I will not be acquihired

There's a story I notice playing out increasingly often these days: A startup company is founded and provides a service lots of people want and use; the company is acquired by one of the tech giants (most often Google or Facebook); and a few months later the startup's founders are shuffled off to work on other projects and the service they created is shut down. In corporate-speak, this is a "talent acquisition"; in the world of internet startups, it's more often called an "acquihire".

This, quite reasonably, tends to make people nervous about using services which are provided by small startup companies. After "what if you get hit by a bus", the most common question people ask me about my online backup service is some variation on "what if Google buys Tarsnap and doesn't want to keep it running?" I've answered this privately many times, but I think it's time to answer it publicly: Tarsnap will not be acquihired.

Announcements of startup acquisitions rarely provide much in the way of back story, but reading between the lines there's two common sub-plots I see. I call these the "job hunter" story and the "failure to lift-off" story.

The job hunter story runs roughly as follows: Some smart kids graduate from college and start looking for jobs. They go around to the usual list of high profile companies — Google, Facebook, Microsoft, Amazon, etc. — but either aren't offered jobs or are offered relatively low salaries. While it's obvious to their interviewers that they are smart, they've never built anything beyond the scope of a one-term college course, and employers are naturally hesitant about hiring anyone without practical work experience.

So lacking any job offers commensurate to their talents, our job hunters set out to demonstrate that they have practical skills in addition to academic knowledge. They build a company much like an artist or architect puts together a portfolio: As a way to show off their talents. It doesn't matter if the company makes any money — that's not the point, since they're trying to demonstrate their suitability for software development jobs, not their ability to run companies. A year or so later, they get the jobs they were looking for; a large software firm gets employees with demonstrated practical skills; and the only people who aren't happy are the users who now find that the service they were using no longer exists.

The failure to lift-off story is a bit uglier. Some people have a business idea, and decide to set out on their own to create it. Usually it turns out that the market isn't quite as large as they thought; in some cases a lot of people want what they're providing, but aren't willing to pay enough to make the business very profitable. Maybe the company is approaching bankruptcy and can't convince any venture capital companies to invest any more money; maybe the company is limping along barely profitably but the founders aren't getting rich and the investors are getting impatient.

Either way, some calls are made, and the company is "acquired"; most often it seems that the only connection between the acquired and acquiring companies is that they share an investor in common. (From a fiduciary perspective, these deals stink: It seems very implausible that they would all occur if it weren't for personal relationships greasing the wheels.) This story doesn't end with anyone being very happy, but at least it's a cleaner and less embarassing wrap-up than a company going bankrupt and its founders being unemployed.

Tarsnap doesn't fit either of these stories. I started Tarsnap shortly after receiving my doctorate, so it might look like a "job hunter" story; but I only started Tarsnap after being offered a well-paid job. In fact, without that job offer, I wouldn't have started Tarsnap — it was the security of having "get a job at a big internet company" as a proven backup plan which made me willing to take the risk of starting my own company. Nor does Tarsnap fit the "failure to lift-off" story: While Tarsnap is nowhere near as large as Dropbox, AirBnb, or Heroku, it doesn't need to be. As a "bootstrapped" company, Tarsnap has no investors who could get impatient; and it's sufficiently profitable that I'd be satisfied with running it indefinitely even if it never grows any further (which is, of course, a very unlikely scenario).

In short, Tarsnap won't be acquihired because I'd have nothing to gain from it. I didn't built Tarsnap in the hopes of attracting a job offer, and it's successful enough that I'd be a fool to ever abandon it. I'm in this for the long haul; your backups are safe.

Posted at 2012-07-21 05:05 | Permanent link | Comments
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