Coasters

August 18, 2017

Ran across this article the other day.

"Inside the world of Silicon Valley's 'coasters' — the millionaire engineers who get paid gobs of money and barely work"

What I found myself thinking about after reading it was an experience I had at a company where they had setup a similar situation after buying a startup. But, in this case the situation was different in an important way. The company put the startup people in charge of their own group and told them to run it. The acquiring company didn't put one of their own in charge. They just assumed the startup would work within the larger company without any strong tie back into the buyer.

This in hindsight turned out to be a mistake. At some point the situation between the startup people and the larger company soured and the startup people stopped participating. Without any strong leadership on the buying side and no leadership chain back into the buyer the startup people appeared to drive their business into the ground. It was a bit sad in some sense because after the initial acquisition a number of new people had been brought in. These new hires, officially employees of the buying company, had no idea the situation the startup folks had with the buyer. Over time, of course, they learned as things disintegrated.

If does seem common that larger companies fail often at integrating smaller companies they purchase. But, I can say that from this experience I would recommend that buying companies put their own loyal management in place quickly and move the original startup people out of the way as soon as possible. The incentives for everyone need to be in line. The buyer needs to incentivize their own to make the startup's technology part of the bigger whole while they leave the startup people to wait and vest and not get in the way.


Tags: opinion