Comments on: Assessing Competition Risk for Digital Media Startups http://blog.bootuplabs.com/2009/09/30/asessing-competition-risk-for-digital-media-startups/ Taking Founders from Concept to Company Thu, 15 Jul 2010 22:11:34 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Ian Andrew Bell http://blog.bootuplabs.com/2009/09/30/asessing-competition-risk-for-digital-media-startups/comment-page-1/#comment-5206 Ian Andrew Bell Fri, 06 Nov 2009 01:25:10 +0000 http://blog.bootuplabs.com/?p=398#comment-5206 The reality is that as these companies grow larger they become more, not less, risk averse. It is oftentimes less risky to watch a market develop, let the customer base pick the winner, and then buy out that winner. This is a strategy which Cisco, which according to Brent Holliday has lots of cash in the bank, has openly embraced. Cisco has realized it's hard to innovate from within and calls itself a Fast Follower. Elephants can't dance. The reality is that as these companies grow larger they become more, not less, risk averse. It is oftentimes less risky to watch a market develop, let the customer base pick the winner, and then buy out that winner. This is a strategy which Cisco, which according to Brent Holliday has lots of cash in the bank, has openly embraced.

Cisco has realized it's hard to innovate from within and calls itself a Fast Follower. Elephants can't dance.

]]> By: gs-tech-law http://blog.bootuplabs.com/2009/09/30/asessing-competition-risk-for-digital-media-startups/comment-page-1/#comment-4845 gs-tech-law Fri, 02 Oct 2009 01:44:18 +0000 http://blog.bootuplabs.com/?p=398#comment-4845 I fully agree with your analysis Danny. I have acted (as a lawyer) on behalf of NewCos who have been bought by BigCos and it is fascinating to see that even on the negotiation level the business decision process of a NewCo is sometimes more efficient in adapting to changing circumstances as the deal evolves (as almost all deals have ups and downs). I think that there are some other entrepreneur myths which need to be addressed. I fully agree with your analysis Danny. I have acted (as a lawyer) on behalf of NewCos who have been bought by BigCos and it is fascinating to see that even on the negotiation level the business decision process of a NewCo is sometimes more efficient in adapting to changing circumstances as the deal evolves (as almost all deals have ups and downs). I think that there are some other entrepreneur myths which need to be addressed.

]]> By: Technology news - Techvibes Blog http://blog.bootuplabs.com/2009/09/30/asessing-competition-risk-for-digital-media-startups/comment-page-1/#comment-4844 Technology news - Techvibes Blog Fri, 02 Oct 2009 00:30:31 +0000 http://blog.bootuplabs.com/?p=398#comment-4844 [...] Danny Robinson is a Guest Contributor and this post was published on Bootup Labs' blog yesterday. [...] [...] Danny Robinson is a Guest Contributor and this post was published on Bootup Labs’ blog yesterday. [...]

]]> By: DannyRobinson http://blog.bootuplabs.com/2009/09/30/asessing-competition-risk-for-digital-media-startups/comment-page-1/#comment-4842 DannyRobinson Thu, 01 Oct 2009 17:58:10 +0000 http://blog.bootuplabs.com/?p=398#comment-4842 You've defined the art of M&A -- Buy them early enough where they still have enough uncertainty that the price is low, but they've proven their business. Not surprisingly, The BOD's appetite for being acquired is inversely proportional to how well the company is doing (revenue or user growth), which is proportional to the amount of interested acquirers. This forces prices up a very fast rate. I call that the "updraft." As entrepreneurs, we like to get caught in the updraft. You've defined the art of M&A — Buy them early enough where they still have enough uncertainty that the price is low, but they've proven their business. Not surprisingly, The BOD's appetite for being acquired is inversely proportional to how well the company is doing (revenue or user growth), which is proportional to the amount of interested acquirers. This forces prices up a very fast rate. I call that the "updraft." As entrepreneurs, we like to get caught in the updraft.

]]> By: @adammcnamara http://blog.bootuplabs.com/2009/09/30/asessing-competition-risk-for-digital-media-startups/comment-page-1/#comment-4835 @adammcnamara Thu, 01 Oct 2009 08:08:05 +0000 http://blog.bootuplabs.com/?p=398#comment-4835 Fantastic blog post (for the third time this week). Thoughts on why large companies aren't cherry picking promising smaller startups earlier in the pipeline? Zappos didn't reach $800M overnight. Do they appear on the big guy's radar too late, or are the big guys looking for irrefutable market validation before an acquisition and by that time its too late? Adam <a href="http://selectstartstudios.com" target="_blank">http://selectstartstudios.com</a> <a href="http://appnotify.com" target="_blank">http://appnotify.com</a> Fantastic blog post (for the third time this week).

Thoughts on why large companies aren't cherry picking promising smaller startups earlier in the pipeline? Zappos didn't reach $800M overnight. Do they appear on the big guy's radar too late, or are the big guys looking for irrefutable market validation before an acquisition and by that time its too late?

Adam
http://selectstartstudios.com
http://appnotify.com

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