Save the Entrepreneur: Big Business Keeps Buying Startups, And Killing 'Em - Tony Greenberg - MediaBizBloggers

Welcome Tony Greenberg our newest MediaBizBloggerquotThe entrepreneur always searches for change responds to it and exploits it as an opportunityquot Peter DruckerEvery week it seems like we see more stories of big companies paying big bucks to scoop up little firms with interesting technologies And then the big companies kill in one fashion or another what they just bought seemingly squandering whatever initially made the acquisition so attractiveWhat39s this all about How is it that big companies can39t help killing the things they love An injection of entrepreneurial spirit is just what most companies say they want to drive innovation to stay ahead of the market and truthfully to improve their hipness quotientBut the only spirit that most big companies seem to appreciate is that of Hannibal Lecter When it comes to entrepreneurs and acquisitions big business is all about eating companies and murdering dreams Can we please just stop the slaughterquotEntrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantagequot Victor KiamThe most notorious example of killing a golden goose Easy the AOL Time Warner merger which finally unwound itself last year after destroying something like 150 billion in shareholder value Of course figuring out who killed whom in that epic mess is a little complex so we39ll call it a murdersuicide pact But there are plenty of other examplesNews Corp bought MySpace for 580 million while Chris and Tom became friends with 100 million people But MySpace couldn39t fend off Facebook and Twitter in the hearts and status updates of the world and News Corp already has replaced Chris and Tom39s replacements in a desperate search for relevanceAnd then there was eBay39s acquisition of Skype for what ultimately became 31 billion Within a couple of years eBay had already written off about half the purchase and then got into a legal fight with Skype39s founders because it had only bought a license for Skype39s technology not the tech itself Oh and the eBay CEO during that original deal Meg Whitman is now running for California governor Her qualifications for office her business skills Like California needs that kind of helpquotThe secret of business is to know something that nobody else knowsquot Aristotle OnassisSometimes of course companies aren39t buying a business they39re buying some tech or a team That39s the presumption behind Apple39s purchase of Lala the nifty streaming music company it bought last year and is shutting down Apple of course isn39t talking Similarly Google scooped up and shut down Bumptop an equally nifty 3D desktop interfaceAt least with Apple and Google you have two endlessly innovative companies acquiring tech and talent that are likely to reemerge later with interesting productsAnd for so many entrepreneurs getting bought out is the exit strategy Work your butt off sell big pop some champagne pack up the office and go figure out your next big ideaBut the list of failed acquisitions in so many other sectors is so dismayingly long that it39s a wonder any halfway sentient CEO ever dares do a deal And yet dare they do to the destruction of so much that could be cool and greatquotEntrepreneurs are risk takers willing to roll the dice with their money or reputation on the line in support of an idea or enterprise They willingly assume responsibility for the success or failure of a venture and are answerable for all its facets The buck not only stops at their desks it starts there tooquot Victor KiamGiven that track record it39s interesting to ponder if there might be a better way that feeds a big company39s need for talent acquisition revenue growth and product innovation while preserving an entrepreneur39s ideas and spiritFortune magazine just ran an excerpt from a new book about the rise of Facebook written by David Kirkpatrick In it Kirkpatrick talks about the constant efforts by company after company to buy or control Facebook beginning just four months after it launched and continuing to Microsoft39s 15 billion offerThrough it all founder Mark Zuckerberg stubbornly kept control of his company taking as little investment capital as he could to keep growing Facebook Facebook is now closing in on 500 million users its books in the black and Zuckerberg still in control Microsoft meanwhile took a tiny stake and signed a big advertising deal that valued Facebook at yes 15 billionWill Poole has been on both sides of the equation cofounding early ecommerce company eShop which Microsoft bought He then spent 12 years as a senior Microsoft executive before leaving in 2008quotAs an entrepreneur who39s staring into the gullet of a big acquirer be sure you really know why you39re being gobbled upquot Poole says Is it quotfor your business your team or your intellectual property If it39s for the business plan to move on after a wellcrafted transition process If it39s for your team be sure you focus on how to lead and grow your team from inside a big new beast becoming an 39intrapreneur39 And if it39s for your IP buy your beach house and plan your next startupquotquotNo one can possibly achieve any real and lasting success or get rich in business by being a conformistquot J Paul GettySomething needs to be done for big companies too The New York Times39 David Pogue for instance details the quottragicallyquot bad implementation of the first product from Sony39s first nonJapanese productdevelopment unitThe Japanese giant set up a quotskunkworksquot design unit here in California with a bunch of young execs The idea was to create a more entrepreneurial mindset and get beyond the committeedriven kludgery that has characterized most recent Sony quotinnovationquot Unfortunately Pogue writes the Dash mostly dashes hopes that Sony will ever reclaim the mantle as home for gamechanging products It39s time for Sony to head back to the drawing boardSo why can39t big companies figure out how to do small Why do they have to buy and kill entrepreneurial companies either outright or by hamhanded inattentionquotInnovation is the specific tool of entrepreneurs the means by which they exploit change as an opportunity for a different business or a different servicequot Peter DruckerI think the problem is one of organizational DNA reflecting the personal DNA of the folks who run or create companies A decade ago I was involved in a company called Work Revolution that helped organizations figure out what kind of employees they had and how best to use those people in the organizationSo without getting too detailed our software classified several psychographic personality types There were Conceptuals Linears Maintainers and Adopters among others And we always taught our clients to keep the Innovators away from the RefinersquotThe entrepreneur is essentially a visualizer and an actualizer He can visualize something and when he visualizes it he sees exactly how to make it happenquot James L HayesWhy Because one personality type was about bold strokes and obsessive drive the other about tweaking and fiddling with and perfecting something that already was largely in place One was about the Will to Create The other was about the Need to SustainSo it is with companies Entrepreneurs create companies like themselves They have the heedless courage and vision to will an idea into reality and to build a business around itBut then many of them sell their creations to companies that have a very different genotype Sooner or later having sold their creations the entrepreneurs will leave the big company frustrated they can39t keep growing their creation into something cool without some schmuck in corporate strat planning or finance or legal screwing it upThis pattern happens so often that I39ve taken to calling big companies merdepreneurs because every time they buy an entrepreneurial company they turn it into shitquotThe problem with the French is they don39t have a word for 39entrepreneur39quot George W BushSo what39s the solution Maybe Zuckerberg stumbled into it with his response to Microsoft and all his other suitors He let Microsoft buy a tiny stake and create a business relationship which generated more money to keep the doors open but he also kept himself in charge growing his creation into something specialRespect the entrepreneur Leave 39em alone Let 39em build something that makes the world better instead of throwing money at 39em just long enough to kill their baby Maybe that39s the way big companies can avoid creating just another big pile of merdequotEntrepreneurs and their small enterprises are responsible for almost all the economic growth in the United Statesquot Ronald ReaganTony Greenberg is the chairman of RampRate an IT Sourcing Advisory purchasing billions in cloud services data centers telecom and IT Outsourcing for firms like Microsoft Sony Newscorp Hearst and dozens of emerging startups making matches between firms that need some really cold space massive computing power and near infinite bandwidth and companies that can do so reliably cheaply and effectively Tony can be reached at tonygreenbergrampratecomRead all Tony39s MediaBizBloggers commentaries at Only Time Buys Trust MediaBizBloggersCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBlogger

Click to Make Your 2025 Contribution to Support the MediaVillage Education Foundation

Save the Entrepreneur: Big Business Keeps Buying Startups, And Killing 'Em - Tony Greenberg - MediaBizBloggers

Author

Publish date

Channel

Tony Greenberg

"About That with Carl Mayer:" Alaina Donnellon (Episode 6) - By Carl Mayer

More Videos:

Click to Make Your 2025 Contribution to Support the MediaVillage Education Foundation

Save the Entrepreneur: Big Business Keeps Buying Startups, And Killing 'Em - Tony Greenberg - MediaBizBloggers

Enjoying This Commentary? There's More to Love

Tony Greenberg

"About That with Carl Mayer:" Alaina Donnellon (Episode 6) - By Carl Mayer

The payment was successful

Cookies