What matters if you wanna flip your company

December 18, 2005 By

Have visions of flipping your company to one of the big companies and making a good paycheck? I know lots of people who do (and even have recommended a few to our M&A guys).

Dare Obasanjo writes about what matters if you wanna do that.

I’ll add to that. You’ve gotta be a bit lucky, a bit willing to put up with arrogant attitudes (and, believe it or not, I’m not just talking about Microsoft here) and you’ve gotta get over the politics and the NIH (not invented here) syndrome. How do you know you’re hitting the NIH? Because after your team leaves the big guys developers say “we could build that in 12 months.”

The thing is, internally when I hear that I get pissed. Why? Cause we rarely do. In fact, it takes us years to finish off technology we’ve already demonstrated internally.

This is why I’m getting so public about asking for the ability to acquire companies without having to deal with a committee. I know it’ll probably never happen, but a guy has to have dreams, right?

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  • Kevin: good point.

    The reality is if you had a single person doing acquisitions most of the acquisitions would fail anyway because they wouldn't get support from the rest of the company.
  • Don't do that Robert. The problem is that without a group backing you if the company ever fails you'll get blamed (and probably fired). Which would be bad.

    Same goes for Engineers. Don't invent and deploy arch without having buyin from the team. Even if you're 100% sure it's the right decision if something goes wrong (and it always does) then you're the first to get blamed.

    Just my $0.02...
  • I dare say the reality is that there are probably more startups that want to flip than companies that want to aquire them especially when the process of creating the company and product is more painful than its supposed to be-- speaking from experience here--but it is interesting to see that more and more companies are thinking "sell out" rather than IPO for the exit strategy.
  • Shel and AT: right. There indeed is plenty of arrogance inside Microsoft. That's why I said "I'm not JUST talking about Microsoft here."

    Hey, AT, I expect my readers to be careful readers. If you just want to FUD here, go somewhere else please.
  • Robert,

    You ae right on spot on ths one. have had se recent experiences that make it cear Microsoft holds no monopoly on arrogance in the acquisition process.
  • It is interesting to note that VCs invest in startups for the same reasons that the major companies acquire startups; 1)Great team of extraordinary people, 2)innovative technology, 3)growing user base, 4)a hot new market with huge growth potential. These are pretty much in rank order of importance.

    I wrote a post on the logic big companies use when deciding to acquire a startup, entitled "Microsoft Will Acquire My Company". You can find it here http://dondodge.typepad.com/the_next_big_thing/...

    Microsoft acquires, on average, more than 10 companies per year. My post above lists the major acquisitions over the years, and the recent ones this year which include; Giant Software, Sybari, Groove Networks, Frontbridge, Teleo, and FolderShare. I think MessageCast was this year too. There are probably more.

    No one should start a company with their exit strategy being acquired by one of the big players. It does happen, but it is rare and difficult.

    Don Dodge
  • AT
    Dispute you are not talking about Microsoft - NIH is clearly an issue in this company.

    Even more – once I had high level manager defend that NIH is good for Microsoft.

    He started to claim that power to change software, bug fixing, licensing costs, etc... make it valuable for Microsoft to reinvent EVERYTHING internally.

    The only reasons why Microsoft will acquire anything from you or establish partnership - are
    a) Legal Risks (Patents, Copyrights etc.). These apply in case if licensing is much cheaper than protection from possible lawsuits.
    b) Company personnel have information critical to implementation of similar functionality inside Microsoft. This can be done by total acquire or short-term (but you will be forced to believe it's long-term one) partnerships.

    For rest of business opportunities Microsoft rarely allow outsiders to make profit.
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