[ama729]

From Predictive Edge website:

  Many thanks to you all for your feedback & support, and here's to a
  new chapter!

From Our Incredible Journey (http://ourincrediblejourney.tumblr.com/):

  An incredible journey is:
  
      One company buying another and closing its services down. This is a
  purchase of the second company’s staff, rather than their product. An
  acquihire.
  
  If you look through the archives this is what all the incredible
  journeys have in common. A company gets bought, its staff are excited
  (publicly, anyway) about their new home, but sorry that the service
  which brought them to the attention of their new bosses will have to be
  closed. “But thanks for joining us on our incredible journey!”
  
  This is what is galling. A company that can afford to pay millions for
  some new staff but not for what those staff built. The people who used
  the service, and invested their belief and time in uploading photos, or
  forming friendships, or logging data, are left to find new virtual homes
  while their former hosts enjoy a nice (if possibly delayed) payday.
  
  This repeated pattern only encourages more people to create flashy
  services that have no hope of being sustainable businesses in their own
  right, but may survive long enough, with VC funding, to attract the
  attention of a large company eager for new ideas and staff.
  
  It’s one thing for companies to go bust, or to close their service
  after failing to make it work. This is business. It’s capitalism. But
  starting services only to close them a couple of years later when payday
  arrives is a vicious way to treat people.

[patio11]

Have you ever seen e.g. a pizza joint, bowling alley, etc shut down? You could write the letter that gets posted in the window with a Markov chain. It is practically identical to the widely satirized language used by startups.

"After 43 years in business, Joe's Pizza will be shutting down after July 10th. Thanks for your patronage over the years. We'll miss you."

Modulo individual stylistic choices, this is the appropriate level of social niceties between a business and a customer. Joe's Pizza is not obligated to say that their bookkeeper embezzled $300k, they misjudged the pizza market, or Joe's heart just isn't in pizza anymore. You paid, you got your pie, and you and Joe are even.

[smacktoward]

Yes, but most of these companies are selling services, not products. If I was buying a downloadable software product from them, the you-got-your-pie analogy would be more apt; sure, the company went out of business, but I still have the product I bought and can continue to use it. Services don't work like that; when the company goes away, the product goes "poof" and disappears. Even if you paid in advance for long term use of it! Which makes people confused and/or resentful.

This is the downside of the Everything-As-A-Service model: services are a commitment. Customers aren't buying a product, really, so much as they're buying a relationship with you and your team. The only way you can sell a relationship is by convincing people that you're serious about it -- that you're in it for the long haul. So if the next week you announce that you really weren't...

[patio11]

In selling actual services to businesses -- the kind they pay tens of thousands for -- they'd often prefer to have a relationship with you. And you do have a relationship. It is a professional relationship and governed by contracts. They owe you what is written in the invoice, you owe them what is written in the SOW, and after acceptance you're square.

This actually comes up in negotiations. "We'll need a follow-up engagement in six months." "I might be available for a follow-up engagement in six months." "Can you guarantee it?" "I am amenable to selling you a guarantee." "Selling a guarantee? We don't want to pay extra. We just want to schedule an engagement six months from now, if we need one." "In that case, you can wait five months and ask to schedule an engagement. I'll generally try to slot you in, subject to my then-prevailing rates and availability."

I think you think that using a SaaS gives you a free option on service next month. This is... an unusual understanding of how business services work.

If you absolutely need continuity of service that is something you can buy. Many HNers do not understand that it is really freaking expensive. If you are paying $29 a month and don't remember signing custom language guaranteeing it you probably have not bought it.

[Silhouette]

I think you think that using a SaaS gives you a free option on service next month. This is... an unusual understanding of how business services work.

That might be true technically, but it's certainly a common expectation among organisations that use SaaS offerings.

Moreover, it is a necessary expectation for many of those services to be commercially viable. Frequently the time and resources invested in integrating someone else's service will take a significant period to generate a net positive return and outsourcing will incur a significant degree of risk. If decision makers didn't have a good faith belief that a service they were planning to integrate would remain available for a useful period of time, approximately no-one would ever sign up in the first place.

Obviously many businesses do offer services that, according to their fine print, do not provide any such guarantee. They rely on their potential customers either not noticing or not caring enough to prevent them from buying.

(If you disagree, then if you'll forgive me for using a personal example for a moment, I invite you A/B test Appointment Reminder's current home page against a factually accurate version that does not make any claim that is undermined by the fine print in your Terms of Service. For example, instead of "Clients get a reminder call or text message prior to their appointment" in your main graphic, you could write "Clients might get a reminder call or text message prior to their appointment, or they might get it late or not at all.")

IMHO, current trends like launching MVPs and exiting via acquihires are therefore poisoning the well. Potential customers of future services will, quite rightly, be suspicious of those services' reliability and longevity, and otherwise viable businesses may fail purely because of trust issues.

In the interests of fair disclosure: My own businesses depend on very few such services, and without any exception I can immediately think of, either those services are conveniences rather than critical to business operations or their providers have given legally actionable guarantees about their intentions/exit scenarios.

[patio11]

I wasn't going to mention it, but since you asked, my answer when somebody asks this for AR on the publicly available plans is: "I have been in business since 2006. AR has been my main product focus since 2010. I don't have any current plans of exiting the business any time soon. At the same time, I'm a one-man operation. If you were to say you feel less sure that I'm going to be around than $COMPETITOR, I'd say you're probably right. I'd also say that you can always get me to answer your email and their CEO wouldn't even know much less care that you exist. Your call." ($COMPETITOR is a well-known company in the space with eight figures in revenue whose minimum buy-in is close to the maximum I've ever charged a client.)

If you were on one of the non-publicly-available plans, you'd get language similar to "Vendor agrees to provide services as per the attached Statement of Work for the Contract Term as specified in the attached Statement of Work." That means exactly what it and related contractual terms say. It isn't like continuity of service is something that e.g. hospital systems suddenly realized they needed in 2004. They quite literally have similar contractual guarantees written in their contract for garbage disposal.

[Silhouette]

You rather deftly sidestepped my main point there. :-)

Again, I don't really want to focus on Appointment Reminder specifically because obviously it's not as if you're running the only service in the world that does this, but it does make a good example here. Objectively, almost every major claim on the Appointment Reminder home page -- meaning the things that really matter to a prospective customer, including literally the entire benefit someone would get from signing up to use the service -- is undermined by the wording in the Terms of Service.

It may be true that if someone asks explicitly then you give them an honest answer about your situation. I've certainly no reason to doubt you do. On the other hand, does an average small business outside the start-up world actually ask? I can't imagine anyone working the reception desk at my dentist or optician is going to be sufficiently aware of the legal and business environment to consider that a service advertised as Appointment Reminder is might not actually promise to do anything of value at all.

At this point, AR is becoming a bad example, simply because by its nature it falls into the category I described as being convenient but not critical. (No slight is intended by this comment, but I imagine any business that has so many missed appointments that it would be in serious trouble without AR has bigger problems than anything we're discussing here.) However, if we were talking about a service that hosted the professional's calendar of appointments, or their CRM database, or their payment system, and these services were known to be at significant risk of disappearing overnight, how many other small businesses would really sign up to use them?

[bhewes]

Windows XP being an example of something corporations paid millions to keep in service.

[PhasmaFelis]

There's a difference between putting a brave face on failure, and telling people who depended on you how excited you are that you won't be serving them anymore.

[ama729]

Except an Incredible Journey is not a normal shut down, it's the shutdown of a company, because the buyer took the thing it was interested in and then ran away.

So in your case, it should rather read:

"After 43 years in business, Joe's Pizza will be shutting down after July 10th because of its acquisition by Pizza Hut, which will tore down the place and puts its own pizzeria here. Be happy we got rich!"

People gets emotional with place they go to or things they use, you can think it's irrational, but it's just a fact of life.

[sogen]

edited:

" After 43 years in business, Joe's Pizza will be shutting down after July 10th because of its acquisition by Pizza Hut, which will tore down the place and leave nothing in here, zip, zero, nada. Be happy we got rich!

Adios amigos! "

[rubiquity]

Joe's pizza stays in my body for 24 hours, hopefully. My data is in that service forever.

[tptacek]

I'm always confused by this mentality people have that teams aren't entitled to disband, or at least they're not entitled to do it for money. Who at this point can claim not to know how startups work? Who's getting the rug pulled out from under them?

It's a job. It's not a moral crusade.

Are you worried that some service you use and adore might get snatched up by Dropbox? Here's a good rule of thumb: if they're blowing the doors off the market, they're probably not going anywhere. If not: they're eventually going to get picked off by a bigger team that can make more money from the talent.

[CaveTech]

It's not that they're not entitled to disband, it's that they make it seem like the community should be happy for them. Outside of companies with cult-like status, it's the product people care about, not the team. Why would anyone be happy that a service they need/love is getting shut down?

[tptacek]

If you like the people that work there, you're probably happy they found a soft landing.

[joe_the_user]

Why would you like people who just happen to run a website you find convenient? It's not like you shake their hands each time you click through or something.

And after they decide it's more convenient for them to shut down that website, it's kind of bizarre to think their ex-customers would want to have a personal relationship with them.

[bitJericho]

Because sometimes people like human friendships?

I buy and support a number of services and products where I would jump at the chance to shake the founder's hand and be their best friend! Sometimes it's about the people more than just the product. I'd buy a product site-unseen from certain people.

[onan_barbarian]

It's generic positive spin. Honestly, what would you expect to see?

In other news, the guy who speaks to you on the way out of the superstore probably doesn't care whether you have a nice day or not. Also, when the CEO of that big company steps down, he may not actually be planning to spend more time with his family.

[sheetjs]

> The people who used the service, and invested their belief and time in uploading photos, or forming friendships, or logging data, are left to find new virtual homes while their former hosts enjoy a nice (if possibly delayed) payday.

In a startup acquisition that would garner the approval of the author of the blog (and many others), the founders would, at the very least, find a way to slowly unwind the service. It wouldn't be an abrupt shutdown, leaving customers in the lurch. IT would be carefully planned.

At the very least, the founders should care enough about their users to make sure the service runs for a reasonable amount of time.

[patio11]

At the very least, the founders should care enough about their users to make sure the service runs for a reasonable amount of time.

A business using a B2B service who wishes to have the service around N months from now has an option to achieve this. It is called "a contract." You can call up your local sales team and ask for prices. It is absolutely a thing you can buy.

If you do not get contracts which guarantee that a vendor will provide you with the services you require, anticipate that business will frequently work out in a fairly rough fashion for you.

[tjmc]

I'm less familiar with US law than that of commonwealth countries, but in Australia/UK/NZ at least a contract is automatically formed when there's been an offer, acceptance and payment for a service in advance. ie. If you've paid for a year's service and that service goes away after a month you're entitled to compensation for the rest.

[patio11]

If you pre-pay $29 * 11 for a SaaS app in the US, and the service closes a month later, you've got a claim against the merchant for ~$290. You almost certainly don't have a breach of contract remedy, because they are not failing to perform under your contractual relationship, and your contractual relationship almost certainly limits damages to the amount you've paid.

You can also probably get your bank to do a chargeback, and they might give you all $319, because it isn't worth their time to do math.

[sheetjs]

I think you miss the thrust of the original argument. No one, especially not the author of the blog, argued that there was a legal requirement. The point here is that the founders arguably got to their position because people entrusted them with services. To defend the blatant disregard for users is to attack the very thing that enabled the exit in the first place.

[tptacek]

Patrick killed my answer; he's nailed it:

If you're complaining that someone acquhired your favorite service, you were being heavily subsidized by a venture capitalist.

[rurounijones]

So the gist is:

SaaS taken VC funding? Do not touch them if you will rely on their service because they might suddenly disappear in an acquihire and you should have expected it, ingrate. [1]

it is Sound advice, although if everyone took it to heart none of these start-ups would succeed in the first place because no one would use them because of the expectation they will be gone shortly. [1]

Poisoning the well of goodwill for future start-ups.

[1] Unless you can get a contract for X months / years of service as detailed by patio above... I cannot remember this as an option by any of the SaaSs that feature on YC. They try to be low friction "Just put your credit card details in, pay monthly and ignore the elephant." They RELY on people ignoring the above.

[tptacek]

You sound shocked, shocked to have thought of the most common sales objection in the history of startups. Sell any product to a real business and see how long it takes that concern to come up. Memetically, it predates "acquihires" by more than 15 years.

[rurounijones]

I was trying to sum it up in a short'ish manner. However https://news.ycombinator.com/item?id=7975185 does it a lot better than me.

[patio11]

There exist companies funded by YC which have enterprise pricing available. All of them will guarantee services being available for the entire contractual term, subject to the usual. (Contracts, paying shedloads of money, etc.)

[birken]

Or they were subsidizing the service with their talent that could have been more productively used elsewhere. People who don't understand this just don't understand business.

Even great HN heroes like Elon Musk (who sold paypal to ebay) aren't doing stuff for charity, they are doing it for profit. Sometimes a personal crusade makes straight monetary profit less important, but most of the time it doesn't.