One of the central problems with the speed of tech innovation is that increasingly the question is not “Can we do something?” but “Should we do something?”. Since the important questions for teams are not directly about technical ability but how to interface with world, the world is really only the proving ground. Hence the drive for talent acquisitions where a start-up is not acquired for the product but the product has proved that the team can deliver in the real world.
Pure talent acquisitions were the product is officially ended pose a further problem to the general culture of innovation: jaded users. Maciej Ceglowski highlighted the problem in a post in December. Few people want to spend a large amount of time working on somebody else’s glorified senior project. At the same time there are so many hypotheses to work out when starting a new company that start-ups should have the ability to work on a product first before firming up the financial development of a company. However, if a large group of early adopters took his advice to heart, product first development might disappear. If users start to become more like investors digging in to business models and sustainability before trying or committing to new products then minimum viable products(MVPs) become minimum viable companies(MVCs).
MVCs reverse many of the trends in the tech world. Want to develop a business model that requires virality? Make sure you’ve already lined up the monetization plan before raising your viral coefficient. Understand that the best laid plans will always change once you actually talk with customer? Make sure you line up pricing along with those features that people actually want.
But more importantly, MVCs also hit at the key reason for talent acquisitions in the first place: a large established firm can offer the product team more than working as a start-up can. If the company needs to establish a long runway or profitability before launching then how much more would talent acquisitions cost? And if a team had to put in a lot more leg work to make sure the business case and not just the product case would they be so ready to leave in first place?
Maceij argues this wouldn’t be a bad thing. Why not make sure that a product is sustainable before people become devoted to it? But for many people the allure of making the next big thing is as irresistible as the freedom of being your boss. Aiming for the top sometimes doesn’t come with a built in business model.
Can anything be done to keep MVPs? Acquiring firms can do quite a bit of work to help keep the model open. Regardless of how much of an MVP the acquirer may incorporate into other products, acquiring companies should provide a long term plan, six months to year, for product not push for an immediate shutdown. If the acquirer really has no use for the code base then there should be no harm in selling it to another willing party to figure out how to wring some pennies from the product or just making it open source.
Early adopters can also help themselves. While a complete Angel List or Crunchbase search shouldn’t be necessary, early adopters should probably investigate a couple of products in the same space. Even if the best in breed always gets acquired at least you know where to look when it gets shut down.