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Start-Up Mission: Build to Sell

One wonders, with the continuing emphasis on buying companies in their early stages, if some Web 2.0 companies are developing applications specifically to sell out at an early stage to the larger companies. There seems to be an orgy of buying recently, from the pre-Internet companies like Disney, IBM and Apple, to the Web 1.0 companies like Google as well as early Web 2.0 companies like Facebook. It is obvious that Facebook and Google will come into more direct conflict, with Amazon quietly in the background. The model of TechStars proves that this is happening – several of their companies and Y Combinators have been bought in recent years, within a couple of years of their start. Having seen the presentations from TechStars latest eleven companies last week in Boulder, I could immediately see several that would be targets for the buyers in the market.

Now this flies in the face of what the semi-State funders here want and this has been talked about on this blog before. I think we need a generation of successful young entrepreneurs who sell their first companies for a few million and then go back to build ‘a better mousetrap’ the second time around. If we really want an ‘Irish Google’ as government have talked about, it is more likely that a Dylan Collins or Steve Collins will do this on their second or third start-up rather than their first.

Creating a new generation of rich and positive entrepreneurs will be the success point for the country internationally. I mean in some senses Boulder, where TechStars started, shouldn’t be successful, in the middle of America, with only 100,000 or so people and it doesn’t even have an airport! But they have developed an entrepreneurial eco system and have full support from the local community. If we can create 30 or 50 minor successes (if selling for a few million is counted as a minor success) then we are way more likely to have a huge success. Not to mention a huge multiplier effect. Watch this space.

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