1) The document discusses strategies for small startups when considering interactions with large established companies ("Tyrell Corp").
2) It suggests startups should protect their intellectual property, avoid rushing into deals, and only take risks if there is a reasonable upside and low downside.
3) The document provides advice on when is the best time to consider selling the company to a large firm, as well as factors to consider for founders and employees around personal fit and leadership roles after an acquisition.
5. Talking to Tyrell
People often assume Tyrell is out to steal their ideas:
• If an employee did this, they’d get fired and cost the company a bundle
• If it’s a key technology, Tyrell is already working on their version
• If you’re good, they probably want to enlist your help
• Best practice is to quietly document any trade secrets and patent your
key IP before showing to anyone. Also read NDAs carefully.
6. Ignoring Tyrell
Sometimes, it’s better to stay “off the radar” for a while:
• If Tyrell is interested in you, they will eventually reach out. Why rush?
• When they do, just keep it professional
• Your job is not to prove your brilliance or make them any smarter
Take risks only if you see a reasonable upside, low downside
7. Testing the Waters
Let’s assume your work is exceptional and unique…
• Tyrell might eventually ask to buy some of your prototypes
• They might also offer to fund joint-development work (aka NRE)
You probably don’t want to do this for the money alone…
• But, this could be mutually beneficial and inform future compatibility…
9. When Should we Sell?
Best time to sell your company:
• When you are ready for growth but could use a big boost
Worst time to sell your company:
• When you are desperate and have few options
10. Tyrell Valuations (wishful)
Multiply Tyrell’s customer base by the profit attributable to each customer
after using your IP (a.k.a. “attach rate”)
That’s why you see some $B acquisitions flying by…
But paying billions for a startup with no customers or proven products?
11. Tyrell Valuations (practical)
• How enabling is this (given Tyrell’s secret plans and expenditures)?
• Cost to solve these problems differently? Or vs. other acquisitions?
• Cost and risk to license or buy this startup later vs. now?
• Reasonable buyout for the startup’s owners and employees to say “yes.”
12. Personal Considerations
Are you making the right desicion to join Tyrell?
• What about your families? Relocation, Remote Offices?
• Are you relatively assertive?
• Are you relatively patient?
13. Leadership Considerations
If you’re the CEO, CTO, etc… you probably need a new role:
• Your #1 job post-acquisition remains:
• Don’t get fixated on wielding the power of Tyrell for your agenda
• The company has fiefdoms internally
• Trust is earned (again)
ENSURE YOUR TEAM’S SUCCESS
14. M&A Horror Stories
Startup holds out for billion dollar payday, gets bubkas
Startup founders tell employees “big payday is coming,” then get greedy
Startup founders don’t fit at Tyrell, despite other strong people and IP
Acquired employees don’t assimilate, quickly disperse
Acquired company is ignored and their hard work goes nowhere
15. Good to Know…
• Using certain Open Source licenses may lock your software in a vault
• Tyrell’s lawyers are afraid of losing patents (hint: 😀MIT >> GPL😱)
• Let Tyrell control the public narrative. Worry about your own team.
• Ask Tyrell lots of questions up front, but don’t obsess on negatives
• Tyrell trusts past success (at Tyrell) more than your domain experience
17. • Many successful companies actively ignore their competitors
• Focus on your Customers
• Focus on Execution
• Be Pro-active vs. Reactive
Competing with Tyrell
18. Tyrell Advantages
• People — Strong and thoughtful leaders, designers and engineers
• Experience — Smart, connected and accustomed to success
• Pipeline — Build hardware / software cheaper, faster, and more reliably
• Money — Affords multiple parallel explorations, all the best resources
• Reach —All the marketing muscle they’ll ever need
19. Tyrell Handicaps
• Culture — Some of the best people won’t work there
• Scale — Won’t risk their cash-cows, will only invest in $B opportunities
• Status Quo — People can do well at Tyrell by avoiding risk
• Design by Committee — Too many stakeholders, too many visions
• Design by Attrition — The last idea standing is the one they pick
20. Your Advantages
• No Box — Imagine the impossible and try what might seem crazy
• Grounded — Connect with customers, field test and learn
• Agility — Change direction when necessary
• Scale — Start with smaller markets and grow organically
• Finesse — End-to-end solutions vs. generic platform plays
21. For Spatial Computing
Tyrell can build hardware, operating systems, algorithms, applications
• First gen AR glasses requires all of these working together
• You can exceed on one front, but can you do it all?
• No platform ever took off before demand. How long can you wait?
Focus on providing unique value
• Why would a customer want this?
• What can you offer that Tyrell can’t or won’t?
