A New Type of Exit, A New Way To Frustrate People

by Nathaniel Whittemore · 2009-12-06 08:24:00 UTC
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One of the evolutions in the tech space is that as the market for initial public offerings has tanked, more and more young entrepreneurs are aiming at acquisition by one of the big guys (e.g. Google) as their exit strategy.

On Friday, the news broke that EtherPad - a tool for editing documents together in real time - had been acquired by Google, and would be shutting down in just a few months. The whole team is now going to be working on Wave.

For Google, the acquisition was probably about talent and technology. Fred Wilson wrote a post about these new HR acquisitions today, which provides some useful background.

Interestingly, ReadWriteWeb's Marshall Kirkpatrick wrote a very frustrated post about the acquisition, calling it a "Silicon Valley Soap Opera," and a "Cynical bore." He writes that the new model is "meant only to tease users with innovation and ultimately enrich a select few Valley darlings."

There's something to his criticism: if the entrepreneurs are all lined up to be acquired by Google, it creates high incentives to innovate within the market of big players, rather than trying to bust those markets open. I'm not too worried, as there are still a whole lot of brashy, cocky entrepreneurs who think that the big guys are full of it and just waiting to be dethroned.

(Photo: Dullhunk)

Nathaniel Whittemore is the founder of Assetmap. Previously he was the founding director of the Northwestern University Center for Global Engagement.
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