The Fear of Getting Acquired!

This weekend, I was at a few engineering schools from India for our campus recruitment trip. Being a startup, one of the things that we covered in our presentation was general awareness and education about startups - explaining the pros and cons of somebody starting a career by joining a startup in general. As expected, we were one of the few startups who made campus trips. There is a need for a lot of education regarding startups and it has to happen at times other than the recruitment.

We focused a lot on the fact that innovation in the world of Web 2.0 and web-applications is particularly happening in the nooks and corners and the big companies are playing catch-up by mostly acquiring the same startups. What startled me was the fact that amongst the people who had the startup bent of mind and wanted to join startups had a fear - fear of the company getting acquired! The fact that everybody makes tons of money whenever such thing happened didn't seem to satisfy them - they were more concerned on what happens to the same innovation that was happeneing when the company was small.

That got me thinking. I, for one, am a firm believer of the fact that real innovation can happen in ambitious startups only. A big company has a lot of things to defend - their reputation, their products, their platform - and, more than often, they are bogged down by the pressure to defend and are not able to gain substantial momentum to innovate. A lot of this rubs on to any startup when it gets bought out and have to follow the similar processes that is followed on in the parent company.

Does that mean - the innovation will really slow down once a company gets acquired? Does that mean that serial entrepreneurism is the only solution for somebody with a innovative bent of mind? Or is the logic, of having to defend a product when it becomes big, flawed? Or is the fear of getting acquired justified?