... I hope that the long-
term life of Pivotal Tracker can be guaranteed.

I rely on Pivotal Tracker. I actually love using it, it's made programming a
joy as it's made the chore of project management a useful and almost
satisfying thing to do.

In recent years I've relied on other products from companies that, having been
acquired, are either "improved" so that they no longer work for my purposes or
shut down.

It gives me a nagging feeling that people aren't in this to produce great
products for the long term. I really want to be proved wrong, especially with
Pivotal Tracker, because after having used so many other tools for project
management I cannot imagine having to go back to them.

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cog314
I guess Square. Why?

1\. Pivotal's business is solid, and growing. But they must feel chagrin when
they can only charge consulting fees while their clients, whose products they
helped build, are going to be creating hundred-millionaires in short order.
This might persuade Pivotal to give up their future business potential in
exchange for stock options to share in the goodness. This rules out Google.

2\. Twitter doesn't really need more programmers. It needs to figure out how
to monetize. So Twitter+Pivotal is not worth that much more than Twitter
alone.

3\. Square has obvious potential, proven monetizability, and the only thing
holding them back from chasing the huge array of obvious opportunities is a
lack of programming talent. If they go too slow, their well-funded competitors
(Visa, Mastercard, PayPal, banks) may well beat them to some markets. There's
definitely a first-mover advantage to getting payment devices in the hands of
businesses in any given market.

All this should incentivize Square to offer a large chunk of stock to Pivotal,
which should incentivize Pivotal to be acquired by them.

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nowarninglabel
This may explain the rager party going on next door... (Pivotal Labs is in our
building).

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studobalina
Companies that Pivotal has extensively worked with: Twitter, Square, and
Google.

The first two seem, well, obvious. I can count many Pivots that ended up at
Twitter over the last 2-3 years. Both companies rely on Ruby/Java and SF's
talent pool is practically drained.

A Google acquisition, while far fetched, also makes sense given that Pivotal
is stacked with agile/Java broskis. Hard to imagine what the Pivots would work
on. Android? Google+?

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gleenn
I don't think they've ever worked for Square.

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andycroll
Proof perhaps that running an extremely high-quality client-services business
also has potential for an exit in the same way a startup does?

(Whilst also generating healthy profits in the meantime.)

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patio11
I don't know why this is downvoted. Apples fall from trees, water is wet, and
consulting businesses can be sold for money. Happens all the time.

Valuations are calculated very, very differently than for product businesses.
There exist consultancies which have sold for amounts in excess of every YC
company which has exited through today, although I don't know of any examples
off the top of my head which rival Dropbox / Airbnb / etc.

But I'd you're doubting that e.g. you can sell a consultancy for $20 million
or $200 million, you're doubting an observable feature of material reality.

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glimcat
* Many startup acquisitions are speculated or known to be about acquiring the team rather than acquiring the product.

* Consultancies are nominally the experts you call to compensate for gaps in your inside staff.

* You can run a contract with a consultancy first, and consider acquisition only if it goes well and if their people fit well with your people.

If you were aiming for that particular exit strategy, it sounds like it could
be much more effective than building a random web / mobile product without a
sustainable revenue model beyond "get funding, hope it lasts until someone
buys you."

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n8agrin
For obvious reasons I'm guessing Twitter or Square. Though I wouldn't be
surprised by a Salesforce acquisition either.

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ajhit406
My best guess is a very large company who was in a hiring crunch and made an
offer they couldn't refuse. Twitter or Salesforce are good guesses.

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jeremymcanally
It's interesting how big companies have gone from attempting to cobble
together teams to simply slurping up existing ones. Inter-product acquirhires
(buzzwords, ahoy!) like Twitter + Posterous and cases like this, Github +
Ordered List, and so on are becoming more and more common. I think it's
interesting (and, of course, helpful to me as a consultant that works in the
same spaces as these guys and gals), but I wonder if there will be any larger
negative impact from it?

I can't see any, but I don't know if I can see the whole picture or not.

~~~
freejack
Well, its probably a bit early to say this was a talent acquisition. Pivotal
is a real company with customers and revenue that could be attractive to any
number of larger companies on the basis of any of their assets.

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ksec
I was guessing it would be GitHub.

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dazoot
I think Atlassian is on a shopping spree again. After HipChat now Pivotal.

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viraptor
And every place they touch, they break the in-page search shortcut. Why can't
they leave my '/' key alone? The last service it hit was bitbucket.

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obiefernandez
Kind of makes me wish I had held on to Hashrocket a bit longer :)

