|
|
|
|
|
|
by no_wizard
871 days ago
|
|
|
I didn't posit that a business should start off as a sustainable one. I asked what happened to building a durable business as a goal? I understand the VC model enough to know that sometimes for years you run red because you need economies of scale or some other engine to finally turn over and then at scale the business will start to generate bigger cash flow once it reaches that tipping point. Even if a bit simplified as an explanation, this isn't what I'm talking about. What I'm asking directly is why exiting to a big company became a goal in and of itself. Lots of VCs poured money into companies with the distinct hope that those businesses would at the very least be acquired. I think this is the silly part. Every investment should be from the perspective of can this be durable if standing on its own two feet? and a big acquisition is not something that should be taken into consideration as part of the investment and business building strategy of either the VC firms or the founders. That all got lost. Building a durable business should be the ultimate goal, and selling the business to a big company should be seen as lower status than it currently is. Its not that I'm saying acquisitions don't make sense sometimes, I'm not. However as far as goal setting and running a business is concerned, it shouldn't really be thought about as a viable fallback or exit strategy until its readily apparent and available, but that hasn't been true for some time now. VCs and founders often explicitly look at acquisition as one of their "success targets" and hopes for a business. Lots of people on HN have admitted that they started businesses with some hopes that they could possibly be acquired. That is the drift away from sanity I'm talking about. |
|
|
Every single founder I know (and I know a lot of them) doesn't build a business for the specific reason to be acquired. Is it a thought that crosses their mind? Definitely. Is it something investors think about? Absolutely.
But the day-to-day, 12 hour+ grind for them is all about product-market fit and drawing revenue - the things that make a durable business.