<story><title>How Big Deals Kill Companies</title><url>https://blog.ycombinator.com/big-deals/</url></story><parent_chain></parent_chain><comment><author>deckard1</author><text>&amp;gt; First off, large companies have different priorities in pursuing these deals than small startups. The large company might be interested in the service offered because it will generate revenue or improve efficiency. On the other hand, the execs might be trying to figure out if your company is any good so that they can buy it. In most cases, the startups see this Deal as the only thing that matters. That creates mismatched expectations and goals that can’t be bridged.&lt;p&gt;I&amp;#x27;d also point out that this can be a massive benefit for a startup. Consider this: Microsoft would not be where they are today if they didn&amp;#x27;t take advantage of IBM not caring about exclusive rights to MS-DOS. Microsoft correctly banked on the idea (whether they fully knew it or not, I don&amp;#x27;t recall) that IBM did not have a firm grasp on their technology, and that IBM clone PCs would soon take over the world.&lt;p&gt;Another example. George Lucas was able to convince 20th Century Fox to give up merchandising rights to Star Wars. 20th Century Fox and IBM both had different priorities at the time, allowing the small player to win big.&lt;p&gt;The trick, it seems, is to make a deal that seems like a Small Deal with the corporation (they will readily agree with it) that is actually a Big Deal if the startup has a way to leverage it.</text></comment>
<story><title>How Big Deals Kill Companies</title><url>https://blog.ycombinator.com/big-deals/</url></story><parent_chain></parent_chain><comment><author>baybal2</author><text>A real life story.&lt;p&gt;Once upon a time, in a far far Canada, there was a &amp;quot;Smart LED lighting module&amp;quot; startup. They had plan A and plan B: A - find a freaking huge buyer for the product, and forego all normal sales and marketing till late stage, B - start building up sales from scratch through a regular marketing&amp;#x2F;sales push.&lt;p&gt;At the start, both plans were given go. Sales through plan B were going up, but a &amp;quot;big name salesman&amp;quot; from plan A camp also scored a kill - one of the biggest lighting supplies distributor in USA. Upon hearing that, happy C levels completely wrapped up all further product development&amp;#x2F;marketing&amp;#x2F;bd and waited for them to obediently sign a cheque.&lt;p&gt;But, not so easy! That sale was just for their trial run, which would&amp;#x27;ve taken few month, and they wanted changes, and the company simply can&amp;#x27;t pull out half million units from a Chinese contractor on a minute notice.&lt;p&gt;They eagerly put a bond for goods and dished out some cash for company&amp;#x27;s equity.&lt;p&gt;Half a year later, they come and say: &amp;quot;Ah we have kinda lost interest in that experimental thingy, and since we are in a financial crisis now, we have to wrap up all nonessential developments.&amp;quot; They paid the bond, got their goods, and threw them into garbage and to liquidators. C-levels, investors, and the big distributor co. are still suing each other since 2014.&lt;p&gt;Morale of the story - all eggs in one basket is bad.</text></comment>