The Problem with Acquisitions

The surprise acquisition of iOS app ‘Mailbox’ by cloud storage company Dropbox caught the tech world off guard this week. They are two different products with contrastive business models, and have added to the long list of start-ups recently sold to bigger companies willing to either exploit or support small businesses. It is arguable that software companies like Mailbox ever set out to be their own company. They created a high profile, innovative product which caught the eyes of millions – it’s very likely they set off from day one to get acquired. The team behind Mailbox had virtually no other business model.

When Sparrow was destroyed by Google, there was an uproar, and Mailbox too was vulnerable of being eaten by a company like Google. Perhaps they were lucky to be picked up by the more modest team of Dropbox. Yet Dropbox refused to be sold to Apple, despite pressure from Steve Jobs, so it’s unusual that they would do what they would hate to happen to them.

The problem with acquisitions is they don’t allow a company to grow. If Apple had bought Dropbox, then it would now be an entirely different product. Without the reigns of an overarching superpower, Dropbox grew and evolved. Sparrow planned an iPad app, to extend their reach, but couldn’t realise it. We don’t know what Mailbox had planned, or what they would have developed if Dropbox hadn’t taken over. Mailbox is such a new service, with such an innovative team, it’s sad to see them swept away so early.

It could be argued that only established companies should be acquired, like Dropbox in it’s current state, for example. But when Google bought Motorola Mobility, they did nothing with it. And the potential of that workforce was locked up and gagged until Google finally recognised their existance by saying their products don’t “wow”. The buying of tech companies, whether hardware or software, start-up or already respected, is a fundamentally flawed game to play.

No doubt, whatever Dropbox do with Mailbox will be interesting, but it’ll be very different to whatever Mailbox wanted to do on their own. And that’s heartbreaking.