Dare Obansanjo wrote a compelling post recently in regard to flipping a start-up company. Aside from the fact that building a start-up just to flip it may be difficult as mentioned in these posts by Paul Kedrosky and Jason Wood it appears to be the Web 2.0 trend these days. Dare highlighted three things that are necessary when planning to sell a start-up to the big four, AMYG (or AOL, Microsoft, Yahoo and Google). These three factors are as follows:
1.) Technology
2.) Users
3.) Human Resources (a.k.a. a super development team)
I agree with Dare that all three separately could add value to a Google or Yahoo. However, I feel Dare discounted having a user base 0r brand awareness. I feel that a brand coupled with excellent technology has value. Let's take Flickr who was purchased by Yahoo this year as a example. Flickr had a brand that people knew and liked for photo sharing thus had value not only in the technology but also in the brand. In fact, I have read many blog posts expressing displeasure at the changes Yahoo had made or will make to Flickr which shows me that Flickr as an online photo application has a loyal following. Could Yahoo put out something similar to Flickr on its own and gain such a following?
Dare also highlighted the trend of buying companies for the people that work for the company. For example, Flickr and del.icio.us in Dare's mind were bought by Yahoo to recruit the developers that created them. Is this true? I think it is and the human resource aspect is important. However, is a Google or a Yahoo going to pay $1o0 or $200 million dollars for a few developers?
I truly believe that while technology and brand are both important. I think that a balance of all three factors is necessary to help flip your start-up to the big four:
"The strength of any company is in your people and the way that they leverage technology and not just the technology itself."
You can use people to build technology solutions and you can use technology to grow a user base and brand loyalty but it takes a lot more to develop good solid people that know how to leverage technology to create solid products. So maybe Dare is right in that people are the most valuable of the start-up flipping factors. What do you think?
