
Yahoo Acquires Bread, Will Shut Down The URL Shortener That Earned You Money - daegloe
http://techcrunch.com/2013/10/11/yahoo-acquires-bread/
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neya
I just don't understand the logic behind aqui-hires. If a founder starts up
his own company, and if he is very serious about it, he will put in everything
he's got - his passion, his vision and his hardwork. It becomes an integral
part of his life somehow.

Now, suddenly a corporation pays the founder a large sum of money, makes him
shut down his company, literally erasing every single connection he had with
his creation. Now, no passionate founder would like to let someone destroy his
own company, his hardwork and passion. But even if he wanted the money, and he
thought if it's a good compromise, no passionate founder will think nor share
the same vision and passion for the corporate owning him as much as he had for
his own company. Obviously most of us startup because we don't want the
corporate life and we want something different. So, to aim to get into a
corporate by means of a startup is quite contradictory, no?

So, in essence, how does the corporation justify the investment for a semi-
passionate founder whose product has just been destroyed? They pay billions in
some cases, only to realize that the founder doesn't share his old vision and
enthusiasm anymore? How does this work? I will gladly love to be corrected on
this one. Someone with experience, please explain this cost justification to
me!

Cheers.

~~~
patrickyeon
The acquiring company gets the entire staff (or at least everyone who comes
along). Assuming the company being acquired has built up a decent product, you
can see the acqui-hire as a recruiting move, where you're hiring on a group
that has shown they can work together, ship product, and all the members have
already been vetted by somebody else. The purchase price is really just a
recruiter's fee and hiring bonus bundled together.

~~~
smsm42
And that hate their bosses' guts for ruining the thing they just spent a chunk
of their lives to do and were proud of, and now it's all turned to nothing.
But since they need money and they're offered too good a deal to refuse, they
swallow it and get in line. I'm not sure it' the best way to acquire talent.
Of course, that implies people cared about the thing they did, but isn't that
the kind of people you want to get?

~~~
cs02rm0
I've certainly seen in the past the founder give it a year or two, leave, take
anyone worth taking with them and then start over doing the same thing again.
Successfully too.

~~~
smsm42
Well, there's one thing when the gig runs over and people look for another
thing to work on. But the parent post talked about recruiting the whole team,
and as it often happens, just in the middle of successful and growing project
- that's the principle of acqui-hire, find somebody who is currently
successful and hire them out. If it's just a team looking for a next thing
after previous one run out of steam, there's no "acqui" part here since
there's nothing to acquire of value, it's just a regular hire.

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gojomo
"recommends users switch to dominant URL shortener bit.ly"

Often old links can't be changed – easily or even at all. (Tweets can't be
edited, for example.)

URL redirection is such a lightweight service that Yahoo/Bread should commit
to either redirect indefinitely or ship the mappings and domain off to someone
else who will.

~~~
pbiggar
Normally, I'd disagree, but part of starting a URL shortening company would
seem to be a commitment to keep it working in the future, partially because
its so easy and partially because URLs shouldn't die.

Charitably, we'll say they have a billion URLs. Each mapping is maybe
8bytes->256bytes. So they have a max of 264GB of data. That would fit on a
heroku postgres dev plan, and the code to run it would take a single engineer
half a day to put it on heroku.

~~~
deafbybeheading
While I agree this is not a huge engineering endeavor and Yahoo could do the
Internet a solid by making this work, our free dev databases are limited to
10k rows (and, as the name suggests, intended for development). Please don't
put a billion in them.

~~~
pbiggar
Fair. I was just trying to find a thing they could stick this on for basically
nothing. The $49 plan would have been fine too.

FYI, I didn't notice this limitation on the pricing page.

~~~
deafbybeheading
Oof, you're right--sorry about that. The addons page [1] has the right
pricing, but our own pricing page is incorrect. I'll make sure we get this
updated. Thanks for pointing it out!

[1]: [https://addons.heroku.com/heroku-
postgresql](https://addons.heroku.com/heroku-postgresql)

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curiouslurker
Really bugs me the kind of ideas that getting funding. Some of us have viable
businesses that need funds to scale but just don't have the right pedigree.

~~~
pbiggar
It seems you're implying that VCs - people who invest money for a living -
care more about pedigree than profit.

Now I don't mean to imply anything about yourself or your business, but is it
possible there might be a different and perhaps simpler explanation for
whatever you're bugged about?

~~~
pppppowerbook
He didn't imply that at all; if M&A execs also care more about pedigree, then
pedigree is a great way to drive a VC exit, especially compared to building a
business that actually makes a profit.

~~~
pbiggar
Acquihires dont move the needle for VCs.

~~~
001sky
That's like saying F's don't impact your GPA. The reality is that returning
capital does materially impact returns. The median VC is in an asset class
whose returns are pretty poor.

~~~
pbiggar
I think you're saying that they move the needle down? That's not how it works:
only the returned money counts, so if you return none, or only a little, the
needle doesn't move up.

~~~
001sky
Its called return <on investment>, so yes it matters. Absolute returns are
fine, but force lager returns from winners to compensate for zeros when
measured on an ROI basis. And all VC's are marketed on ROI, not absolute
returns (for obvious reasons).

~~~
pbiggar
ROI is based on absolute returns. But more importantly, they gain actual
dollar amounts from a sale. If they invest $3.5m from their $200m fund, and it
returns $5m, they could care less. They're looking for the company that
returns $50m or $350m.

The post I was responding to was saying that VCs were motivated by acquihires
("a great way to drive a VC exit"). Debating the semantics of needles and ROIs
is pointless. VCs are unmotivated by small gains and small businesses, and
wont even invest in a company that can't promise to be valued above $100m one
day.

~~~
001sky
Your making silly assumpyions about VCs and how they operate, ones that you
can't justify. An easy exit that returns 20-45% on a 1-2 year investment is a
no-brainer if the only other option is going to zero in a time-wasting pain-
in-the-ass situation. That is quite distinct from saying that this "ideal"
investment sold to LPs. And its quite distinct from rational "binary bets".
While VCs screen based upon threshold potential returns, the probability of
being a 10x company <even after passing the screen> is order of magitude <10%.
So, its silly to say that all vc exits are large exits. But since exits have
more prestige than chapter 7s, disquising your failures as exits has <value>.
If you can do this with non-dilutive financial returns, you a strategy that
may be better than the alternative/s.

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aheilbut
I am on this internet thing a lot, and I have never once heard of or seen a
link to bre.ad

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mikiem
If they are being acquired and shut down, but the Bread employees are joining
Yahoo... isn't this an "Acquihire"?

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cheesylard
If anyone is missing Bread, my friend made a service that is exactly like it:
[https://shrinkonce.com/](https://shrinkonce.com/)

~~~
easytiger
> ShrinkOnce allows users to take a link to a file, website, or video and lock
> it with a survey

That sounds terribly annoying

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dingaling
What amused me about the bre.ad overview video (
[http://vimeo.com/23834665](http://vimeo.com/23834665) ) was the 'shortened
URL' example which maintained a www prefix...

That's all that amused me.

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yefim
Congrats to the team. Title made me double take for a second there.

~~~
jordanthoms
"Yahoo acquires bread, will serve in company cafeteria?"

~~~
nomedeplume
No go. Marissa wants them to eat cake.

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kwestro
They could have been toast from running out of dough. Luckily they found a
breadwinner to help them rise to the top.

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thedrbrian
So what's in this for yahoo?

