Why Micro Start-up Acquisitions Are and Will Continue To Be Popular

Historically, tech companies have always targeted startups that boast of established products and proven revenue streams. However, in the recent past, there has been such a significant shift towards investments on smaller teams or firms. The past few years has seen this trend accelerate big time.

Some of the main trailblazers are eBay, LinkedIn, Apple, Twitter, Google, and Facebook. Recently, a reinvigorated Microsoft joined the fray. The technology giant acquired LiveLoop Sunrise & Accompli after countless years focusing on strictly multi-billion deals. This was totally unexpected.

The impossible made possible

One area that has witnessed a reduction in costs is that of releasing software products. Distribution channels on the other hand are constantly being added. For instance, one team recently bootstrapped an Apple-featured Parable app. This was done in countable months specifically for a global audience. A decade ago, completing this task was next to impossible. Now more than ever, companies have started to effortlessly and proactively access complementary products much earlier in their roadmaps. This results to bets in those teams that have products which are not ready.

What does the future hold for micro team acquisitions?

For sure, the future for micro team acquisitions is both exciting and bright. In the near future, more and more companies will seek to be part of these booster acquisitions. More companies will surely jump in.

What about products?

Building a product is much easy. However, building the right type of product is completely hard. Big companies are constantly trying to come up with new, exciting, and unique products. Even though most of them experiment here and there, these companies might be late when it comes to marketing. The same companies might also lack the know-how of succeeding.

A micro team with a remarkable product is definitely an incredible extension for a company’s portfolio. Compared to an intercompany bootstrap, this great team of subject-matter professionals with execution momentum is much better. This is because it normally makes more business sense compared to bringing the team in-house and supplementing it with further resources.

Vine and Periscope, two of Twitter’s notable acquisitions, were made before their launch. The Twitter network acted as a launchpad. This way, the three-person together with the ten-person Periscope teams managed to find success on the ideas they had initially tried. In return, Twitter managed to expand into a creative video as well as live-streaming giant with blockbuster applications at a bargain.

Talent

Legendary is the perfect word that describes talent wars in a valley. A right candidate who has the right skills can surely accelerate corporate business needs if the right opportunities are presented to them. Micro teams can amplify a talent profiency exponentially. This is because they are already ramped up within a domain while at the same time working on a product. This way, they avoid the learning curve, which is so typical for new hires. With this productivity, the multiplier easily commands a premium.

There is no doubt that micro team acquisitions are the next big thing in the acquisitions field.