A Few More Words on Sparrow’s Acquisition

There have been many kind words on my recent piece on startup acquisitions, and also some disagreements. While I feel I was fairly conclusive in my post, it was clear I didn’t communicate everything quite as well as intended, so I’d like to post this brief follow-up.

Money is necessary for us all in life. Big paychecks therefore appeal very strongly to us. If you work hard on something and eventually get a nice fat paycheck for your efforts, that is nothing but great for you. But if you work hard on something you believe in, and then you get a nice fat paycheck to stop working on that which you believe in, it’s great for you and you are worthy of criticism. Certainly if that something is a piece of software you were selling to customers as recently as the day before you announced your abandonment of it. All the more so if, during or just before your negotiations with your future acquirer, you put your software on sale to attract many new customers.

This article on the business of email clients makes a good point, but does not really refute my post in any way. It makes the decision by Sparrow’s team more understandable, but more understandable abandonment is still abandonment. Sparrow is different mainly in that theirs is not an online service doomed to die a slow and agonizing death over the span of a few years (or be killed off instantly); theirs is a one-time purchase, download-and-install app now designated to slowly lose its value and relevance as time passes and new competitors emerge who do continue development. People who bought Sparrow still have a perfectly nice email client to use; it just won’t ever get any better.

This raises the question of what people’s expectations are when investing in software. Software is not like perishables or consumables; we don’t buy software the same way we buy a bag of apples. It is not a purchase of as-is and no more, because we’re meant to use the software on a continuing basis. I don’t tend to eat a bag of apples multiple times over; if I could, I’d probably do something more useful with such miraculous powers. While I sympathise with software developers not wanting to “forever support a one-time purchase,” I don’t understand their lack of empathy for customers (justifiably) not treating their software as a bag of apples: useful for one consumption only. “Bug fixes and updates are a courtesy” they say. How about it’s just doing your job as a business that respects its customers? You’re the one who sold them buggy software; I don’t see much “courtesy” in support, I see “vital element of how software companies should behave.”

Again I’m reminded of Marco Arment’s “healthy business” comments, thinking that perhaps the Sparrow team didn’t consider their business model well if their healthy business was not appealing or sustainable enough with their one-time-purchase model. But if that’s the case, we should consider that a failure, not a success, of the business. If anything, successful businesses have a tendency to stay in business.

I want to stress this: I have no ill will to the Sparrow team; email is a hard one to tackle, and if you enter the market only to discover you’ll never quite make a successful, growable business with your approach, the appeal to work for a large email (service and app) provider that does offer that potential is strong. They also managed to make a product many people loved and found innovative, which tells me they are dedicated, passionate developers (and designers, etc.) who are worth being paid well.

Everything has a lifespan—a healthy aspect of the universe itself—but that doesn’t mean we ought to laud and celebrate abandonment. You got a nice big paycheck? Congratulations to you. You abandoned your product and, to some extent, your customers? Shame on you. Yes, in terms of “having it both ways” this is precisely what you should get: praise and anger.

I’m sure we’ll all get over this just fine, Sparrow and customers alike. Voids will be filled, discontent will subside, and with some luck the people behind Sparrow get to make Gmail better. If not, their lofty goals will rest on the shoulders of whoever steps up next in their place. All the more shameful is Google’s pattern of buying companies that compete with them or in any way threaten their business model (ads), only to kill or handicap the product.

My point is simply this: just because you sold your company does not mean you are worthy of nothing but praise. Our industry has always thrived on higher goals than money as a measure of success, contrary to what our increasing VC-culture wants us to believe.

When Steves Jobs and Wozniak started Apple, money wasn’t the currency of the tech industry; a view to change the world was. That electrical renaissance need not have ended sometime in the past few years.

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