In the last two days, "talent acquisitions" have resulted in the closure of two well-regarded web startups. Talent acquisitions happen when startups are acquired, not for their products but for their people. The acquirers tend to be industry giants, such as Google, Facebook, Microsoft or Apple. On Tuesday, Facebook acquired the talent running Strobe, a startup that had built a cross-platform app development system based on HTML5. Facebook didn't acquire the Strobe platform itself, and Strobe (or what was left of it) said that its service would remain available indefinitely in beta. However, with no one working on it, bugs aren't going to be fixed and new features won't be added. In other words, that parrot is definitely dead. There's still a possibility that the Strobe team may sell the software to someone else, but it's very unlikely given that the entire development team is gone. If you were developing your apps using Strobe, you're now faced with finding another development platform, and likely, rewriting your apps to work with that platform.
The lesson is that you can no longer use the funding or success of a startup as an indicator that the startup will remain in business. A "successful" startup can be acquired and its services can be shut down or left in limbo by the acquirer. So, what can you do to protect yourself?
- Be very cautious about building your product or service on top of an API offered by a startup. If anything happens to the startup or API, you may have to go into crisis mode to replace it.
- Make sure that you have a way to export any data that you don't already have copies of, and keep a local backup.
- Closely review the terms of service for any startup that you work with. If necessary, you should propose a revision or addendum that gives your company non-exclusive rights to continue using the service or software if the startup, or its acquirer or investors, decide to discontinue it. That may require you to host the service yourself or take possession of the software and source code from an escrow account.
- If the startup is providing hardware that's essential for your business, you should buy sufficient additional units and/or replacement parts to meet your needs long enough to transition to other hardware.