Going Backward

I have an acquaintance who has a little life-cycle model of firms he enjoys:

  • Knowledge: Ideas
  • Action: Realization
  • Relationships: Market Tuning, Discovery, Creation
  • Process: Efficiency, Tuning, Scaling-up

One of his little jokes: During the bubble it became possible to sell companies in the first phase. To be make them fungible. Start a company, have a bundle of clever ideas, and then sell that bag of goods.

Bitching over at Joel on Software brought this up. Microsoft has killed a product he uses. They acquired it’s maker. He quotes all this marketing propaganda:

The existing Lookout product will no longer be available, but its technology will be part of an exciting vision that MSN has for delivering new and innovative search services

I love that idea. You take a real product and you shift it backward into “exciting vision.” Of course there are times that is the best move for a company. Probably even times when it increases your overall valuation. Lose the customers, raise the value – weird huh?

I love the idea because I have so often seen idea lovers, people like me, advocate just that move inside an existing firm.

I wonder, did Microsoft say to the guys at the company they were acquiring. “We want to buy you and turn you into our vision.” “Turn into” we do with the compost pile at my house.

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