Do tech acquisitions create unrealisitc pressure on devs?

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danielwd

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#143250 8-Apr-2014 10:20

So it started with Trademe, and then Youtube, and then Instagram, and then Tumblr, and then Whatsapp, and so on and so on.

We know the people who created these businesses are just nerdy developers, like the rest of us, and now they make up the super-wealthy with billions in the bank.

As a developer myself, every time one of these acquisitions are announced, I find myself thinking "that could have been me, if only I'd thought up the idea."

It becomes so easy to imagine how you'd spend that billion dollars, if only your brain had come up with the idea and executed it.

Ten years ago, all of this was unheard of. Businesses that sold for billions were in traditional industries, established for decades, profitable, huge.

You did not create a billion-dollar company within 2 years.

The pressure to come up with the next big idea drives me a little crazy. Who else?

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#1020450 8-Apr-2014 10:20

Hmmmm. Here we go.

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Geektastic

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#1020462 8-Apr-2014 10:32

Well, I could possibly come up with the idea but unless you are talking 35mm film, I could not develop it.

Code may as well be Swahili for all the sense it makes to me. Even whatever BBCode is, is beyond my understanding - never mind HTML or anything more advanced than that. Despite being a Mac user for 10 years I still have no idea what a 'kernel' is unless you are discussing nuts and seeds.

Many of these billion dollar things either solve problems I never have or are to do with social networking which I do not really do. Thus it seems to me that I am unlikely to be inventing the next Big Thing! My app would probably automatically anonymise anything I did and delete any and all mentions of Facebook, Pinterest, Instagram or Twitter from anything I read.

Developments such as 'in app purchase' have destroyed mobile gaming too - all the games that look as though they may amuse and entertain me whilst on the train or whatever rapidly become pointless because you end up playing against people who just throw money at buying upgrades etc - which I guess is how the companies become billion dollar companies!

crackrdbycracku

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#1020480 8-Apr-2014 11:06

The only person who can place unrealistic expectations on you is ... you.

At any given time the world has about 10 to 12 true Rock Star guitarists. You know like Eric Clapton, Jimmi Hendrix or Slash. Does that mean that every other person who plays guitar, sometimes for a lifetime, and never becomes on of the chosen dozen or so has somehow failed?

No, it does not. People play guitar because they enjoy it. That is success within itself.

I know, people develop code for a living. It's a job. But if you are doing a job purely for the money you need a plan which will get you paid to do something you enjoy. Life is too short.

The multi-billion dollar stories we read are the result of a lot of factors, including luck. They are probably not the result of someone planning how to build a multi-billion dollar empire.

That is just what happens when you solve a simple problem in an elegant way, and a lot of other stuff which you have no control over happens.

Didn't anybody tell you I was a hacker?

gzt

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#1020481 8-Apr-2014 11:10

As a developer myself, every time one of these acquisitions are announced, I find myself thinking "that could have been me, if only I'd thought up the idea."

That's a common misconception. Study each example and identify the success factors. Hint: some critical attributes are not technical.

deadlyllama

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#1020482 8-Apr-2014 11:13

danielwd: So it started with Trademe, and then Youtube, and then Instagram, and then Tumblr, and then Whatsapp, and so on and so on.

We know the people who created these businesses are just nerdy developers, like the rest of us, and now they make up the super-wealthy with billions in the bank.

As a developer myself, every time one of these acquisitions are announced, I find myself thinking "that could have been me, if only I'd thought up the idea."

It becomes so easy to imagine how you'd spend that billion dollars, if only your brain had come up with the idea and executed it.

Ten years ago, all of this was unheard of. Businesses that sold for billions were in traditional industries, established for decades, profitable, huge.

You did not create a billion-dollar company within 2 years.

The pressure to come up with the next big idea drives me a little crazy. Who else?

It's the dot com boom all over again. You need more than a good idea. Most people seem to get through life quite happily without billions of dollars.

Geektastic

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#1020582 8-Apr-2014 12:58

deadlyllama:
danielwd: So it started with Trademe, and then Youtube, and then Instagram, and then Tumblr, and then Whatsapp, and so on and so on.

We know the people who created these businesses are just nerdy developers, like the rest of us, and now they make up the super-wealthy with billions in the bank.

As a developer myself, every time one of these acquisitions are announced, I find myself thinking "that could have been me, if only I'd thought up the idea."

It becomes so easy to imagine how you'd spend that billion dollars, if only your brain had come up with the idea and executed it.

Ten years ago, all of this was unheard of. Businesses that sold for billions were in traditional industries, established for decades, profitable, huge.

You did not create a billion-dollar company within 2 years.

The pressure to come up with the next big idea drives me a little crazy. Who else?

It's the dot com boom all over again. You need more than a good idea. Most people seem to get through life quite happily without billions of dollars.

Although they would probably get through it more happily WITH billions of dollars..!

As Zsa Zsa Gabor once said, anyone who says money cannot buy love just doesn't know where to go shopping!

sep11guy

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#1020622 8-Apr-2014 13:23

It's the dot com boom all over again. You need more than a good idea. Most people seem to get through life quite happily without billions of dollars.

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mattwnz

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#1020641 8-Apr-2014 13:54

It is really no different from winning lotto. There is a heck of a lot of luck for a good idea to be bought out. Even some of the companies that do get bought out aren't the best ideas anyway. It is just that the buyer can see potential in them. Although unlike lotto, you do have more control, and if you have agreat idea, set a goal and are committed, you do increase your odds of turning your idea into a
million dollar idea.

toyonut

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#1020708 8-Apr-2014 14:54

There are stats I have read about, but can't quote exactly but it is down to something like 1 in 10000 new apps make it big for their creators. As some others have commented, look at the true back stories, it becomes much more about timing, luck and contacts than an idea or even an execution. There are even times where a "billion dollar" app has copied most functionality of an existing one and then gone on to become the success story.

Try Vultr using this link and get us both some credit:

http://www.vultr.com/?ref=7033587-3B

sidefx

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#1020711 8-Apr-2014 14:59

Every time a big lotto winner is announced it puts pressure on me as an occasional lotto ticket purchaser to win lotto ;-)

EDIT: Awww, I see mattwnz beat me to it!

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mattwnz

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#1020757 8-Apr-2014 16:20

paulmilbank: There are stats I have read about, but can't quote exactly but it is down to something like 1 in 10000 new apps make it big for their creators. As some others have commented, look at the true back stories, it becomes much more about timing, luck and contacts than an idea or even an execution. There are even times where a "billion dollar" app has copied most functionality of an existing one and then gone on to become the success story.

So true. If you look at the most successful companies, they weren't he first to invent it. eg. Apple didn't create the first tablet or first touch screen phone, but they were able to take an idea and perfect it. I think that is the key as well as good marketing. The other thing is that many of these companies that are brought out, are either shut down, or left to rot. So some are purchased to remove that competition.

Ragnor

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#1020765 8-Apr-2014 16:35

Acquisitions are where start-ups without viable business models with large audiences go to die.

http://signalvnoise.com/posts/2565-acquisition-condolences

http://signalvnoise.com/posts/2777-what-happens-after-yahoo-acquires-you

Geektastic

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#1020813 8-Apr-2014 18:10

As with photography, there are many excellent photographers who fail because they are lousy businessmen and many average photographers who succeed because they are good businessmen.

Sidestep

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#1020820 8-Apr-2014 18:29

danielwd: It becomes so easy to imagine how you'd spend that billion dollars, if only your brain had come up with the idea and executed it.

You want to be an entrepreneur! Good idea.

Just be aware it can take an absolutely excellent product, hard work & dedication, luck and a perfect confluence of events - just to survive, and make a living for any length of time. Let alone become a billionaire.. and did I mention Hard Work?

And you can come up with that Next Big Idea, the perfect product, create a great little company, a solid market position - and then...

You consolidate, arrange finance - aiming for that next level - but new, similar, products appear, squeezing and overlapping yours, biting into your profits.

You're still a niche player and now your niche's compacting.

You take out personally guaranteed loans and plough the money into your business. Work 14 hour days. All year. Sell shares to friends and family, your Granny..

Suddenly you realise you're working 7 days a week, always on the road, compliance and taxes are becoming a nightmare, never seeing your partner, and you're paying your employees as much as you're making yourself just to keep them around.

You try to hunt for more employees with the same abilities and vision as yourself, but they're all morphing into the competition. Starting their own businesses.
So you start to think of cashing in - one of the larger players buying you out, and hint you might sell.

But - they scent weakness, their accountants & lawers do due diligence, shred your valuations, project your market share falling into the future.

They tell you that the business consists mainly of what's in your head.. start to make offers of a position and minor shareholdings in their companies, and little cash..

Now though, you can't work for someone else. You're spoiled. You're an entrepreneur.

So you flip the whole lot of them the bird, close it down while you can still pay Granny & Co back and maybe come out even.. and start to plan your next Big Idea..

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#1020920 8-Apr-2014 22:04

Sidestep:
danielwd: It becomes so easy to imagine how you'd spend that billion dollars, if only your brain had come up with the idea and executed it.

You want to be an entrepreneur! Good idea.

Just be aware it can take an absolutely excellent product, hard work & dedication, luck and a perfect confluence of events - just to survive, and make a living for any length of time. Let alone become a billionaire.. and did I mention Hard Work?

And you can come up with that Next Big Idea, the perfect product, create a great little company, a solid market position - and then...

You consolidate, arrange finance - aiming for that next level - but new, similar, products appear, squeezing and overlapping yours, biting into your profits.

You're still a niche player and now your niche's compacting.

You take out personally guaranteed loans and plough the money into your business. Work 14 hour days. All year. Sell shares to friends and family, your Granny..

Suddenly you realise you're working 7 days a week, always on the road, compliance and taxes are becoming a nightmare, never seeing your partner, and you're paying your employees as much as you're making yourself just to keep them around.

You try to hunt for more employees with the same abilities and vision as yourself, but they're all morphing into the competition. Starting their own businesses.
So you start to think of cashing in - one of the larger players buying you out, and hint you might sell.

But - they scent weakness, their accountants & lawers do due diligence, shred your valuations, project your market share falling into the future.

They tell you that the business consists mainly of what's in your head.. start to make offers of a position and minor shareholdings in their companies, and little cash..

Now though, you can't work for someone else. You're spoiled. You're an entrepreneur.

So you flip the whole lot of them the bird, close it down while you can still pay Granny & Co back and maybe come out even.. and start to plan your next Big Idea..

Scarily accurate...!!

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