Won't you just get acquired?

I admit that I have a weakness in that I check what people are saying about Aggregate Knowledge on Technorati on a fairly regular basis. Usually things are pretty quiet since most our customers are large media or retail companies that don't really blog about their experiences with us, but we do get spikes when we do conferences like SuperNova. We participated in the Connected Innovators session with 12 other companies (one of them fake). Here's a round up by Rafe Needleman and another by Sean Ammirati.

This is my long winded way of getting to a post by Jennifer Woodard Maderazo about the conference. In general her tone is pretty negative and she seems skeptical in general of what's going on. Who can blame her? The Web 2.0 hype machine has been going full blast for two years now. I can't say I disagree a lot with some of her observations.

The piece of her post that I do want to pick on though is a refrain that I have heard from not only her but from many VCs and other industry pundits.  You're a feature not a company. You're just going to get acquired. Here's a couple of paragraphs from her post:

The panel, which included Josh Kopelman of First Round Capital, entrepreneur Julie Hanna Farris, and entrepreneur and blogger Paul Kedrosky seemed to agree with my take, saying that the applications presented were “FNAC” — “features not a company” — likely to fall short of transforming the way people do things and destined to be “merely acquired” by some giant like Google.

I can’t help but think that most of the entrepreneurs in the room would be fine with that. The mass acquisitions of late seem to be fomenting not creativity but a drive to create what’s most likely to get bought.

When you're an entrepreneur you get this a lot from people. In fact, assuming that your idea passes the sniff test of having a decent market  and being executable, the most likely criticism you'll get is that you're just a feature and that you'll get acquired.

Most of the time this criticism is right.

Most companies fail, some few get bought and a very very few will make it and become great companies that transform the way people do things.

The problem with using that generalization comes when you're evaluating individual companies - you'll always miss the great ones if you assume if you apply too tight a filter.

There definitely were companies on that SuperNova stage that are aspiring to change the way that people do things. Companies that won't necessarily be thrilled to get bought. Not all of them will make it but I do salute all the other entrepreneurs for taking a shot at it. Most will fail, some few will get bought and maybe one or two of us will go on to really change the world.

One last thought - I think that all the companies up on stage were less than two years old. Would anyone have predicted that Google would be where it is now back in 1999 when they were a two year old? Weren't they just a feature that would be acquired?

Comments

[Jennifer Woodard Maderazo]

Hi Chris,

Thanks for the post. I don't want to come off as dismissive of the companies that presented at Supernova. I have great respect for all of you for having the smarts and the drive to do what you do. It's just that I follow a lot of startups (out of a love for the innovation of this movement) and after a while some of the companies start looking like each other. When people talk about this being a bubbly moment, it's because there is so much happening and much of it is redundant. In a perfect world, great ideas would spawn great DIFFERENT ideas.

To be fair, a 5-minute pitching session doesn't give us a deep look into these companies and there is no way to judge their viability based on that. For the record, Aggregate Knowledge was one of the ideas I thought had the most potential (mainly because of who you are targeting), and the point you make about Google is valid. We really never know what's going to be big and what's going to change the way we do things. It could be that idea that knocked my socks off, or it could be the one I ignored (like MySpace).

[claw]

Hi Jennifer,

I don't mean to single you out. Your reaction is quite natural and I've heard it while at many different companies from many others.

To riff on this idea a little more - I wonder if all software companies start out looking like features and as acquisition bait. Is it possible for a company less than a year or two old to look any different?

Appreciate the comment!