Some Investors May Request Protection From Acqui-Hires. Inside baseball warning, but I like writing about the things being discussed that the press never really picks up on. Acqui-hires, if you aren’t aware, are the acquisitions of startups by large companies (usually Facebook, Google and Twitter) that are made primarily for the teams, not the products. Every few weeks there’s a press report of an acquisition of some startup or another along with a rumored acquisition price that’s quite low, sometimes less than the amount of venture capital invested in the company.
Those deals usually, but not always, have equity grants to key founders and employees that are often a multiple of the acquision price. Example – a recent deal had a rumored acquisition price of around $2 million plus stock grants to a few key employees of $15 million. I’ve been fascinated with acqui-hires for years now.
The first one in recent history I know about was Parakey, acquired by Facebook in 2007 (I talked about that deal here). Other VCs aren’t as thrilled. Like this: Sparrow takes flight: how a startup built the Gmail app Google couldn’t. 126inShare Jump To Close On Rue Reaumur in Paris, France, 27 year old Dominique Leca leads a small team of engineers and one designer on a quest to build a better mail app for iPhone. A few mail clients exist (like eMailGanizer, which is ugly enough to dissuade you from using it, or Gmail, which is essentially a web app), but so far there’s been nothing to pull users away from the iPhone’s Mail app.
Leca's language is user interface design, and he communicates through software that seems inherently more comprehensible than what you've used before. This is the story of Sparrow. Sticky TOC engaged! Getting off the ground Getting off the ground "It's tough to be an entrepreneur in France," Leca said to me in an ironically thick French accent. Leca sounds bored as he relives the dark ages before he let his creativity guide him. After he finished school, Leca found himself building apps for big companies — an unfulfilling mission for an imaginative mind. Leca wanted in. Building Sparrow for Mac. Ce que nous apprend le succès de Sparrow. J’ai rencontré Hoa, un des deux cofondateurs de Sparrow, en juin 2010. Il sortait d’une mauvaise expérience en agence mobile. A l’époque je cherchais un expert en développement iOS pour un projet chez France24.
Nous avions pris un verre dans un bar du coté de Bonne Nouvelle. J’étais sorti du rendez-vous plutôt étonné par le bonhomme : sibyllin, peu enclin à la conversation et surtout obnubilé par son projet qui m’a paru fou à l’époque puisqu’il s’agissait de créer un nouveau client mail… En effet, ce jour là, Hoa m’a expliqué qu’il travaillait sur un lecteur d’e-mail open-source et simplifié sous Linux. A l’époque, je me souviens lui avoir fait part de mon étonnement : pourquoi se lancer sur un projet de client mail alors que le concept avait déjà donné lieu à des centaines voire des milliers d’exécutions ? Bref l’idée me paraissait inutile et vouée à l’échec. Quelle fut mon erreur ! Deux ans plus tard, on ne peut qu’être admiratif de l’évolution de cette idée. More on Sparrow and talent acquisitions.
My talent-acquisition post yesterday got a lot of attention and some great responses, mostly about Sparrow specifically. I ended the article with this: If you want to keep the software and services around that you enjoy, do what you can to make their businesses successful enough that it’s more attractive to keep running them than to be hired by a big tech company. From Rian van der Merwe’s response: But… that’s what I did. I paid full price for every version of the Sparrow app I could find. I told everyone who would listen to buy it. I should have gone a bit more into this, but I had to run out and buy plants (in my exciting life as a homeowner) and decided to keep the article short and simple. In the reality of our fast-paced, boom-and-bust industry, even very strong support from customers may not be enough for many companies to stay in business. They might not take your money. They might not take enough of your money.
There might just not be enough customers. Don’t blame Sparrow. Entitlement and Acquisition. Sparrow (a popular Mac and iOS email client) has been acquired by Google. The apps are essentially being put in maintenance mode, with no additional features planned for the future. Cue predictable squawking on the internet. The same thing happens every time there’s an acquisition of a smaller, indie dev company or product by a larger company. People try to dress their reaction up as a principled stance or a community cause, but that’s at best wrong-headed thinking, and at worst wilfully egocentric bullshit.
Here are some of the usual batch of responses. I invested in this product! You paid $10 for the Mac version, or $3 for the iOS version. I chose to support development! Thanks for that $10. I bought on the promise of future updates! Sparrow’s guys apparently promised some future features like push notifications. Sparrow’s guys publicly promised a future thing. Supporting customers is a matter of honour! Cole wants you to keep developing the app he bought forever. I feel betrayed! YESTERDAY! Kima Ventures’ Jeremie Berrebi says no journalists wrote true Sparrow story. As just about everyone probably knows by now, Google announced its first France-based acquisition on Friday: Sparrow.
I say “announced” because according to a few sources, Google has previously acquired France-based companies but chosen not to communicate. Anyhow, regardless of what the situation is, the Sparrow team is packing their bags and heading to Mountain View to join the Gmail team in what looks more like a talent-acquisition (another rare occurrence for France). Naturally, the fact that some of France’s top talent is packing up and heading to the US has made quite a few journalists question whether or not this acquisition should be considered as “great” news for France. A comment published on TechCrunch also reveals that Sparrow will not be releasing any new features for its darling mail app.
Sad, but true. Kima Ventures’ Jeremie Berrebi published a tweet and a Facebook status update this morning revealing that journalists had in fact missed the truth of the acquisition.
Sparrow — Get mail done. Unhappy. Happy.