Post-Microsoft acquisition, Yammer CEO questions the state of the startup ecosystem

david sacks post

Back in June, Microsoft announced it had acquired enterprise social networking system Yammer for $1.2 billion. The deal spurred discussion about the new wave of business-focused social applications and their significance and proposed worth.

“When we started Yammer four years ago, we set out to do something big,” Yammer CEO David Sacks said at the time of the acquisition. “We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”

Apparently Sacks has more critical ideas about the startup life cycle than that, though. TechCrunch first spotted a post to his personal Facebook page (which you can see in its entirely after the break), Sacks spoke about the unending circle of acquisitions that small tech businesses are stuck in. “I think silicon valley as we know it may be coming to an end. In order to create a successful new company, you have to find an idea that (1) has escaped the attention of the major Internet companies, which are better run than ever before; (2) is capable of being launched and proven out for  ~$5M, the typical seed plus series A investment; and (3) is protectable from the onslaught of those big companies once they figure out what you’re onto. How many ideas like that are left?”

The post has inspired a who’s-who debate among some of the Valley’s tech scene elite, including investor Marc Andreesen, Founders Den co-founder Jonathon Abrams, and former TechCrunch editor Erick Schonfeld, among others – and it goes on and on and on. Clearly, a chord has been struck here and questions about the current state of the startup ecosystem resonate loudly for those closest to it.

The art of the acquisition has become a promise and a threat for young startups; it can sign those long-awaited paychecks while also effectively shutting down that planned product roadmap. There’s plenty of discussion about big companies that have turned into startup killers, Twitter, Facebook, and Google usually ended up on the other end of this finger pointing. The argument that Sacks’ opponents take in his post is that this is how the market works – it will always work in favor of the establishing veterans, and disruption will always be challenging.

Sacks could be feeling the effects of his small but powerful startup’s acquisition by the venerable Microsoft (a company not exactly known for its out-of-the-gate innovation), but his analysis isn’t without merit. Also worth nothing is that this is just one of several recent gripe-sessions from tech startup founders who are frustrated with their narrowing options in this market. So are we stuck in an unbreakable system of startup scoops by big tech companies? Maybe, maybe not – regardless, the bleak scene it’s painting for potential founders could be enough to hinder new development and growth. 

david sacks facebook
Emerging Tech

Awesome Tech You Can’t Buy Yet: Folding canoes and ultra-fast water filters

Check out our roundup of the best new crowdfunding projects and product announcements that hit the web this week. You may not be able to buy this stuff yet, but it sure is fun to gawk!
Movies & TV

The 10 best 'Black Mirror' episodes are thought-provoking, disturbing, mesmerizing

After watching all 19 episodes across four seasons and one special, we've selected and ranked the best Black Mirror episodes released so far. Read on to find out if your favorite episode from the award-winning Netflix series made the list.
Emerging Tech

Israeli startup believes it mastered the art of vegan steaks

Love meat, but worry about the impact that it is having on our planet? An Israeli startup, Jet-Eat, has created technology for 3D printing its own vegan steaks. No animal death required.
Social Media

Survey of teens says social media lets them connect with friends and get support

A survey of teenagers shows the ways that social media sites can be beneficial to them, like feeling more connected to their friends, the ability to interact with different people, and as a venue to get support when they are struggling.
Social Media

Hotel chain offers an Instagram ‘sitter’ who will post photos for you

If the pressure to post stunning Instagram photos is ruining your vacations, then how about hiring a local Instagram influencer to do the job for you while you go off and enjoy yourself? Well, such a service now exists.
Social Media

Ride the rails and share your stories with Amtrak’s new social media residency

Amtrak is looking for travel fans with a knack for telling stories on social media. The new Amtrak social media residency program wants amateur travelers to share photos, video, and written content from aboard long-distance trips.
Social Media

Hangouts isn’t being hung out to dry in 2020, Google says

According to a report, Google may shut down Google Hangouts by 2020. While Hangouts was once Google's top-tier messaging app, the app has since been neglected in favor of Android Messages.
Social Media

Tumblr bans nudity to create ‘a safe place for creative expression’

Tumblr will soon no longer allow images with adult content. The company says the change is one that's designed to help more creators feel comfortable sharing on the platform, but admits the change won't happen overnight.
Social Media

Members can share the same Story with Facebook’s new Group Stories

Facebook Group members can now view and share Group Stories. Unlike the Stories for an individual user, the new tool allows members to contribute to the same Group Story, if the feature isn't turned off by an admin.
Social Media

You can now share saved Facebook posts with a Pinterest-like collection tool

Facebook collections can now be shared with friends if you also want to allow them to contribute to the list. Facebook is rolling out an update that allows users to add a contributor to their collections, or lists of saved Facebook posts.
Mobile

Broadway actor tells Kanye West to get off his phone during opening night

Theater actors can get understandably upset when they spot someone in the audience fiddling with their phone instead of watching the show. The other night that audience member was Kanye West, and he got called out for it.
Social Media

This event topped Facebook’s biggest moments of the year — again

As the year comes to a close, Facebook is looking back on what users discussed most over the last year. For two years in a row, International Women's Day topped the list. So what else is on the list?
Social Media

This band owns Twitter, according to list of top accounts and tweets for 2018

What was the biggest buzz on Twitter in 2018? Twitter's 2018 Year in Review highlights the biggest tweets, accounts, and hashtags. The most-tweeted celebrities, movies, TV shows, athletes, politicians and more in Twitter's 2018 trends.
Social Media

What do yodeling and Kylie Jenner have in common? YouTube’s top 2018 videos

In a true nod to the variety found on YouTube, the platform's top 10 list of videos from 2018 range from celebrities to sports, from perfectly tossing a picture frame on the wall to a kid yodeling in aisle 12 at Walmart.