Why did Facebook discontinue Parse?

echojason@gmail.com'

JASON LEMKIN

Because it was just a small bet.

M&A < $500m or so for bigger companies (>$10b market cap — and FB is $500b!) … is just a bet.  Something a VP or similar wants to do, to fill a gap, close a hole.

Then they see.  How does it go next year?  Even if poorly, it almost always gets re-funded for Year 2.

Year 3 is always the real test.  Even in the biggest tech cos., headcount is fixed.  Each VP only gets X00 or X000 engineers.  Do I want to leave X engineers on acquisition Y from 2 years ago, or move them over to my core project?

If the acquisition hasn’t contributed to that VP’s core goals by the start of Year 3 … those heads (which are fixed in number) almost always get moved over to the core initiative of that VP.  Where that VP earns her bonus.  And where she gets fired if she misses the plan.

And then … really … remember, from the VP, from the stakeholder’s perspective … it’s not my money.  But it is my neck on the line.  So once I’ve moved the engineers over to the core, or out entirely … it’s easier to just shut it down, than try to sell it.  Selling it takes work.

It s***s.  It really does.

But if you sell for < $500,000,000 or so … to a Big Tech Co … realize it is just an initiative, a big or small experiment.  That will be formally judged when it’s up for its second renewal.

If you can’t live with this … don’t sell.  Or at least, do whatever you can to make it a success there after you do.

🙁

See Questions On Quora

View original question on quora

Published on February 1, 2016
Share This