The quote of the article right there... That's brilliant.
This link has been bookmarked by 65 people . It was first bookmarked on 15 Apr 2008, by Terry Jones.
-
11 Sep 17
-
Tip for acquirers: when a startup turns you down, consider raising your offer, because there's a good chance the outrageous price they want will later seem a bargain. [1]
From the evidence I've seen so far, startups that turn down acquisition offers usually end up doing better. Not always, but usually there's a bigger offer coming, or perhaps even an IPO. -
More likely the reason is that the kind of founders who have the balls to turn down a big offer also tend to be very successful. That spirit is exactly what you want in a startup.
-
Corporate M&A is a strange business in that respect. They consistently lose the best deals, because turning down reasonable offers is the most reliable test you could invent for whether a startup will make it big.
-
The reason there aren't more Googles is not that investors encourage innovative startups to sell out, but that they won't even fund them.
-
VC firms present an image of boldly encouraging innovation. Only a handful actually do, and even they are more conservative in reality than you'd guess from reading their sites.
-
The low cost of starting a startup means the average good bet is a riskier one
-
Howard Aiken said "Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats."
-
They're terrified of really novel ideas, unless the founders are good enough salesmen to compensate.
But it's the bold ideas that generate the biggest returns. Any really good new idea will seem bad to most people; otherwise someone would already be doing it. -
The biggest factor determining how a VC will feel about your startup is how other VCs feel about it. I doubt they realize it, but this algorithm guarantees they'll miss all the very best ideas. The more people who have to like a new idea, the more outliers you lose.
-
Why are VCs so conservative? It's probably a combination of factors. The large size of their investments makes them conservative. Plus they're investing other people's money, which makes them worry they'll get in trouble if they do something risky and it fails. Plus most of them are money guys rather than technical guys, so they don't understand what the startups they're investing in do.
-
What's Next
The exciting thing about market economies is that stupidity equals opportunity. And so it is in this case. -
I like angels, but there just aren't enough of them, and investing is for most of them a part time job.
-
as it gets cheaper to start startups, this sparsely occupied territory is becoming more and more valuable.
-
Startups have gotten cheaper. That means they want less money, but also that there are more of them. So you can still get large returns on large amounts of money; you just have to spread it more broadly.
-
Either VCs will evolve down into this gap or, more likely, new investors will appear to fill it.
-
And that will get us a lot more Googles. At least, as long as acquirers remain stupid.
-
[1] Another tip: If you want to get all that value, don't destroy the startup after you buy it. Give the founders enough autonomy that they can grow the acquisition into what it would have become.
-
-
17 Oct 14
-
ram them down
-
-
29 Jul 09
-
Howard Aiken said "Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats."
-
-
23 Feb 09
-
31 Dec 08
-
14 Nov 08
Marc VermutNice thought piece on the middle space in startups and the changing economics
-
22 May 08
ken .Umair on what-if Microsoft had acquired Google (shudder) - Linus Pauling wrote "The best way to get a good idea is to get a lot of ideas" - but do it together because "Any really good new idea will seem bad to most people; otherwise someone would already be doing it" - collaborative diffusion v knowing/judging
collaboration complexity creativity culture dialogue failure google innovation knowledge meaning principles process quotes simplicity social technology trust teamwork via:ethan_t_hein
-
21 May 08
-
13 May 08
-
07 May 08
-
04 May 08
-
27 Apr 08
Olivier LejadeIt's amazing how much game publishers act like VCs...
-
19 Apr 08
-
18 Apr 08
-
17 Apr 08
-
More likely the reason is that the kind of founders who have the balls to turn down a big offer also tend to be very successful. That spirit is exactly what you want in a startup.
-
"Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats."
-
But it's the bold ideas that generate the biggest returns. Any really good new idea will seem bad to most people; otherwise someone would already be doing it.
-
-
16 Apr 08
-
-
Umair Haque wrote recently that the reason there aren't more Googles is that most startups get bought before they can change the world.
-
More likely the reason is that the kind of founders who have the balls to turn down a big offer also tend to be very successful. That spirit is exactly what you want in a startup.
-
The most surprising thing I've learned is how conservative they are. VC firms present an image of boldly encouraging innovation. Only a handful actually do, and even they are more conservative in reality than you'd guess from reading their sites.
-
most VCs are driven by consensus, not just within their firms, but within the VC community. The biggest factor determining how a VC will feel about your startup is how other VCs feel about it. I doubt they realize it, but this algorithm guarantees they'll miss all the very best ideas. The more people who have to like a new idea, the more outliers you lose.
-
Why are VCs so conservative? It's probably a combination of factors. The large size of their investments makes them conservative. Plus they're investing other people's money, which makes them worry they'll get in trouble if they do something risky and it fails. Plus most of them are money guys rather than technical guys, so they don't understand what the startups they're investing in do.
-
I've tried to explain this to VC firms. Instead of making one $2 million investment, make five $400k investments. Would that mean sitting on too many boards? Don't sit on their boards. Would that mean too much due diligence? Do less. If you're investing at a tenth the valuation, you only have to be a tenth as sure.
-
-
15 Apr 08
-
-
This has a nice sound to it, but it isn't true. Google's founders were willing to sell early on. They just wanted more than acquirers were willing to pay.
-
when a startup turns you down, consider raising your offer, because there's a good chance the outrageous price they want will later seem a bargain.
-
turning down reasonable offers is the most reliable test you could invent for whether a startup will make it big.
-
money guys undervalue the most innovative startups.
-
bold but unscrupulous
-
more like bureaucrats
-
Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats.
-
Add Sticky NoteThe exciting thing about market economies is that stupidity equals opportunity.
-
-
VCs are money managers.
-
But the startup world is evolving away from their current model.
-
-
Brent SordylThere are VCs will give $20k to a startup that has nothing more than the founders, and that will give $2 million to a startup that's already taking off, but there aren't enough investors who will give $200k to a startup that seems very promising.
-
billybsmall groups of people who invest in startups between $100k-$200k. seems like something worth investigating...
-
FruFru FourOneUmair Haque wrote recently that the reason there aren't more Googles is that most startups get bought before they can change the world.
Public Stiky Notes
Would you like to comment?
Join Diigo for a free account, or sign in if you are already a member.