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Exit Strategies?

By deans ~ October 20th, 2009. Filed under: Observations, Random Thoughts.

I was a management consultant during the run-up to the dot-com bust.  Most of my clients were small technology companies trying to make sense of a chaotic and rapidly changing world.  I distinctly remember multiple conversations with executives and investors regarding corporate strategies that went something like this,

  • Spend a bunch of VC money
  • Get a bunch of attention (remember eyeballs?).  It doesn’t really matter if we build anything useful
  • Exit Rich! (some variation on IPO, or sell to someone greedy…)

Of course, this thinking was completely based on the “greater fool” rationale for business decisions.  Personally, I blame MS and their Hotmail acquisition.  If I had a dollar for every time that I heard someone say, “Microsoft paid $50 per subscriber for Hotmail, so we’ll be worth at least $100M!” I would be developing iPhone apps just for fun right now.

Anyway, as a humble Objective-C coder, I don’t think so much about exit strategies anymore.  However, Justin Williams recently made an announcement that, in a way, reminded me of the old days.  It seems that Mr. Williams has found that he no longer enjoys…

building software for the iPhone because of the bureaucracy and infrastructure that surrounds it. I can build great software for the Mac without the headaches and bullshit of dealing directly with Cupertino and their AppStore.

While it’s certainly too bad that Mr. Williams is thowing in the towel, I’m completely intrigued by his exit strategy.  Apparently, someone else is so enthralled by the pot of gold available in the App Store, that they’ve purchased his apps:

I’m pleased to announce that BitBQ, also known as the corporate entity in front of Mr. Patrick Burleson (@pbur), has acquired both FitnessTrack and Emergency Information from my company Second Gear.

I don’t know Mr. Burleson.  Perhaps he has the Midas touch, but I can’t help thinking about the lessons learned from technology acquisitions during the silly period of 1997-2001.  I wish both Mr. Burleson and Mr. Williams the best of luck, although I suspect that Mr. Williams got the better end of the deal.


History note for those too lucky to remember: MS was reported to have paid roughly US$400M for Hotmail, which had around 8.5M users at the time of the acquisition.  (Source: Wikipedia).


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