In practice, what everyone cares about most (both acquirers and investors) is who has the most users. If you're growing fast, they want you, period. And if not, not, period. So while investors and acquirers may grumble slightly about peripheral stuff like what language you chose, or where you're physically located, or the structure of your company, it's the sort of grumbling people do as they reach for their wallet to pay for something.
As a counterpoint, I was told that Yahoo, when they went to pick a fantasy sports site to acquire, decided that since they were Yahoo whichever one they chose would instantly have the most users, so they didn't care about user base. In fact, they chose the one that had the most compatible tech so that they could integrate quickly, and the fact that it had few users at the time just meant they got to purchase it for far less. CBS shelled out a bunch later for commissioner.com (the market leader before Yahoo bought their way in, and which Yahoo had passed on) and now is a distant third.
That clearly wouldn't apply to something like YouTube, but I wouldn't be surprised if even Google's logic is sometimes similar when acquiring small companies. Look for the product that's easiest to integrate and use their marketing muscle to push it to number one.
That's an interesting position you bring up, but I'm not sure how well it would work for most types of acquisitions. For example, there are tons of sites that are far, far better than YouTube, but it grew fast due to its popularity on the outset.
If Google acquired something better, like Vimeo (even long before youtube became so popular), I doubt even their marketing muscle would have been able to push it to the market leader.
The reason most large companies acquire smaller ones is because of two things: the userbase, or the talent that developed the app. As far as your example with fantasy sports-- there must have been something else of value in the acquisition.
The app itself is easy to create. No one buys code.
Sometimes companies acquire others because they want to be in the market and it's easier to get a higher-up to sign off on an acquisition than it is to just build it themselves. In that case, they just want to minimize the headache of integration.
I'm not saying you should base your site's design on that, as you probably shouldn't even be thinking about an acquisition from the outset. I'm just saying it happens.
Certainly that's right, in the archetypal beating-the-odds startup situation. If you're a YC company, stop reading.
But isn't it different for acquisitions done to integrate with an existing platform or are T&T (talent and technology) exits? Call them the "let's see if this works" offer. Yeah, I know, not the investor's desired scenario, but not so bad for founders, especially bootstrappers.
There seem to be a lot more of those deals out there which would be attractive for young entrepreneurs. And frankly, it might make sense based on that to try to use popular technology in clever ways.
Honestly, it's not that exciting to discuss. But if you don't have explosive growth, well, it's something you think about.
