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jerryking : acquihires   10

Every Company Is Now a Tech Company
Dec. 4, 2018 | WSJ | By Christopher Mims.

There was a time when the primary role of leaders at most companies was management. The technology required to do the work of a company could be bought or siloed in an “IT department,” treated more as a cost center than a source of competitive advantage.

But now we’ve entered a period of upheaval, driven by connectivity, artificial intelligence and automation. The changes affect the world of business so profoundly that every company is now a tech company. But now companies born before the first internet bubble also must realize they can no longer function as non-tech businesses......The question is, how does a non-tech company become a tech company quickly? Increasingly, the answer is bringing tech talent into the highest executive ranks, adding deeply knowledgeable and indispensable “technical co-founders” long after the company was founded......To put it another way: When faced with a competitor like Amazon, do you do as Walmart did, and invest heavily in tech firms and technical knowledge? Or do you go the way of Sears…into bankruptcy court?

In August 2016, Walmart announced it would acquire e-commerce startup Jet.com for $3.3 billion, the largest ever deal of an old-line bricks-and-mortar company buying an e-commerce company. The acquisition was about a transfusion of new minds as much as Jet’s technology, which was far ahead of Walmart’s online operation at the time....Mr. Lore is now chief of e-commerce at Walmart......Walmart’s e-commerce business revenue grew 43% in the last quarter alone....Wal-Mart is successfully pursuing a “second-mover strategy” against Amazon....Things don’t always go this smoothly. In fact, when well-established companies acquire tech-savvy startups in order to bring aboard engineers and executives--acqui-hires-- it’s usually a disaster.....Within the first three years after an acquisition, 60% of employees at a startup leave......That rate of turnover is twice that of employees hired the old-fashioned way. What’s worse, the employees who leave tend to be the most aggressive and entrepreneurial—and more likely to launch a competing startup.....For large companies stuck between the rock of disruption and the hard place of acquiring startups that can’t hold on to key employees, what’s to be done?[sounds like a cultural clash] John Chambers, who was chief executive at Cisco for more than 20 years, where he oversaw 180 acquisitions, has some answers. In his new book, “Connecting the Dots,” Mr. Chambers outlines some rules. For one, corporate cultures should align. Also, it helps if the company you’re buying already has significant traction in the market..... it’s essential to promote the leaders of acquired companies into your own ranks. Mr. Chamber’s rule at Cisco was that a third of the company’s leaders should be promoted from within, a third should be recruited from outside, and a third should come from acquisitions. .......As the competitive landscape continues to change and technology becomes ever more essential to how business is done, investments that might have seemed too risky a few years ago now may sometimes turn out to be the best path to survival.
acquihires  artificial_intelligence  automation  Amazon  books  Christopher_Mims  connecting_the_dots  CTOs  Cisco  cultural_clash  digital_savvy  e-commerce  Jet  John_Chambers  large_companies  post-deal_integration  reinvention  silo_mentality  technology  Wal-Mart 
december 2018 by jerryking
For Non-Tech Companies, if You Can’t Build It, Buy a Start-Up - The New York Times
By LESLIE PICKER JAN. 2, 2017

Last year, the number of technology companies sold to non-tech companies surpassed those acquired by tech companies for the first time since the internet era began, according to data compiled by Bloomberg. Excluding private equity buyers, 682 tech companies were purchased by a company in an industry other than technology, while 655 were acquired by tech companies....Non-tech chief executives have been found mingling at technology conferences, trying to spot their next potential target. ....One major shift as to why non-tech executives are becoming more active in tech deal making is that they have become more comfortable with the technology itself.....The next challenge for many of these companies might be in integrating their tech start-ups with the main business.

When traditional companies acquired small technology companies, they typically would place them in a “digital division” separate from the rest of the company.

That too needs to change, according to Aryeh Bourkoff, the founder and chief executive of the investment bank LionTree.

“Technology should not be a division of a company, it should be integrated into every division,” he said.
acquihires  brands  Fortune_500  GE  Honeywell  large_companies  mergers_&_acquisitions  M&A  post-deal_integration  start_ups 
january 2017 by jerryking
The Corrosive Downside of Acquihires
Mark SusterFollow
2x entrepreneur. Sold both companies (last to salesforce.com). Turned VC looking to invest in passionate entrepreneurs — I’m on Twitter at @msuster
May 13, 2013
acquihires  drawbacks 
october 2016 by jerryking
Humanity’s Last Great Hope: Venture Capitalists - WSJ - WSJ
By CHRISTOPHER MIMS
Oct. 20, 2014

as government has pulled back from spending on basic R&D, in general so too has big business. Long gone are the days when large corporate research campuses like Bell Labs came up with fundamental breakthroughs like the transistor.

This is where venture capitalists could step up—if they choose to fund the right startups.

Much of the basic research that used to be conducted within companies is now resident in startups, which technology companies gobble up at every opportunity. Acquisitions are the new R&D, and “acqui-hires” are the new staff development. Successful venture capitalism is about managing risk, so partners at most VC firms invest in businesses they think will become viable, or at least worthy of an acquisition, in the shortest time possible.
acquihires  Bell_Labs  breakthroughs  Christopher_Mims  fundamental_discoveries  hiring  innovation  mergers_&_acquisitions  risk-management  R&D  start_ups  vc  venture_capital 
october 2014 by jerryking

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