Why a lot more startups are going to get acquired this year(founderware.co)
founderware.co
Why a lot more startups are going to get acquired this year
http://founderware.co/silicon-valley/2012-is-for-buying-startups/
5 comments
As someone who is trying to do hiring right now, I can agree with this. With all the money flowing into startups right now, it's getting more and more difficult to hire talented people, because they are all (rightfully) working on their own thing.
It's definitely better to be an investor right now than someone trying to hire.
It's definitely better to be an investor right now than someone trying to hire.
So, might I propose that this is actually a symptom of a larger problem (which you seem to hint at) – irrational exuberance and the (re)inflation of a tech bubble that's getting dangerously close to its peak?
I've gotten downvoted for this idea recently, but I really do think that the signs are there – there's a supply/demand imbalance in the labor market because money is flowing easily and everyone's getting funded (thus inspiring more startups who further compete for labor)
So, either this means that there are tons and tons of great ideas (with equally good executions/plans) out there right now or we're seeing a return to the wild days of bubbles-past. In either case, however, it's likely not genuinely sustainable.
Sure, there's some reason to see a lot of genuine, sustainable growth in the tech world – the world's going digital so old markets go into a new medium, either with old players pivoting or new players supplanting them – but my gut tells me that's not all that's going on here.
But, then again, I'm probably just pessimistic...
I've gotten downvoted for this idea recently, but I really do think that the signs are there – there's a supply/demand imbalance in the labor market because money is flowing easily and everyone's getting funded (thus inspiring more startups who further compete for labor)
So, either this means that there are tons and tons of great ideas (with equally good executions/plans) out there right now or we're seeing a return to the wild days of bubbles-past. In either case, however, it's likely not genuinely sustainable.
Sure, there's some reason to see a lot of genuine, sustainable growth in the tech world – the world's going digital so old markets go into a new medium, either with old players pivoting or new players supplanting them – but my gut tells me that's not all that's going on here.
But, then again, I'm probably just pessimistic...
It's starting to show, but we're about two or four years off from the real meltdown. Real bubbles happen when the general public starts throwing their money in, which hasn't quite happened yet.
My bet is more like 12-18 months... but, I'll say this much – the sooner it happens, the better it is for the industry. If there's enough time for the general public to get caught up in the run-up, it's going to be an even bigger fall with a longer recovery.
A bit of realism now would save us from pain down the road.
A bit of realism now would save us from pain down the road.
Give it a few more weeks, we are almost there
Have you looked in places outside of the traditional NYC/SV/Seattle area? Not sure where you are located, but it might be worthwhile to look around for talent where nobody is looking.
Colleges where your team has some connection are great. Especially if they aren't Stanford, Berkeley, MIT, or Harvard.
The other side of that is that tech companies based outside the NYC/SV/Seattle area don't get funded at NYC/SV/Seattle-style valuations. (likely because those cities are where the tech company investors are). And to start a tech company, you do need your company to be based where your developers are.
While I understand remote workers participate less in building the corporate culture, there is no reason you can't have talented developers work for you and supplement your team if you expand your hiring scope to include freelancers or remote workers.
We look all over the country, but Netflix (where I work and hire for) doesn't really do remote employees, so we ask them to move to Los Gatos. Unfortunately this means we are looking at people who are already willing to move.
"doesn't really do remote employees"
That might be the crux of your problem (and the problems a lot of other companies are having with hiring). This is just my totally biased outside perspective, but it's easy to get remote work right now. Why in the world would I ever want to move to California?
I'm seeing this become an issue a lot with companies that need good development talent but just don't understand that it might not be something they can find locally. Good developers can (at least right now) live wherever they want in the country and make plenty of money. Apologies to anyone living in, say, Wichita, but why would I move there* if I didn't have to? By forcing your development teams to be local, you're limiting your talent pool or you're picking up C-grade developers from other places who are desperate for a job.
* The barbecue -is- pretty darn good
That might be the crux of your problem (and the problems a lot of other companies are having with hiring). This is just my totally biased outside perspective, but it's easy to get remote work right now. Why in the world would I ever want to move to California?
I'm seeing this become an issue a lot with companies that need good development talent but just don't understand that it might not be something they can find locally. Good developers can (at least right now) live wherever they want in the country and make plenty of money. Apologies to anyone living in, say, Wichita, but why would I move there* if I didn't have to? By forcing your development teams to be local, you're limiting your talent pool or you're picking up C-grade developers from other places who are desperate for a job.
* The barbecue -is- pretty darn good
I'm sure you're also facing some problems finding folks to move due to the high cost of living in Northern California.
I've been open to moving out there for jobs, but based on what I've seen, the salaries aren't high enough to offset the tremendous cost of housing. Especially for those who come with families and school age children.
I've been open to moving out there for jobs, but based on what I've seen, the salaries aren't high enough to offset the tremendous cost of housing. Especially for those who come with families and school age children.
I just took a quick look at the engineering page at jobs.netflix.com and over 3/4 of the postings have "senior" in the title.
Maybe you should focus a little less on finding people who have already done the job you think you're looking for and focus a little more on finding smart people who can develop into the people who can do the job you haven't thought of yet?
Maybe you should focus a little less on finding people who have already done the job you think you're looking for and focus a little more on finding smart people who can develop into the people who can do the job you haven't thought of yet?
Has it been considered to set up an office somewhere people want to move (seattle, portland, etc)?
I know a couple of businesses that have opened up portland offices to try to attract new talent that wasn't interested in moving to cali.
I think netflix even has a support center out in hillsboro somewhere already.
I know a couple of businesses that have opened up portland offices to try to attract new talent that wasn't interested in moving to cali.
I think netflix even has a support center out in hillsboro somewhere already.
That is unfortunate. Could you have part of your team move out of Los Gatos to another area? Or perhaps set up a remote office in a secondary city for people to gather at? I know Facebook has one in Austin and I could bet it had to do with the talent crunch.
Netflix? Well, your reputation is driving people away. Check out glassdoor.com reviews
You're right. I've found a number of people in the Montreal area. Especially since salaries are comparatively low up there.
> It's definitely better to be an investor right now than someone trying to hire.
In the previous tech bubble, hiring managers did not compete: the usual way of competing in tight markets is to raise the bid.
I assume that withdrawal from competition will be the same strategy during this bubble, because engineering hiring managers rarely hold the purse strings.
In the previous tech bubble, hiring managers did not compete: the usual way of competing in tight markets is to raise the bid.
I assume that withdrawal from competition will be the same strategy during this bubble, because engineering hiring managers rarely hold the purse strings.
I disagree with the last statement. Many of these early acquisitions are poor for the investors.
And yet companies (and I'm going through this with my employer right now!) refuse to consider remote workers. Working in the bay area is kind of a shitty deal: evaluated economically, it's probably a better bet to live in the midwest where $200k instead of $600k buys you a decent home.
Especially after you factor in taxation. I live in Toronto, which is probably the second most expensive city in Canada, and I would rather earn 35k in northern Ontario than 60k here, even if the taxes were equal but after the taxes are taken into account it gets all the more crazy.
The only thing stopping me from moving to a little cabin in the woods is that I like to spend time around intelligent people interested in the same things I am, which is impossible in the boonies.
The only thing stopping me from moving to a little cabin in the woods is that I like to spend time around intelligent people interested in the same things I am, which is impossible in the boonies.
It is similar here in the UK, though without the regional tax variation (though there are some differences: if you have children in education, being from Scotland rather than England can have some significant advantages).
I live and work in York which itself isn't a chap place to live (both property purchase and rental prices are relatively high). I could earn more in other parts of the country, specifically London, but once you factor in the higher living expenses (or the travel time and associated costs if you tried to commute) a lot of that extra is lost and that which I would keep isn't worth the change at the moment (I like living and working in this area and don't like the idea of permanently remote working, and currently have enough job/career security that I don't feel like taking a punt on something completely new right now).
Similarly, there are places where jobs like mine pay less but the cost of living is lower - I know people with more money in their pocket at the end of the month than me because of this.
I live and work in York which itself isn't a chap place to live (both property purchase and rental prices are relatively high). I could earn more in other parts of the country, specifically London, but once you factor in the higher living expenses (or the travel time and associated costs if you tried to commute) a lot of that extra is lost and that which I would keep isn't worth the change at the moment (I like living and working in this area and don't like the idea of permanently remote working, and currently have enough job/career security that I don't feel like taking a punt on something completely new right now).
Similarly, there are places where jobs like mine pay less but the cost of living is lower - I know people with more money in their pocket at the end of the month than me because of this.
It's not just hiring. It's also market. After the 3rd photo sharing app, or the 3rd chat app, or the 5th Angry-Birds look-alike, noone really cares. Too many options, too many products, and consumers can't adopt them all.
insightful extrapolation of the previous year
Or a lot of startups are going to shutdown this year.
You'll make a good or great income, you will be making your customers happy and delivering value, and no one is going to be pissed because there's no one aborting your product.