Meme Schemes, Attention Seekers and M&A Flies in the Ointment

 

I have a love/hate opinion of the theater of the absurd that propagates across the “look at me” blogosphere. 

First, a mea culpa.  I am 100% guilty of suffering a case of pot calling the kettle black, so take my comments with some measure of humility and self-awareness.  

That said, I roll my eyes every time I read attention-seekers like Jason Calcanis quit blogging, announce same in a blog post, and then when no one cares, start blogging again as quickly as they see a story wave to ride/exploit. 

Stay or leave, Jason, I don’t care, but just don’t package up your self-promotion “look at me” moments as anything other than a cry for attention.

Similarly, it’s funny to see folks like Jason Fried of 37Signals get a soap box to stand upon (well earned, to be clear - by virtue of cultivating a conversation around good design; eating their own dog food with decent, if uninspiring, products; and driving Ruby on Rails innovation), and then acting like they own the joint (the joint being the Web Economy), arrogantly judging and dismissing the accomplishments of others, since, after all, Jason has found the one 'right' way to be a true entrepreneur. 

Fried first disses the founder of Mint.com (in a post derisively called ‘The next generation bends over’) for taking the money from Intuit, espousing upon the acquisition as “indicative of VC-induced 'cancer' that’s infecting our industry and killing off the next generation.”

Yeah, if cancer involves the entrepreneurial team high-fiving one another gleefully on being set for life, coupled with the gorilla of personal finance kissing your ring finger, let’s hope that 'disease' spreads. 

No less, anyone who knows the first thing about VCs, knows that these guys (VCs) will almost always encourage you to double down versus taking well-earned gains off the table, so Fried's core point is WAY off-base.

(Sinking deeper into “look at me” self-promotion, yet a week later Fried will mock Twitter’s recent $1B valuation in another link-baiting post).

Now, a full two weeks after Fried’s post on the Mint.com-Intuit deal, Dave McClure writes an over the top, expletive-filled “right back atcha” post that seems at least half purposed in making sure that everyone knows that Dave is an angel investor in Mint.com. 

In other words, nobody showboats about a company that I'm involved with without me getting MY whack at the Piñata first.  "Look at me!"

The irony is that McClure’s post is strangely coherent, well-argued and has a really solid thesis that is worth ruminating on before dismissing what can only be called Cirque du Blogosphere, in terms of unabashed theatricality:

1. The trend towards more and more innovation-challenged companies (Exhibit A: Intuit) turning to M&A to enhance their DNA and product pipeline as the Web matures is a long-term one;
   
2. Owing to this same maturity, more entrepreneurs can build a real business on less dollars than in days of old, obviating the need for mega VCs (in many cases), thereby creating an opportunity for savvy angels and micro-fund VCs;
   
3. More transactions are good for Startups Ecosystem (arguably, since small is easier to integrate than big, diversity is innovation, and there is a risk-reward balance for entrepreneurs, investors and acquirers alike).
   

There is, however, one fly in the ointment.  

Namely, that most acquiring companies do a really poor job on the post-acquisition ‘integration' part of M&A.

In other words, they know how to court startups.  They know how to paper a transaction.  

But most are fairly clueless about how to ensure that the core 2-3 'keepers' in terms of technical, product, marketing and/or sales human capital hang around in a long-term, deeply-engaged fashion. 

And, the silo'd nature of larger companies often guarantees that the outcome manifests in a 1+1<2 fashion in terms of whatever differentiation, magic, consumer engagement or product innovation culture they acquired being leeched out within six months of the deal closing.

Netting it Out: If the trend of big fish eating little fish is to be a long-term thing, and I think that it is, then acquiring companies have to get a lot more rigorous about the post M&A integration piece of their M&A strategy.

Did I forget to mention my experience in this domain?  "Look at me," "look at me," "look at me!" ;-)

Related Posts:

1. Twitter Financing: Pruning the Garden with $100M Shears 
   
2. Anatomy of a Post: Breadcrumbs, Tweets and Call Home Functions 
3. Googling Innovation: Seed, Select and Amplify 

Comments

[Jason Fried]

Hey Mark.

For the record, I've never believed my way is the only way. Quite the contrary. In fact, the beginning of our very opinionated book Getting Real leads with that caveat. And if you see me speak I'll often say something like "These ideas aren't for everyone. There are plenty of ways to do the same thing. Take whatever you find useful and leave the rest behind"

That said, I don't couch every opinion or everything I write with "it depends" or "this doesn't always apply" or "in some cases". I assume my audience is smart enough to understand that nothing is black and white. Everything is variable. Every situation has its exceptions, alternatives, and options.

I just believe opinions are best when they are strong opinions. I love pure, raw, untainted opinions. I find those the most interesting and insightful. I really want to know what someone thinks. I like undisturbed thoughts and strong stands.

But that's just how I see it, you may see it differently.

[Mark Sigal]

Hi Jason,

First off, thanks for taking the time to make a thoughtful response.

Perception is reality, and it certainly seemed that you were sour graping a bit relative to your approach to building a business, but I can appreciate trying to provide a pure, raw and un sugar-coated perspective, especially as laced with a bit of tongue in cheekism (as was clear case in Twitter PR).

So much better than the same vanilla storyline retold over and over again, so 100% on same page there.

As noted this is a topic with plenty of stone throwers and even more glass houses, so definitely not coming from on high on this one. :-)

Cheers,

Mark

[Jason Fried]

I'm glad we both understand each other a bit better than we did before ;)

Another for the record: The fake PR wasn't about Twitter. It's been interesting seeing lots of people think it was though. I think that reveals a lot in itself.

Twitter's valuation is just the latest example of the massive-valuation-by-investment-but-no-profits scenario were were lampooning, but the timing was coincidental. We've spoken out about this before - way back before Twitter was even around. This isn't a new issue, it's an old issue repeating itself.

We'd been working on that press release for well over a week (maybe two) before we posted it. The day we posted it was when we finished it. It just happened to be on the day Twitter announced their new funding.

Anyway, thanks again for writing and for taking my comment above into consideration. I hope we can shake hands in person some day.

-Jason

[Mark Sigal]

I am a fan of discourse. Too much unilateral, "you-suckism" on the web, which doesn't exactly reward nuance, iteration and divergent opinions that make for good community.

Re the Twitter PR thinking, I am sure that you can appreciate that timing is everything. The same release a week earlier, looks prescient, a week later is fish wrapping paper, day of is guilt by association; guilt being the wrong word for my point, but nothing more neutral coming to mind.

Let's definitely connect up one of these days.

Best,

Mark

[Dave]

hey mark -

nice writeup. i agree, the one comment i made in my post that probably isn't on target is when i said "it's very easy to integrate a web-based acquisition". i was mainly talking about the technical aspects of integration, but you're correct the more challenging aspects of integration are more likely the non-technical ones. having gone thru both eBay's acquisition of PayPal, as well as my own small company acquisition back in the mid-90's, i can attest to the mgmt & politics hassles of acquisitions being the critical issue.

that said, i do believe there may be strategic advantages to large platform companies improving their acquisition integration process, and using that as a strategic advantage.

finally, re: the attention-seeking stuff... are you kidding? me? attention? can't stand the stuff ;)

- dave "media whore" mcclure

[Mark Sigal]

Hey Dave,

I appreciate your lack of taking yourself overly seriously while at the same time being strident - and clear - in your perspective.

The integration stuff is a big deal in that the one buzz kill on all sides of the discussion (customers, investors, startup, acquirer) is for smart people to work hard, build something that they are passionate about, only to see it either end up in the unsupported bin or genericized to the point of mediocrity.

It just feels like one of those problems that, while not completely 'fixable,' can materially be improved with a little better planning.

Have a good one,

Mark

[Adam Jackson]

Hi Mark,

Couldn't agree more about the difficulty of integrating a small web-based company into a giant like Intuit. My last company (hehe, Me Me Me!) was sold to Intuit in 2006 and the transition was rocky and scared away much of the talent. Aaron will no doubt be dealing with this imminently.

Regarding the subject of your post - you're absolutely right - but it certainly seems to work well for both Jasons' product and Dave's deal flow. I could learn a thing or two .. ;)

Best
Adam

[Mark Sigal]

Adam, thanks for the direct perspective on Intuit. I had a near M&A path with them that got gummed up in a vortex of "which group" pertaining to "which mission" following "which re-org," so I am a bit biased specific to Intuit, although your experience is consistent with what I felt was going on behind the scenes.

I hear you on the line between promoting one's ideas and media whoring (stealing dave mcclure self-tagged moniker). As much art as science.

Have a wonderful evening.

Mark