David speaking in Episode #13: Addressing criticism of 37signals (Part 1 of 2) of the 37signals Podcast (transcript):
Everybody is so quick to do to the congratulations game whenever somebody gets acquired: “Oh, that’s so wonderful. You got acquired.” I mean, it is wonderful that somebody made a lot of money, I guess.
But in many ways, we should be offering condolences. Condolences on the future innovation of that product. Condolences to the customers who are just going to be sucked into this thing that is now way more likely to go stale. And condolences to the poor acquirer, who will probably not see a return on investment for this pickup…
I think there are tons of great companies who could have been million dollar companies that get killed in the process, in the pursuit of trying to become a billion-dollar product. And I think that the VCs are part of that. They are part of killing great million dollar companies because they infuse all this money, they blow up the idea way too early…
Everybody wants to be Michael Jordan. We look at Google and eBay, and a handful of vastly profitable billion-dollar businesses and people think that the road to that goes through the VCs. If they want their shot at being the Google, they have to go that path and that is really appealing.
They forget that the odds of that happening are vanishingly small. They forget the fact that they could just aim to be a million dollar business and they’ll probably be a lot better off. They’ll probably have a lot higher odds of success, but it’s just not as sexy.
It’s really sexy to swing for being a billion-dollar business and I can totally see the appeal of that. But just like we don’t encourage schoolchildren everywhere to think they’re going to make it into the NBA, we shouldn’t be encouraging startups everywhere to think they’re going to be the next fucking Google.